CSR of Amul
CSR of Amul
CSR of Amul
VIDYA VIKAS UNIVERSAL COLLEGE OF ART, COMMERCE, SCIENCE, BMM & BMS MALAD (WEST) MUMBAI 400064
CERTIFICATE
We hereby certify that Mr. Sameer Shaikh of VidyaVikas Universal College studying in Second Year BMS (Semester IV) has completed project on CORPORATE SOCIAL RESPONSIBILITY OF AMUL in the academic year 2012-2013.
The information submitted in the project is true and original to the best of our knowledge.
____________ CO-ORDINATOR
_____________ PRINCIPAL
ACKNOWLEGEMENT
I would like to take this opportunity to thank all those who have stood by my side, encouraged me and helped me throughout my study. I owe a lot to everyone who co-operated in making my thesis on CORPORATE SOCIAL RESPONSIBILITY OF AMUL. I, would like to express my gratitude towards my Prof. Shruti Naik, for giving me an opportunity prepare a project on Corporate Social Responsibility of Amul. I take immense pleasure in thanking my thesis guide Prof. Shruti Naik. Last but not the least I would like to thank my family and friends for their continuous support and help.
DECLARATION
I, SHAIKH SAMEER USMAN the student of second year B.M.S. (Semester IV) (2012-2013) hereby declare that I have completed the project on Corporate Social Responsibility of Amul. The information submitted is true and original to the best of my knowledge.
Signature of Student: _______________ Name of the Student: Sameer Shaikh. Roll no. 14
WHAT IS CSR ? The voluntary compliance of social and ecological responsibility of companies is called Corporate Social Responsibility (CSR). Corporate social responsibility is basically a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. Corporate social responsibility is represented by the contributions undertaken by companies to society through its business activities and its social investment. This is also to connect the Concept of sustainable development to the companys level. Over the last years an increasing number of companies worldwide started promoting their Corporate Social Responsibility strategies because the customers, the public and the investors expect them to act sustainable as well as responsible. In most cases CSR is a result of a variety of social, environmental and economic pressures. The Term Corporate Social Responsibility is imprecise and its application differs. CSR can not only refer to the compliance of human right standards, labor and social security arrangements, but also to the fight against climate change, sustainable management of natural resources and consumer protection. The concept of Corporate Social Responsibility was first mentioned 1953 in the publication Social Responsibilities of the Businessman by William J. B owen. However, the term CSR became only popular in the 1990s, when the German Betapharm, a generic pharmaceutical company decided to implement CSR. The generic market is characterized by an interchangeability of products. In 1997 a halt in sales growth led the company to the realization that in the generic drugs market companies could not differentiate on price or quality. This was the prelude for the company to adopt CSR as an expression of the companys values and as a part of its corporate strategies. By using strategic and social commitment for families with chronically ill children children, Betapharm took a strategic advantage. In July 2001, the European Commission decided to launch a consultative paper on Corporate Social Responsibility with the title Promoting a European Framework for Corporate Social Responsibility. This paper aimed to launch a debate on how the European Union could promote Corporate Social Responsibility at both the European and international level. The paper further aimed to promote CSR practices, to ensure the credibility of CSR claims as well as to provide coherence in public policy on CSR.
IMPORTANCE OF CSR?
Corporate social responsibility (CSR) plays a major role in developing the economy of a country. It can be defined as the way in which a company manages various business entities to produce an impact on the society. Companies with high CSR standards are able to demonstrate their responsibilities to the stock holders, employees, customers, and the general public. Business organizations that have high corporate social responsibility standards can attract staff thereby reducing employee turnover and cost of recruitment. What is the importance of corporate social responsibility? Anyone can give a clear answer to this question. Companies voluntarily contribute a large sum of money to make a better society and a clean environment. Corporate social responsibility is a process in which all companies come together as one and take part in the welfare of the society. Many organizations conduct campaigns to create awareness among corporate, civic bodies, and government bodies about the importance of corporate social responsibility. Many national and multinational firms are booming in various developing countries. But at the same time, these countries suffer social challenges such as poverty, corruption, population growth, etc. Therefore, it is important for all companies to strive together and adapt corporate social responsibility standards to make the society better than before. An organization can exhibit a better image in the society if it cares for its employees and involve them in social activities. The responsibilities of an organization may range from providing small donations to executing bigger projects for the welfare of the society. Many business houses around the world show their commitment to corporate social responsibility. What is the importance of corporate social responsibility? The answer lies in two things: 1) organizations understanding their role in developing a society and 2) awareness among business houses, corporate bodies, and the people. Versatile, profitable, and dynamic businesses are the driving forces that build the economy of the country. We must remember that the growth of a country purely depends on the growth of the society and the people in the society.
BENEFITS OF CSR Organizations of all sizes are rapidly discovering that Corporate Social Responsibility (CSR) and sustainable business practices can foster improved green programs and overall environmental stewardship. Today, we are seeing increased awareness and active participation by business professionals in the development of CSR policies. Organizations are increasingly more involved in green initiatives by adopting sustainable processes and practices, adapting products and services to the low-carbon economy and innovating in all areas their business. The net positive on reducing waste, designing green buildings, implementing green operations and maintenance plans all have continually proven to yield a positive return on investment (ROI). CSR has come to rely on a more complex set of factors than corporate governance alone, and likewise also depends on sustainable development, environmental impact and supply chain management. The development of the new carbon trading markets, verified emission reductions (VERs), also known as carbon offsets, and renewable energy credits (RECs), it has become easier for organizations to create and measure direct ROI from CSR. Likewise, CSR efforts have shown to yield measurable returns in waste reduction, improved efficiency, diminished liabilities, improved community relations, and brand recognition. Through communicating clear and measurable sustainability objectives and the implementation of practical and equally functional corporate governance mechanisms, organizations are realizing that they can have a achieve ROI through their sustainability efforts. Integral strategies in ensuring substantive long-term results include:
Define path of progress in CSR and strategically manage expected organizational outcomes Ensure basic CSR values are culturally integrated across the organization Adopt an effective engagement strategy with stakeholders to create buyer awareness and loyalty Properly map organizational objectives and critical success indicators with CSR performance metrics
Innovative organizations that understand the value of CSR work to create a corporate culture in which each employee is committed to doing his or her part to improve the environment. According to Forrester Research , effective CSR and sustainability practices within large companies have been shown to contribute to a profit increase up to 35 percent.
Whats Your ROI? There are proven methodologies that demonstrate ROI benefits to CSR. A partial summary of such strategies has been outlined below and reflect best practices in the implementation of successful CSR programs designed to drive improved operational performance and net positive ROI. Business Benefit: Improving Operational Efficiency Perhaps the strongest and best documented argument for engaging employees in environmental practices is the connection between CSR involvement and increased operational efficiency. Front-line employees are often in the best position to identify inefficiencies and propose improvements. Educating employees on CSR can improve profitability by supporting greater efficiency through less waste, water and energy usage. Business Benefit: Innovation Employee E&S education is also a source of innovation and savings resulting from the development of new product and service lines as well as new technologies, materials or processes that reduce water, energy usage or harmful materials. Business Benefit: Supply Chain Management Educating employees on sustainability practices throughout the supply chain can lead to greater efficiencies and help build collaboration to meet sustainability, quality and other goals. It can also strengthen relationships between a company and its suppliers by aligning values and objectives. Business Benefit: Financial Responsibility We are seeing an unprecedented level of government programs and initiatives designed to drive corporate decision-making within markets that include manufacturing, construction, etc., to invest in implementing practical and measurable green building design, construction, operations, and maintenance solutions. In many cases, the good news is that implementation of sustainable operations can drive increased efficiency through reductions in energy consumption, implementation of building maintenance methodologies that are often cost neutral, and decreasing the
cost of workspaces through use of recycled furniture while changing too lowuse lighting (which provides eco-friendly work environments), to name a few. Government subsidies and incentives often further complement and reward efforts to develop and implement successful sustainable operations and maintenance programs. Nearly all of the points needed for LEED Certification (40 points) can be achieved through the energy and atmosphere category (35 points). It is by far the largest category within the rating system, and emphasizes the combination of energy performance and renewable energy, which has shown can lower costs by up to 50percent in the first year alone. It is widely accepted that green building occupants are healthier and much more productive in their work. With an average of 90 percent of Americans spending more of their time indoors, green buildings often have better indoor air quality and lighting, among other key advantages Measuring the impact of CSR in achieving social and environmental goals can be difficult, but is becoming more common if not expected within corporations, often as a factor of CSR. Typically in business, what gets measured gets managed, and as long as the right metrics system is created and data is tracked accurately, almost any environmental CSR initiative can yield positive results. There seems to be a direct correlation between the implementation of effective green programs and design of green buildings to improved office worker productivity and employee morale, while driving efficiencies and reduced consumption. Innovative, forward-thinking companies have learned that they must be fully committed to strategic initiatives that are directly tied to their business core competencies (or those of clients, employees, etc.). The advantages of doing so through an effective CSR program, such as building brand recognition, realizing increased sales and fostering trust with employees and community, can be achieved as a win-win in almost all situations. With committed leadership and a strategic approach most companies can find a substantial ROI benefit in CSR.
ABOUT AMUL
Industry
Founded
Key people
Chairman, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF) US$2.15 billion (201011) 735 employees of Marketing Arm. However, real pool consist of 3.03 million milk producer members
www.amul.com
Revenue Employees
Website
Introduction Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat, India. The word Amul ( ) is derived from the Sanskrit word Amulya( ), meaning invaluable. The co-operative is also sometimes referred to by the unofficial backronym: Anand Milk Union Limited. Formed in 1946, it is a brand managed by a cooperative body, the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by 3.03 million milk producers in Gujarat. Amul spurred India's White Revolution, which made the country the world's largest producer of milk and milk products. In the process Amul became the largest food brand in India and has also ventured into markets overseas. Dr Verghese Kurien, founder-chairman of the GCMMF for more than 30 years (19732006), is credited with the success of Amul.
Achievements of GCMMF
3.1 million milk producer member families 15,760 village societies 15 District Unions 9.4 million liters of milk procured per day 150 million (US$2.73 million) disbursed in cash daily GCMMF is the largest cooperative business of small producers with an annual turnover of 53 billion (US$964.6 million) The Govt. of India has honoured Amul with the Best of all categories Rajiv Gandhi National Quality Award. Largest milk handling capacity in Asia Largest cold chain network 48 Sales offices, 5000 wholesale distributors, 7 lakh retail outlets Export to 37 countries worth 150 crore (US$27.3 million) Winner of APEDA award for eleven consecutive years.
In 2011, Amul was named the Most Trusted brand in the Food and Beverages sector in The Brand Trust Report, published by Trust Research Advisory. rediff.com; "India's top 20 brands: Amul is No. 1"
Products
Amul's product range includes milk powders, milk, butter, ghee, cheese, Masti Dahi, Yoghurt, Buttermilk, chocolate, ice cream, cream, shrikhand, paneer, gulab jamuns, flavoured milk, basundi, Amul Pro brand and others. Amul PRO is a recently launched brown beverage just like bournvita and horlicks offering whey protein, DHA and essential nutrients to kids along with its chocolatty taste. In January 2006, Amul launched India's first sports drink Stamina, which competes with Coca Cola's Powerade and PepsiCo's Gatorade. Amul also offers mithaimate which successfully competes with milkmaid by nestle by offering more fat % at lower price. In August 2007, Amul introduced Kool Koko, a chocolate milk brand extending its product offering in the milk products segment. Other Amul brands are Amul Kool, a low calorie thirst quenching drink; Masti Butter Milk; Kool Cafe, ready to drink coffee and India's first sports drink Stamina. Amul's Icecreams are made from milk fat and thus are icecreams in real sense of the word, while many brands in India sell frozen desserts made from vegetable fat. Amul cares for its consumers and tries to offer them the best products at best price. Amul's sugar-free Pro-Biotic Ice-cream won The International Dairy Federation Marketing Award for 2007
The first step towards discharging the CSR is the business philosophy of the GCMMF. It is two-fold: one, to serve the interests of milk producers and second, to provide quality products to consumers as value for money. Evolution of an organisational system has ensured that the corporate social responsibility towards the primary milk producers, village and the ecological balance is fulfilled. The milk producers are paid for their milk in accordance with market forces and realisation of value for their produce. Invariably the price paid to the member-producers in Gujarat is higher by 15 per cent than the national average.
CSR-orientation To Distributors & Retailers
The GCMMF has identified the distributors and retailers are its important link in its vendor supply chain. Through surveys the GCMMF found that 90% of the distributors do not get any opportunity of exposure to latest management practices. The GCMMF realised that it was a corporate social responsibility to strengthen the core business processes of its distributors so as to keep them in mainstream business and compete with those with formal training in management. The GCMMF has developed and trained all its distributors through Value-Mission-Strategy Workshops, competence building, Amul Yatra, Amul Quality Circle meetings, computerisation, and electronic commerce activities. Competency Building Module of the GCMMF is meant to infuse professional selling skills by making the distributors and their salesmen aware of latest sales management tools and techniques; enhance their knowledge of products; positioning and segmentation strategies for various products. Under Amul Yatra the distributors and their salesmen are taken on a visit to Anand. During this visit they are shown dairy plants, their upkeep, international standards of hygiene and quality; the practices adopted for clean milk production, and above all the cooperative philosophy. Through one to one talk with the farmers, the distributors and salesmen realise AMUL is a large business of small farmers. The visit leaves an everlasting impression on their minds that by selling AMUL products, they are discharging a social responsibility towards a large number of poor farmers whose livelihood depends upon their skill and integrity. They feel proud that they are participants in development of rural society and thus in nation building.
Earnings Of GCMMF
Nurturing its primary members - the milk producers - is the first mission of the GCMMF. Discharge of this responsibility is reflected in the manner in which the GCMMF conducts its business and shares its earnings. The milk from the village co-operatives is purchased at an interim price. So as to maximise the earnings of the milk producers the GCMMF changes the product profile during the fiscal and directs its sales and marketing activities towards those products that would bring in maximum returns. True! Every business organisation follows the same principle. But the GCMMF follows it with
the central interest of the producers. During the fiscal, as the GCMMF finds that from its earnings it is possible to pay more to the producers for milk, the final price is declared higher than the interim price being paid. Before the GCMMF closes its financial accounts the co-operatives are paid price difference, the amount between the interim price and the final price. Thus profit of the GCMMF is very low. The net profit (PADT) of the GCMMF during 2003-04 was Rs 7.31 crore against a turnover of Rs 2,947 crore, a meagre 0.25%. Further out of the net profit of Rs 7.31 crore, Rs 4 crore was given as share dividend to the co-operatives. To fulfill its corporate social responsibility towards its milk producers and co-operatives the GCMMF works on razor thin profits and retention of funds.
CSR-oriented To Staff
The GCMMF hires and trains people to take advantage over its competitors. It has developed in-house modules for training and competence building to improve and up grade of their knowledge; communication skills to understand the customer, be responsive to customer requirements, and communicate clearly for trouble shooting of problems. They are expected to be courteous, friendly, respectful, and considerate to the customer. To improve the credibility and trustworthiness of the managers it is important they perform consistently and accurately every time and at all times. The structure of salary and perquisites is altogether different. The first and foremost the staff must get satisfaction from the job they. They are recognised for their contribution (Climate Survey) CSR-AMUL WAY
A school reconstructed by Amul Relief Trust in the earthquake affected Devpar Village in Mandvi Taluka of Gujarat A school reconstructed by Amul Relief Trust in the earthquake affected Toda Village in Mundra Taluka of Gujarat A school reconstructed by Amul Relief Trust in the earthquake affected Moti Bhadai Village in Mandvi Taluka of Gujarat A school reconstructed by Amul Relief Trust in the earthquake affected Kathada Village in Mandvi Taluka of Gujarat
Tree Plantation
GREEN GUJARAT TREE PLANTATION CAMPAIGN BY MILK PRODUCERS OF DAIRY COOPERATIVES Amul Coops plant more than 311.98 lakhs trees
Milk Producer members of Gujarat Dairy Cooperatives- better known as AMUL have been celebrating the nation's Independence Day in a novel manner by planting lakhs of saplings across Gujarat and have taken up an ambitious plan to save the environment by planting trees, making India green and thereby reducing the effects of global warming. The milk producers of Gujarat Dairy Cooperatives are conducting mass tree plantation drive every year on Independence Day for last five years. In last five years (2007 to 2011) the milk producers have planted around 311.98 lakhs trees). The most striking feature of these entire programmes was that it has been initiated by milk producer members of the dairy cooperatives. The unique fact about the programme was that the milk producer members took up the oath to protect tree saplings till it survives and grows into tree. Over the years, due to intensive agriculture and dairying various natural resources are getting consumed at faster pace in Gujarat state of India. The state level apex body of dairy farmers in Gujarat gave a serious thought in this direction and discovered a novel idea for giving back to nature. The idea was "one member one tree" plantation on our 60th Independence day - 15th August 2007.To put this idea in to the practice a design team constituting of representatives of member unions were formed. The team accepted the idea by heart and immediately decided to spread it among farmer members of village dairy cooperative societies. Then the idea was communicated to farmer members and they all welcomed it and enthusiastically agreed to implement the idea. For smooth implementation of the idea, the design team chalked out the road map for various activities. Execution teams were formed at district union level to give final shape and put the plan in action. Village level coordinators were identified and they were trained to streamline activity of tree plantation. Various awareness materials were
prepared. Through various communication media farmer members were made aware of benefits of tree plantation and tree plantation activity schedule
The entire plantation activity was coordinated at all the three tiers of Anand pattern - at village, district and state level dairy cooperatives. On 15th August, 2007, after the flag hoisting ceremony, each member took an oath to plant saplings and ensure that they grew in to trees. Then individually they planted sapling on their own at their identified locations like their farm, near their home, on Farm bunds, etc. They have taken necessary care to ensure that this sapling survives and they also reported regarding the survival to village level coordinator and district milk unions after five months. In this way, 18.9 lakh trees were planted on 15th August 2007. This was just the beginning. Henceforth, the Village Dairy Cooperative Societies of Gujarat as a mark of respect for our nation decided to conduct such event on every Independence Day and accepted 15th August (Independence Day) as a "Green Revolution Day by Afforestation to Protect Mother Earth from Pollution, Climate change and Global Warming".
But all this required immaculate planning and execution. An action plan of tree plantation programme was drawn up months back in advance. After the identification of the chief coordinator for each district milk union, the organization of a task force for the programme was put in place. Roles and responsibilities were assigned to each member and area of operation allocated. After preparing the overall action plan, each union issued a circular to the Dairy Cooperative Societies regarding the programme and
arranged meetings with the societies covered. At the village level, coordinators were identified in respect of the villages to be covered and the number of saplings required. Along with logistical arrangements direct contact was established with different agencies for receipt of saplings. Pointwise methodology for implementation of tree plantation programme on such a mass scale is as following.
Point wise Methodology of execution of programme is as following:
1. Member Unions were informed about the programme and channels of procurement of saplings, almost six month before to scheduled date of programme. 2. Continuous follow up were taken from the member unions about the status of activities planned for the programme. 3. A meeting on tree plantation programme was held at GCMMF Ltd., Anand almost a month ago in which status of action plan was each Member Union was discussed at length. 4. Milk Unions identified the coordinator for the programme and organized a task force for the successful implementation of the programme. The coordinator at Milk Union level chalked out overall action plan for the programme and assigned roles and responsibilities and area of operation to each member of task force. 5. Milk Unions (MUs) issued circular to their respective VDCSs (Village Dairy Cooperative Societies) mentioning the entire activity and procedure planned for the celebration of the programme. In circular details for milk producer members to make necessary preparations like deciding the place, digging the pit, taking care of saplings etc. well in advance were also provided. The circular was placed on notice board of VDCSs. 6. MUs task force members contacted & communicated about the concept to VDCS and identified the village level coordinator and assigned them roles and responsibilities. 7. MUs Coordinator properly explored and communicated the saplings acquiring sources/nursery details to VDCSs. They also ensured that saplings reach the VDCSs before 3 days. 8. A press note was prepared by the coordinator of the programme at MU level and which were given in the newspapers on a day before tree plantation to boost morale of producer members and mentally prepare them for the execution of programme on next day. 9. At time of handing over the saplings to members from VDCS, the producer members took oath to protect the saplings and accepted the responsibility for successfully growing the sapling into tree. 10. On 15th August, after the milk collection process, at a predecided time sirens at VDCSs were sounded or other means like beating Thali/utensil, loudspeaker etc. were used to facilitate the gathering producer members in time at predecided place in the village for celebration of Independence Day in VDCS premises, common plot, school etc. After flag hoisting ceremony, the tree plantation activity was executed by the producer members. 11. In many villages the milk producer members planted the trees after performing the Puja (worship) of saplings before planting them.
12. To add fervour and enthusiasm in the programme at many places the Chairman, Managing Director and Board of Directors of Member Unions participated in the programme. 13. Next day after the programme on a post programme press note was prepared giving details of the programme celebrations along with photographs. Similar such notes were published in house magazines/ newsletters. 14. After the completion of the programme the MU's were asked to submit the report on tree plantation activity. 15. MUs conducted survey after 5 months to find out the survival rate of sapling under the programme. First tree plantation programme (15th August, 2007) was carried out on "one member, One tree" basis. Second tree plantation programme (15th August, 2008) in which around 52.74 lakhs tree were planted was conducted on "one member three tree" basis. In year 2009 and in year 2010, in mass tree plantation programme around 84.24 and 83.5 lakhs tree saplings were planted respectively. The programme was conducted on "One member, Five tree" basis. Further, this year 2011 around 72.6 lakhs trees were planted, the programme was carried out as per the same process and procedures followed in last year. Hence, in last five years, milk producers of GCMMF planted around 311.98 lakhs tree saplings in 21 districts of Gujarat. By doing so, milk producers of Gujarat Dairy Cooperatives have shown their concern, awareness and commitment for betterment of environment.Yearwise details of tree plantation and survival of tree saplings planted is as under.
Sr. No Year of tree plantation No. of trees planted (in lakhs) No. of trees Survived (in lakhs) Survival percentage 1 2 3 4 5 2007 2008 2009 2010 2011* Total 18.90 52.74 84.24 83.5 72.6 311.98 11 26 38 39 34 148.122 58 49 45 47 47 47
*estimated (as survey for survival percentage of the saplings planted in year 2010 is ongoing)
According to statistics of Forest Survey of India considering on an average 30-40 cm diameter of these trees, 106 trees would provide one hectare of green tree cover. Considering 47% survivability of planted trees (based on post plantation survey data, around 148.12 lakhs out of 311.98 lakhs tree planted survived during last five years), when they fully grow up, would provide additional 1,39,735 ha. of green cover which is additional 6.41 percent forest cover of Gujarat State of India. Achievements:
This effort to provide green cover to the earth was also acknowledged when the state level apex body of Gujarat Dairy Cooperatives - GCMMF received four successive prestigious "SRISHTI's G-Cube Award"-2007, 2008, 2009 and 2010 for Good Green Governance in the "Service Category". Further, "Amul Green" movement has also been awarded by International Dairy Federation for best environment initiative in the "sustainability category" during the 4th Global Dairy Conference held at Salzburg Congress Center, Austria on 28th April, 2010.
It has been estimated that when one tree is cut, in monetary terms there is loss or Rs. 33 lakhs (Oxygen worth of Rs. 5.3 lakhs, Land Fertility of Rs. 6.4 lakhs, Rs. 10.5 lakh for reduction of pollution of atmosphere and Rs. 5.3 lakh towards Flowers / Fruits and habitation to birds - animals). But the benefits that accrue to mankind when a tree is planted cannot be measured in money and is priceless. The producer members of GCMMF have really set an example for all the cooperatives and other institutions to turn India green in the era of Global warming and environmental crisis. When 3 million dairy farmers of Gujarat have planted more than 311.98 lakh trees in just five years and are planning to plant more trees every year, they are doing an invaluable - truly Amul - service to the society. In an era of global warming, Amul is contributing its share in making Gujarat lush green. In this way, the milk producers of Gujarat are ushering in a silent revolution of greening Gujarat.