Corporate Social Responsibility in India: policy and practices of Dutch companies

Corporate Social Responsibility in India: policy and practices of Dutch companies

More can be done to improve CSR of Dutch companies in India

This study sets out to analyse to what extent Dutch companies in India have developed a policy on Corporate Social Responsibility (CSR) as well as to identify good practices and potential difficulties in the implementation of such policy. Furthermore the study hopes to support companies in finding practical solutions.

Key findings of the study include:

  • because of limited resources, less public pressure and less requirements CSR is not at all institutionalised yet in Small and Medicum Enterprises (SMEs)
  • companies are mainly reactive and less pro-active in the formulation of their CSR policy
  • the relation between the mother and the daughter company it is not clear which company is responsible for the CSR impact of the business activities
  • there are important areas in which the perception of Dutch companies and NGOs on CSR differs from the Indian perception
  • companies are more concerned with CSR related to their own production processes and often fail to detect non-compliance in the work processes they outsource locally
  • companies consider the broader human rights situation to be the primary responsibility of governments and do not want to take a position on political decisions taken by the state, even if they involve human rights violations
  • the environmental policy of companies is mainly focussed on traditional "grey" issues, such as the use of energy, material and water, emissions and waste management
  • transfer of science and technology is to a limited extent achieved by appointing Indian management and employing Indian staff.

Based on the above findings the study makes the following recommendations:

  • companies should make more use of CSR risk assessments: this would stimulate pro-activeness, and will help to reveal sector and country specific CSR issues
  • a CSR policy should not only be communicated top-down but should be supported by a credible stakeholder assessment and dialogue as well as clear implementation measures
  • companies could show their intention to be transparent by adopting an explicit transparency policy in their codes of conduct
  • NGOs should support SMEs by means of sector wide initiatives and exchange of best practices
  • Dutch NGOs should not only focus on large and well-known multinational corporations (MNCs), but also on SMEs and on supermarkets in the lower price segment
  • Indian NGOs are in the process of setting up a CSR platform; they could make use of the experiences and expertise of the Dutch platform
  • the Dutch government should provide more guidance on political sensitive issues which can affect the impact of activities of Dutch companies, also in a democratic country like India
  • the Dutch government together with NGOs could develop CSR country-based toolkits or fact sheets for the benefit of Dutch companies wanting to locate or invest in a developing country.