Suppliers Get Socially Aware As India Story Gets Bigger

Retail Majors Demand CSR Report Cards From Vendors

Corporate responsibility (CSR) is the buzzword with Indian
exporters as buyers such as Wal-Mart and JCPenney attach premium to it.
Exporters are undertaking a range of activities, such as creating better
living conditions for workers, cluster development, providing free medical
facilities to locals and educating children of underprivileged section of
society.

    "International retail majors are insisting on social compliance. They
are particular that their suppliers are good corporate citizens," Orient
Craft managing director Sudhir Dhingra said.

    There is a reason for that. Products of global firms are sold in the US
and European markets on the pledge that they are sourced from places where
making profit is not the sole motive. For instance, JCPenney makes its motto
clear: "A healthy, vibrant community is important for JCPenney associates,
their families and friends. It is also an environment where a business can
prosper".

    Industry sources said JCPenney is holding a conference of vendors in
Hong Kong that will specifically address CSR issues.

    It is not that Indian exporters are increasingly focusing on CSR only to
fulfil buyers' requirements. Ludhianabased export company Trident, which is
one of the largest suppliers of terry towels to Wal-Mart and JCPenney, is
active in education and skill upgradation as part of its CSR campaign.
"While the CSR initiative is a personal call a company makes, it serves a
dual purpose of social consciousness and customer satisfaction," Trident
group MD Rajinder Gupta said. Mr Gupta, who comes from a very humble
background, understands his responsibility in paying back to the society.

    Wal-Mart's recent decision to go Green is not confined to the US retail
major. It will have an impact on the entire chain. Thousands of vendors will
have to ensure they supply products as per Wal-Mart's specifications.

    "Indian companies should follow Wal-Mart's example of going Green not
just to woo foreign buyers but for the simple reason of service to society,"
Gokaldas Exports' marketing and production head Dinesh Hinduja said.

    Indian firms are aware of it. "Companies in India are geared towards
international standards of social responsibility and compliance, and have
external audit companies for such standards," Mr Hinduja said. Apart from
inhouse education and training, Gokaldas Exports is engaged in philanthropic
work too.

TRUST UNIT To demonstrate good business citizenship, firms can report
compliance with a number of CSR standards, including:

AccountAbility's AA1000 standard, based on John Elkington's triple bottom
line (3BL) reporting

Global Reporting Initiative's sustainability reporting guidelines

Verite's monitoring guidelines

Social accountability international's SA8000 standard

The ISO 14000 environmental management standard

TBL demands that a company's responsibility be to stakeholders rather than
shareholders. Stakeholders refers to anyone who is influenced, either
directly or indirectly, by the actions of the firm

Sustainability reporting is the action where an organisation publicly
communicates their economic, environmental, and social performance

SA8000 is a global social accountability standard for decent working
conditions

ISO 14000 environmental management standards exist to help organisations
minimise how their operations negatively affect the environment

Publication:Economic Times Mumbai; Date:Jul 19, 2007; Section:Business Of
Brands; Page Number:4

By :Priyanka Talwar & Rajeev Jayaswal New Delhi

URL :
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