Corporate Social Responsibility Practices in India by FMCG companies, Corporate Sustainability

1. An Empirical Study of Corporate Social
Responsibility Practices in India
(with special reference to FMCG
companies in India
Presented By :
Chaudhary Saket Kumar
Enrolment No.:
DC/XI/Comm/20/509
Under the Supervision and
Mentorship of :
Dr. Ravi Vyas
Associate Professor
SPIPS, Indore

2. Chapter-1. Introduction
• 1.1 Conceptual Background of Corporate Social Responsibility
Practices
• 1.2 Evolution of Corporate Social Responsibility
• 1.3 Approaches to Corporate Social Responsibility
• 1.4 Dimension of Corporate Social Responsibility
• 1.5 Types of Corporate Social Responsibility
• 1.6 Key drivers of Corporate Social Responsibility
• 1.7 Corporate Social Responsibility Practice as an advantage
• 1.8 Mandatory Corporate Social Responsibility Legislation in India
(A Vehicle For Reducing Inequality)
• 1.9 Factors affecting Corporate Social Responsibility Expenditures
• 1.10 Corporate Social Responsibility as an Image Building Tool
• 1.11 Conclusion

3. 1.1 ConceptualBackgroundofCorporateSocial
ResponsibilityPractices
• CSR has been an attractive field for research over the last
seven decades.
• CSR is the practice of managing legal, economic,ethical and
philanthropic expectations of the society by the companies.
• The term “Corporate Social Responsibility” was coined
officially in 1953 by American scholar Howard Bowen and
since then it came into common use.
• CSR was deliberately included into business practices by
management of the multinational corporations to show honor
to triple bottom line i.e. People, planet and profit.
• CSR is also known as corporate citizenship.It is called so
because a firm has some rights and duties on the part of
society.

4. Definition of CSR
 European Commission(2011) defines CSR as “CSR is a
process in which business units integrate social,
environmental, ethical and human rights concerns into
their core business activity.”
 The WBCSD(World Business council for Sustainable
Development) defines CSR as “Corporate social
responsibility is the continuing commitment by business to
behave ethically and contribute to economic development
while improving the quality of the life of the workforce and
their families as well as of the local community and Society
at large”(Green Alternative Energy Assets(GAEA)).

5. 1.2 Evolution of Corporate Social
Responsibility
Four stages of CSR growth in India
First Phase
(Upto 1914)
First phase is divided into two periods: Pre-industrial
period (upto 1850s) and industrial period (1850-1914)
Pre-industrial period(upto 1850s)
❖ Existence of pure charity and philanthropy
Industrial period (1850-1914)
❖ Western industries reached India
❖ CSR through philanthropic activities
❖ Various industrialists contributed towards
economic and social developments of the nation

6. Second Phase
(1914-1960)
❖ During this phase, philanthropic activities in India were influenced
by the Theory of Trusteeship given by Mahatma Gandhi.
❖ Main objective was to achieve institutional and social
development
❖ Businesses in India were going through reforms
❖ Main objective of Corporate sector was to fulfill the vision of free
and modern India
Third Phase
(1960-1980)
❖ During this phase, mixed economy was in existence in India
❖ Various PSUs emerged and laws on labour and environment were
made
❖ PSUs were established by government for proper distribution of
wealth to marginalized sections of the society but got limited
success

7. Fourth Phase
(1980 to
present)
❖ In 1991, the government started various reforms in the
Indian economy by process of liberalization,privatization
and globalization.
❖ The growth in Indian economy after LPG era resulted in a
surge in philanthropic donations
❖ Expectations(from businesses) of general people and
government also increased
❖ In 2014, Indian government passed a law for mandated CSR
expenditure for certain categories of the companies

8. 1.3 ApproachestoCorporateSocial
ResponsibilityPractices

9. 1.4DimensionofCorporateSocialResponsibility

10. Mandatory Corporate Social Responsibility
Legislation in India (A Vehicle For Reducing
Inequality)

11. ProfileofFMCGCompaniesinIndia
FMCG Companies in India : An Introduction
• Fast Moving Consumer Goods (FMCG) companies deal with consumer packaged
products. These products are perishable in nature and have shorter shelf life. FMCG
products possesses various characteristics.

12. MajorFMCGSegmentsinIndia

13. GrowthofFMCGIndustry

14. Ten FMCG Companies in India Selected
for PresentStudy
1. Britannia Industries Limited 6. Hindustan Unilever Limited
2. Colgate-Palmolive (India) Limited 7. ITC Limited
3. Dabur India Limited 8. Marico Limited
4. Emami Limited 9. Nestle India Limited
5.Godrej Consumer Products Limited 10. P&G Hygiene and Health Care Limited

15. Review of Literature
• Dimensions of CSR
• CSR Awareness
• CSR Practices
• Impact of CSR on Stakeholders
• CSR Spending and Activities

16. LiteratureReviewonDimensionsofCSR
• (Agrawal, n.d.) found six dimensions of CSR namely customers, employees,
suppliers, shareholders, government and community. Community was the
most significant and suppliers were the least significance dimension in
FMCG sector companies in India.
• (Su & Jie, 2015) explored various domestic and foreign literatures on CSR.
The study found that ‘community relations, employee relations, diversity,
protection of consumer rights and interests, environment protection’ were
important dimensions of CSR in most of the literatures.

17. LiteratureReviewonCSRAwareness
• (González-Rodríguez & Díaz-Fernández, 2020) investigated ‘the impact of
the hotel customers’ perception and their CSR awareness regarding
environmental practices by hotels on hotel image and their Repeat Behavior
Intention (RBI)’.
• (Vethirajan & Ramu, 2019) explored the knowledge of FMCG consumers on
CSR activities carried out by FMCG companies in Chennai district.
Awareness of consumers was measured on qualitative scale using 5-point
Likert Scale. Researchers found that consumers were having sufficient
knowledge on various legal, economical, ethical and philanthropic activities
performed by various selected FMCG companies.
• (PHAM Duc Hieu, 2011) examined awareness and perceptions of managers
and executives towards corporate social responsibility (CSR) as well as
attitude of consumers towards CSR in Vietnam.

18. LiteratureReviewonCSR Practices
• (El-Bassiouny & Letmathe, 2018) in their paper tried to find out reasons for
adopting the CSR practices in Egypt. The analysis shows that there are
significant effect of internal forces on adoption of CSR and influence of
external forces are not very significant.
• (Poddar et al., 2019)15 studied CSR practices adopted by top 500 Indian
companies listed in Bombay Stock Exchange and their association with
United Nations Sustainable Development Goals on the basis of various
industrial sectors and geographical areas. The analysis disclosed that CSR
expenditures made by various industrial sectors were inconsistent. The
analysis further revealed that financial sectors were top spender in CSR
activities.

19. LiteratureReviewonImpactofCSRon
Stakeholders
• (Vlachos, 2010) investigated the impact of corporate social responsibility.
The study focused on measuring the impacts of CSR initiatives on
perceptions of various stakeholders and firm outcomes. The study found out
the variables that influenced the a stakeholder’s view on CSR. These
variables were “individual (social) level elements, corporate-level elements,
policy –level element, and country- level element”.
• (Park & Ghauri, 2015) studied to find out the key drivers of CSR practices in
small and medium sized companies. The study used stakeholder theory and
regression analysis to recommend a research model and determine the
factors that affected CSR practices in local markets. The paper highlighted
that employees and internal managers, consumers, competitors and NGOs
were main factors that influenced corporate citizenship behavior in the
emerging local markets.

20. LiteratureReviewon CSRSpendingandActivities
• (Öberseder et al., 2013) studied the CSR practices and perceptions of
consumers. Many consumers and managers were interviewed to develop
conceptuality of corporate social responsibility practices and perception of
consumers. The study revealed that corporations should consider customer,
employee, supplier and environmental domains while using CSR as a part of
marketing management tool.
• (Boronat-Navarro & Pérez-Aranda, 2019)studied the consumers’ evaluation
and support of various dimensions of CSR and how such evaluations are
affected by consumers’ CSR information. Factor analysis was performed to
test validity of different dimensions of CSR. The study confirmed the
significant effects of various CSR dimensions on perceived consumers
support and influences of consumer information in such relationships. The
legal, environmental and philanthropic dimensions had positive
relationships with perceived reputation of firms, possibility of the firm
selection and future buying intension.

21. TrendsandPatternsofCorporateSocial
ResponsibilitySpendingandPractices
1. Britannia Industries Limited
Year 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
CSR (₹ in Crores) 7.35 10.46 15.80 22.14 24.73 28.43 32.44
Link Relatives 100 142 151 140 112 115 114
Chain Base Index 100 142 215 301 336 387 441
2. Colgate-Palmolive (India) Limited
Year 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
CSR (₹ in Crores) 13.28 14.33 15.58 16.72 18.21 19.81 21.53
Link Relatives 100 108 109 107 109 109 109
Chain Base Index 100 108 117 126 137 149 162

22. 3. Dabur India Limited
Year 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
CSR (₹ in Crores) 14.71 17.44 20.38 23.74 26.53 27.8 28.71
Link Relatives 100 119 117 116 112 105 103
Chain Base Index 100 119 139 161 180 189 195
4. Emami Limited
Year 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
CSR (₹ in Crores) 7.59 9.97 7.55 9.62 7.96 5.64 7.81
Link Relatives 100 131 76 127 83 71 138
Chain Base Index 100 131 99 127 105 74 103

23. 5.Godrej Consumer Products Limited
Year 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
CSR (₹ in Crores) 16.08 14.57 16.52 18.88 21.9 19.49 34.09
Link Relatives 100 91 113 114 116 89 175
Chain Base Index 100 91 103 117 136 121 212
6. Hindustan Unilever Limited
Year 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
CSR (₹ in Crores) 82.35 92.12 103.88 116.09 126.45 143.74 165.08
Link Relatives 100 112 113 112 109 114 115
Chain Base Index 100 112 126 141 154 175 200

24. 7. ITC Limited
Year 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
CSR (₹ in Crores) 214.06 247.5 275.96 290.98 306.95 326.49 353.46
Link Relatives 100 116 111 105 105 106 108
Chain Base Index 100 116 129 136 143 153 165
8. Marico Limited
Year 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
CSR (₹ in Crores) 11.19 10.02 13.21 16.66 18.2 19.38 20.44
Link Relatives 100 90 132 126 109 106 105
Chain Base Index 100 90 118 149 163 173 183

25. 9. Nestle India Limited
Year 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
CSR (₹ in Crores) 15.3 23.5 31.22 26.91 27.37 38.31 46.42
Link Relatives 100 154 133 86 102 140 121
Chain Base Index 100 154 204 176 179 250 303
10. P&G Hygiene and Health Care Limited
Year 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
CSR (₹ in Crores) 6.52 8.45 10.8 12.2 12.74 12.32 28.81
Link Relatives 100 130 128 113 104 97 234
Chain Base Index 100 130 166 187 195 189 442

26. Relationshipof CorporateSocial
Responsibilityand Profitability
Company Name Karl Pearson Correlation R-Square Value
Britannia 0.923 0.852
Colgate Palmolive 0.958 0.918
Dabur India 0.955 0.912
Emami 0.050 0.03
Godrej 0.525 0.276
HUL 0.980 0.960
ITC 0.835 0.697
Marico 0.835 0.697
Nestle 0.714 0.510
P&G 0.950 0.903

27. Stakeholders’PerceptiontowardsCorporateSocialResponsibility
Practices inIndiaforSelectedFMCGCompanies
Demographic Summary of Respondents
Demographic Variables Frequency Total Respondents
Gender
Female 138
547
Male 409
Age
15-30 Years 306
547
31-45 Years 164
46-60 Years 70
61 & Above 7
Region
Central India 68
547
East India 37
North India 354
South India 23
West India 65
Education Qualification
Up to 10th 9
547
12th or equivalent 75
Graduation 256
Post-Graduation & Above 207
Income
Up to ₹ 2,50,000 253
547
₹ 2,50,001- ₹ 5,00,000 122
₹ 5,00,001- ₹ 7,50,000 67
₹ 7,50,001 ₹ 10,00,000 52
₹ 10,00,001 & Above 53
Category
Customers and Common Public 390
547
Employees 110
Suppliers and Distributors 47

28. NormalityofPrimaryDataCollected

29. ReliabilityAnalysisofPilotStudy Conducted
Case Processing Summary
N %
Cases
Valid 81 100.0
Excludeda 0 0.0
Total 81 100.0
a. Listwise deletion based on all variables in the procedure.
Reliability Statistics
Cronbach's Alpha N of Items
0.951 19

30. PerceptionofStakeholderstowardsCorporateSocial
ResponsibilityPractices
• Objective- To study stakeholders’ perception towards CSR practices in selected
FMCG companies
• 1. H01 – There is no significant difference in perception of community at large
towards social and community welfare activities of selected FMCG companies with
respect to category of stakeholders.
ANOVA
Social & Community Welfare (Independent Variable) and Category (Dependent Variable)
Social & Community Welfare
Sum of
Squares
Df Mean Square F Sig.
Between
Groups
164.699 2 82.350 102.633 0.000
Within Groups 436.489 544 0.802
Total 601.188 546

31. Social & Community Welfare
Student-Newman-Keulsa,b
11.Category N Subset for alpha = 0.05
1 2
Customers and
Common Public
390 3.48
Suppliers and
Distributors
47 4.64
Employee 110 4.72
Sig. 1.000 0.548
Means for groups in homogeneous subsets are displayed.
a. Uses Harmonic Mean Sample Size = 91.098.
b. The group sizes are unequal. The harmonic mean of the group sizes is used. Type I error levels are
not guaranteed.

32. H02–Thereisnosignificantdifferenceinperceptionofcommunityatlarge
towardsenvironmentalsustainabilityactivitiesofselectedFMCGcompanies
withrespecttocategoryofstakeholders.
ANOVA
Between Environmental Sustainability and Category
Environmental Sustainability
Sum of Squares Df Mean Square F Sig.
Between Groups 188.254 2 94.127 88.274 0.000
Within Groups 580.075 544 1.066
Total 768.329 546
Environmental Sustainability
Student-Newman-Keulsa,b
11.Category N Subset for alpha = 0.05
1 2
Customers and Common
Public
390 3.27
Suppliers and
Distributors
47 4.45
Employee 110 4.61
Sig. 1.000 0.289
Means for groups in homogeneous subsets are displayed.
a. Uses Harmonic Mean Sample Size = 91.098.
b. The group sizes are unequal. The harmonic mean of the group sizes is used. Type I error levels are not
guaranteed.

33. H03–Thereisnosignificantdifferenceinperceptionofcommunityat
largetowardseducationalactivitiesofselectedFMCGcompanieswith
respecttocategoryofstakeholders.
ANOVA
Between Education and Category
Education
Sum of
Squares
Df Mean Square F Sig.
Between
Groups
122.756 2 61.378 64.793 0.000
Within
Groups
515.331 544 0.947
Total 638.088 546
Education
Student-Newman-Keulsa,b
11.Category N Subset for alpha = 0.05
1 2
Customers and
Common Public
390 3.29
Suppliers and
Distributors
47 4.26
Employee 110 4.37
Sig. 1.000 0.416
Means for groups in homogeneous subsets are displayed.
a. Uses Harmonic Mean Sample Size = 91.098.
b. The group sizes are unequal. The harmonic mean of the group sizes is used. Type I error
levels are not guaranteed.

34. SummaryofHypothesis
Hypothesis Test Used p-value Null Hypothesis Findings
H01 – There is no significant
difference in perception of
community at large towards
social and community welfare
activities of selected FMCG
companies with respect to
category of stakeholders
ANOVA p = 0.00 Rejected There is a significant
difference in the perception of
the community at large
towards the social and
community welfare activities of
the FMCG companies.
H02 – There is no significant
difference in perception of
community at large towards
environmental sustainability
activities of selected FMCG
companies with respect to
category of stakeholders.
ANOVA p = 0.00 Rejected There is a significant difference
in the perception of the
community at large towards
environmental sustainability
activities of the FMCG
companies.
H03 – There is no significant
difference in perception of
community at large towards
educational activities of selected
FMCG companies with respect to
category of stakeholders.
ANOVA p = 0.00 Rejected There is a significant difference
in the perception of the
community at large towards
educational activities of the
FMCG companies.
H04 – There is no significant
difference in perception of
community at large towards
health activities of selected
FMCG companies with respect to
category of stakeholders.
ANOVA p =0.00 Rejected There is a significant difference
in the perception of the
community at large towards CSR
practices in area of health
activities of the FMCG
companies.

35. SummaryofHypothesis
Hypothesis Test Used p-value Null Hypothesis Findings
H0 5– There is no significant
difference in perception of
community at large towards
women issues in selected
FMCG companies with
respect to category of
stakeholders.
ANOVA p = 0.00 Rejected
There is a significant
difference in the perception
of the community at large
towards CSR activities
regarding women issues of
the FMCG companies.
H06– There is no significant
difference in perception of
community at large towards
specially abled /divyang
issues in selected FMCG
companies with respect to
category of stakeholders.
ANOVA p = 0.00 Rejected
There is a significant
difference in the perception
of the community at large
towards specially abled /
Divyang issues environmental
sustainability activities of the
FMCG companies.
H07– There is no significant
difference in perception of
community at large towards
rural development in
selected FMCG companies
with respect to category of
stakeholders.
ANOVA p = 0.00 Rejected
There is a significant
difference in the perception
of the community at large
towards rural development
by the FMCG companies.
. H0 8– There is no significant
difference in perception of
community at large towards
farmer issues in selected
FMCG companies with
respect to category of
stakeholders.
ANOVA p =0.00 Rejected
There is a significant
difference in the perception
of the community at large
towards CSR practices
involving farmers’ issues in
the FMCG companies.

36. SummaryofHypothesis
Hypothesis Test Used p-value Null Hypothesis Findings
H09– There is no significant
difference in perception of
community at large towards
development of overall
corporate image in selected
FMCG companies with
respect to category of
stakeholders.
ANOVA p = 0.00 Rejected
There is a significant
difference in the perception
of the community at large
towards development of
overall corporate image of
the FMCG companies.
H010– There is no significant
difference in perception of
various stakeholders
towards social and
community welfare activities
in selected FMCG companies
with respect to region
ANOVA p = 0.91 Accepted There is a no significant
difference in the perception
of the community at large
towards environmental
sustainability activities of the
FMCG companies.
H011– There is no
significant difference in
perception of various
stakeholders towards
environmental sustainability
in selected FMCG companies
with respect to region
ANOVA p = 0.314 Accepted There is no significant
difference in the perception
of the community at large
towards environmental
sustainability activities of the
FMCG companies.
H012– There is no significant
difference in perception of
various stakeholders
towards education in
selected FMCG companies
with respect to region
ANOVA p =0.39 Rejected
There is a significant
difference in the perception
of the community at large
towards educational
activities of the FMCG
companies.

37. SummaryofHypothesis
Hypothesis Test Used p-value Null Hypothesis Findings
. H013– There is no
significant difference in
perception of various
stakeholders towards health
in selected FMCG companies
with respect to region
ANOVA p = 0.04 Rejected
There is a significant
difference in the perception
of the community at large
towards health activities of
the FMCG companies.
H014– There is no significant
difference in perception of
various stakeholders
towards women issues in
selected FMCG companies
with respect to region
ANOVA p = 0.110 Accepted There is no significant
difference in the perception
of the community at large
towards CSR activities for
women issues by the FMCG
companies.
H015 – There is no significant
difference in perception of
various stakeholders
towards disabled/divyang
issues in selected FMCG
companies with respect to
different regions
ANOVA p = 0.214 Accepted
There is no significant
difference in the perception
of the community at large
towards specially abled /
Divyang issues of the FMCG
companies
H016 – There is no significant
difference in perception of
various stakeholders
towards rural development
in selected FMCG companies
with respect to region
ANOVA p =0.187 Accepted
There is no significant
difference in the perception
of the community at large
towards rural development
of the FMCG companies.

38. SummaryofHypothesis
Hypothesis Test Used p-value Null Hypothesis Findings
H017 – There is no significant
difference in perception of
various stakeholders
towards farmer issues in
selected FMCG companies
with respect to region
ANOVA p = 0.012 Rejected
There is a significant
difference in the perception
of the community at large
towards farmers issues of the
FMCG companies.
H018 – There is no significant
difference in perception of
various stakeholders
towards education in
selected FMCG companies
with respect to age of
stakeholders.
ANOVA p = 0.04 Rejected
There is a significant
difference in the perception
of the community at large
towards educational
activities of the FMCG
companies.
H019 – There is no significant
difference in perception of
various stakeholders
towards health in selected
FMCG companies with
respect to age of
stakeholders
ANOVA p = 0.000 Rejected
There is a significant
difference in the perception
of the community at large
towards CSR practices in area
of health of the FMCG
companies.
H020 – There is no significant
difference in perception of
community at large towards
education in selected FMCG
companies with respect to
income of stakeholders
ANOVA p =0.170 Accepted
There is no significant
difference in the perception
of the community at large
towards educational
activities of the FMCG
companies.

39. SummaryofHypothesis
Hypothesis Test Used p-value Null Hypothesis Findings
H021 – There is no significant
difference in perception of
community at large towards
health in selected FMCG
companies with respect to
income of stakeholders
ANOVA p = 0.01 Rejected
There is a significant
difference in the perception
of the community at large
towards CSR practices in area
of health of the FMCG
companies.
H022 – There is no significant
difference in perception of
community at large towards
specially abled/divyang
issues in selected FMCG
companies with respect to
income of stakeholders
ANOVA p = 0.110 Accepted
There is no significant
difference in the perception
of the community at large
towards specially abled /
divyang issues of the FMCG
companies.
H023 – There is no significant
difference in perception of
community at large towards
rural development in
selected FMCG companies
with respect to income of
stakeholders
ANOVA p = 0.301 Acepted There is no significant
difference in the perception
of the community at large
towards rural development
of the FMCG companies.
H024 – There is no significant
difference in perception of
community at large towards
education in selected FMCG
companies with respect to
education of stakeholders
ANOVA p =0.005 Rejected
There is a significant
difference in the perception
of the community at large
towards educational
activities of the FMCG
companies.

40. SummaryofHypothesis
Hypothesis Test Used p-value Null Hypothesis Findings
H025 – There is no significant
difference in perception of
community at large towards
rural development in
selected FMCG companies
with respect to education of
stakeholders
ANOVA p = 0.02 Rejected
There is a significant
difference in the perception
of the community at large
towards rural development
of the FMCG companies.
H026 – There is no significant
difference in perception of
community at large towards
women issues in selected
FMCG companies with
respect to gender of
stakeholders
T Test p = 0.048 Rejected
It indicates that perception of
male and female differs with
regard to women issues.

41. SummaryofHypothesisofimpactofcorporatesocialresponsibility
(CSR)practicesonperceptionofstakeholders
Hypothesis Test Used p-value Null Hypothesis Findings
H01 – There is no
significant impact of CSR
practices by selected
FMCG companies on
perception of customers
and common public
towards community and
social welfare activities
Linear Regression p = 0.000 Rejected
There is significant impact of
CSR practices by FMCG
companies on perception of
customers and common
public towards community
and social welfare activities.
H02– There is no significant
impact of CSR practices on
perception of employees
working in selected FMCG
companies towards
development of corporate
branding.
Linear Regression p = 0.000 Rejected It indicates that perception of
male and female differs with
regard to women issues.
H03– There is no significant
impact of CSR practices on
perception of suppliers and
distributors of selected
FMCG companies towards
development of corporate
and brand image.
Linear Regression p = 0.000 Rejected
there is significant impact of
CSR practices by FMCG
companies on perception of
suppliers and distributors
towards corporate image and
branding.