Blackbook-csr in Insurance Sectors

INTRODUCTION

Corporate social responsibility is the continuing commitment by business to achieve commercial success in ways that honor ethical values, address legal issues and contribute to economic development while improving the quality of the workforce and their families as well as the local community and society at large. Indeed, the idea of social responsibility is not new to this age; rather it has been around as long as businesses have existed. Sometimes it comes in the shape of caring owners who provided housing, paid the workers who are off due to sickness or otherwise in form of attempts made to provide ease and comfort to the employees lot. lthough many such voluntary social measures have become legal requirements, a number of business leaders have gone further ahead by utili!ing their wealth to improve the living conditions of many people in the society. Simultaneously, a shift is already occurring from traditional philanthropy to wholesome community development among the more progressive of the companies. "inancial System is the most important institutional and functional vehicle for economic transformation of any country. #anking sector is reckoned as a hub and barometer of the financial system. s a pillar of the economy, this sector plays a predominant role in the economic development of the country. $hus the banking sector has been playing a significant role as growth facilitator. In recent years corporate social responsibility has become an important issue at global level. $he concept of corporate social responsibility recogni!es as commitment of an organi!ation to operate in a socially responsible manner. It takes into consideration the social and environmental implications of corporate financial decisions. It is also associated with corporate governance and ethical business procedure. Experts have defined CSR as ‘A concept whereby a copany ind!"#es in contin!o!s$ responsib"e activities that point to its #ood intentions as a corporate citi%en&

 renowned social responsibility analyst in the %&, 'alin #aker states that CS( is about how companies manage the business processes to produce an overall positive effect on society )$he *orld business counsel for sustainable development+ notes that CS( is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

Definitions

ct means the Companies ct, -/0 Corporate Social (esponsibility 1CS(2 means and includes but is not limited to a2 3ro4ects or programmes relating to activities specified in Schedule 5II to the ct or b2 3ro4ects or programs relating to activities undertaken by the board of directors of a Company in pursuance of recommendations of the CS( Committee of the #oard as per declared CS( policy of the company sub4ect to the condition that such policy will cover sub4ects enumerated in Schedule 5II of the ct.

CS( Committee means the Corporate Social (esponsibility Committee of the #oard referred to in section /06 of the ct. CS( 3olicy relates to the CS( outlook of the Company and the activities to be undertaken by the company as specified in Schedule 5II to the ct and the expenditure thereon, excluding activities undertaken in pursuance of normal course of business of a company. 7et profit means the net profit of a company as per its financial statement prepared in accordance with the applicable provisions of the ct, but shall not include the following, namely89 a2 any profit arising from any overseas branch or branches of the com pany, whether operated as a separate company or otherwise; and b2 any dividend received from other companies in India, which are covered under and complying with the provisions of section /06 of the ct8

3rovided that net profit in respect of a financial year for which the relevant financial statements were prepared in accordance with the provisions of the Companies ct, /:6, 1/ of /:62 shall not be required to be re9calculated in accordance with the provisions of the ct.

NEED 'OR CSR

CS( is a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. It is represented by the contributions undertaken by companies to society through its business activities and its social investment. CS( has been making an increasingly prominent impact in the Indian social system by supplementing development pro4ects. #ut it is not a novel concept in India as its historical roots goes till the 5edic age. $oday Insurance Sector growing larger and powerful than before. 5arious 7on9government organi!ations put pressure on them to act responsibly towards their stakeholde rs. $hus pressure has given rise to the concept named Corporate Social (esponsibility. CS( defined as xactly what responsibility companies have towards society has been discussed for some decades now.  fundamental model which could be argued to reflect the outcome of this discussion is Carroll s 1/::/2 four9part model in figure ? /. ‟

CS( is now an integral part of functioning of an organisation. $he performance of an organisation should be 4udged beyond the financial parameters. $he authorities need not only focus on the financial performance but to examine into the CS( performance of the organisation.

Econoic responsibi"ities8 $he first responsibility of the company towards society refers to running the business as an economically healthy unit. It includes aspects such as return on investment for shareholders, fair employee salaries, and quality products supplied to customers at fair prices; all required by the society. 1Crane @'atten, -A2

(e#a" responsibi"ities8 Bemands that companies act in accordance with existing legislation and regulatory requirements. $he legal framework consequentially fosters society+s ethical view and all companies attempting to be socially responsible are therefore required by society to follow the law. 1Crane @'atten, -A2

Ethica" responsibi"ities8 It refers to corporation+s responsibilities which are not covered by legal or economical requirements, but instead by what could be considered as right or fair in the eyes of society. Society therefore expects corporations to act ethically towards their stakeholders. 1Crane @ 'atten, -A2

)hi"anthropic responsibi"ities8 $his involves corporations willingness to enhance the quality of living for their stakeholders 1i.e. employees, local community, and society at large2 through charitable donations and organi!ational support. $hese corporate decisions are entirely voluntary, of less importance than the former three, and 1with regards to social responsibility2 only seen as desired by society. 1Crane @ 'atten, -A2.

CSR Nors in India $he government on $hursday, -D

th

"eb -/A notified the much9awaited provisions mandating

companies to plough back at least - per cent of their net profit on upliftment of the society. $he ministry of corporate affairs 1'C2 has notified Section /06 and Schedule 5II of the Companies ct, -/0, which relate to corporate social responsibility 1CS(2 that will be effective from pril /, as part of the new Companies ct. $he norms will apply to companies with at least (s 6crore net profit or (s /,crore turnover or (s 6crore net worth. $hese companies will have to spend - per cent of their three9year average annual net profit on CS( activities in each financial year, starting from "E/6.  had institutionali!ed wrongdoings in his company for decades.

Advanta#es of CSR It is becoming increasingly important for companies to be good corporate citi!ens. Society has started to demand it. Consumers believe that increasing the transparency of business practices, and demonstrating positive social and environmental impacts are the two most effective actions companies can take to improve public trust in the private sector, according to the xternal risk minimi!ation may be more difficult to employ. Insurers should, however, attempt to do so in any circumstances over which they have some control. ppropriate strategic CS( measures used to reduce risk externally will depend on the type of products offered by an insurer. In general, insurers should train underwriters to look more closely at clients+ internal decision9making processes, risk management procedures and ethics.

%nderwriting for large, risky pro4ects or companies should entail in9depth research on the likely sources of risk as well as more extensive screening and monitoring. "urther, insurers should be proactive in stipulating limits or requirements around insurance for pro4ects that may impact human rights. ne example is insurance policies for pipeline pro4ects in countries where the exploitation of natural resources has fueled corruption, social unrest, conflict and abuses. >xternal risk minimi!ation should reduce claims costs and frequency for clients, and insureds will thus be incentivi!ed to reduce the likelihood and severity of loss in order to lower their premiums. Insurers should, and often do, consider offering discounted premiums to insureds that take preventative measures. "or example, discounts are offered to households that install security systems, young drivers who take safety courses and life insureds who do not smoke. 84 C"iate Chan#e (eadership

"or insurers, a big part of risk minimi!ation involves the environment, as insurers have an inherent interest in ensuring their clients are equipped to deal with natural disasters and the effects of climate change. $he %nited 7ations >nvironmental 3rogram "inance Initiative is a collaborative effort of more than - companies in the financial services sector to uropean company, became the first insurer to ivin#

GB"C Jife encourages its employees to contribute a small part of their salary to establish their own charity account through the 3ayroll Hiving programme.

Tree p"antation

>nvironmental sustainability is emerging as an essential ingredient to doing business responsibly and successfully. 'inancia" (iteracy pro,ect

GB"C life believes in empowering marginali!ed population by building their capabilities. ne of the key capabilities is the ability to use knowledge and skills to manage financial resources effectively for long term financial well9being.

Swabhiaan Careers

GB"C Jife reali!es that coping with the loss of a loved one is a painful experience. *hile the disbursement of a death claim may help family members. A6shaya )atra

GB"C life believes that education plays a significant role in a person+s life. It helps marginali!ed population of society in breaking away from the shackles of poverty.

E?IDE (I'E INSURANCE

Say No to )"astics

>xide Jife Insurance is in the business of helping its customers manage their financial futures. Jike protection of life insurance is important to build a foundation for our familyLs financial future, it is important for us as individuals to protect the environment that will lead to a safer and better tomorrow. Say 7o to 3lastics is a very unique initiative from >xide Jife Insurance that educates the citi!ens of India on the negative effects of usage of plastics and encourages them to switch to environment friendly materials. %nder this program, our teams have engaged with more than /, households. ur teams go door to door and during every interaction they handover &ora Cloth bags and make people take a pledge towards this noble cause. $his program was recently recogni!ed by (ural 'arketing ssociation India through a Hold ward in the Boor $o Boor 'arketing 1Social2 Category. >xide Jife Insurance thanks all those have already said no to plastics.

S=I (ife Ins!rance / India S#I Jife undertakes its CS( initiatives with an ob4ective to bring about effective change as a (esponsible Corporate Citi!en. $hrough various CS( initiatives, Company intends to ameliorate the conditions of the people from the underprivileged sections of the society by facilitating them with education, adequate health care services and contributing towards making their lives better. 34 'aci"itate ed!cation for !nderprivi"e#ed chi"dren thro!#h the fo""owin# initiatives.

RContributed towards the academic support of /,- underprivileged girls in 'umbai and : girls in ndhra 3radesh in partnership with 7anhi &ali. In addition to primary education, the support includes cademic Support 1Cost of $utors, $raining2 and 'aterial Support 1%niform, Stationery and 7otebooks2. Nanhi @a"i, is a pro4ect 4ointly managed by &C 'ahindra >ducation $rust and 7aandi

"oundation was incepted in /::.

Rrgani!ed 3ro4ect %nnati along with Smile "oundation and supported the educational needs of -6 young girls.

Si"e 'o!ndation is an Indian development agency registered as an Indian Charitable $rust in

--, working for the holistic development of children, youths and women 1in the areas of education, health, girl child, empowerment and livelihood2.

RContributed towards supporting the educational requirement of the children like note books, stationary items from druta "oundation. Adr!ta 'o!ndation rehabilitates orphaned or deserted children in disha. It aims at becoming the centre of excellence in providing food, clothing, education and holistic growth to destitute

children.

RContributed towards procuring school bags, water bottles, notebooks, pencils, erasers, crayon boxes and white board for classroom teaching /-6 children in %$SG, Huwhati.

3

UTSA; 1%niversal $eam for Social ction @ Gelp2 is a Child 3rotection Centre,

accommodating /-6 students from the slum area under the >ducation 3rogramme.

RS#I Jife Chandigarh office identified an orphanage for girls 9 nergyusage

Guman(ights

MobsCreated

*aste3roduced

3roduct(esponsibility

=ENE'ITS O' TRI)(E =OTTO+ (INE Enhanceent of rep!tation and brand./

>ffective communication with stakeholders on one or more of $#J dimensions can play an important role in managing stakeholder perceptions and so protect and enhance corporate reputation 1look what happened to wheat board shares2.

Sec!rin# a socia" "icence to operate./

$his is kind of like reputation, an informal community and stakeholder support for the organi!ation+s operations ? communities are likely to be more supportive of companies that communicate openly @ honestly about their performance in relation to environ, social @ economic factors.

Attraction and retention of hi#h ca"ibre ep"oyees./

$he publication of $#J information can play a role in positioning an employer as an employer of choice, which can enhance employee loyalty , reduce turnover attract knowledgegold collar workers.

Red!ced ris6 profi"e./

*hen $#J reporting takes place a company shows its commitment to minimising risk ? in times of increasing litigation, where due diligence can be established and a company establishes risks, they can be better managed. In turn, this improves stakeholder relations and makes it easier to attract investment capital and therefore positively affect the share price. Identification of potentia" cost savin#s./

$#J reporting involves the collection, collation and analysis of data on resource and material usage and the assessment of various processes. $his can actually help a company to better identify opportunities for cost savings through more efficient use of resources and materials

Increased scope for innovation./

In the process of reporting on all aspects of $#J, a company may actually create new innovations. >.g.89 trying to use less water, invent a grey water recycler.

Creation of a so!nd basis for sta6eho"der dia"o#!e./

3ublication of $#J reporting creates a platform for engaging in dialogue with stakeholders. %nderstanding stakeholder requirements and aligning them with business performance is fundamental to business success.

'UTURE SCENARIO O' CSR *e in India need to take hard look at ourselves. Compared to other countries our track record in development is fair from satisfactory.  man may have a mobile phone, but does not have access to clean drinking water , a toilet, healthcare or basic infrastructure like electricity or roads. $he poorest of the poor in the world live here even while malls are springing up everywhere. $he population stratification is the steepest in the world. In a country of more than /.-b people, we have a shortage of doctors, teachers, nurses, policem an, soldiers in fact of all skilled workmen . $he harsh reality of a high rate of malnutrition and infant mortality cannot be brushed under the carpet or simply wished away. bove all, the complete breakdown of the mployees reali!e the importance of CS( initiatives to the company when support from top management is visible. I have seen that those employees who engage in CS( initiatives get involved and feel empowered by their personal ability to make a difference. $hey feel proud to belong to an organi!ation that does good work for the needy. $hey are motivated and from a more committed work force. Areas of wor6 co!"d be.

/. Gealthcare -. >ducation 0. Skills training A. #uilding infrastructure 6. >nvironmental issues

Conc"!sion. 7o doubt CS( is not the only solution. It is but a small cog in the engine of development; however it is critical part. *ithout the corporates taking on the mantle of social responsibility and aiding and pressuri!ing the government to do it bit, this engine could come to a grinding halt. $he time to act is 7*.

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