ITC’s CSR – Social Development Blended with Marketing Strategy

ITC is an Indian conglomerate, which was started mainly as cigarette manufacturing company in the year 1910. However, it has now diversified presence in many other industries such as Hotels, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel etc. ITC is the first Indian company and tenth in the world to come up with its sustainability report on yearly basis in compliance (at the highest A+ level) with the G3 guidelines of the Global Reporting Initiative (GRI). The various initiatives taken by the organization are as follows:

E-Choupal

ITC’s Agri Business Division, one of India’s largest exporters of agricultural commodities, has conceived E-Choupal as a more efficient supply chain aimed at delivering value to its customers around the world on a sustainable basis. The E-Choupal initiative also helped farmers to break the shackles of low investment, weak market orientation and low risk taking ability. E-Choupal serves as a place of social gathering and place of exchange of information for farmers. A computer linked with internet serves to almost 600 farmers at one time to access daily prices of local markets and price trends of global markets or find information about new farming technologies. The E-Choupal is used to order seed, fertilizer, and other products such as consumer goods from ITC or its partners, at prices lower than those available from village traders. At harvest time, ITC offers to buy the crop directly from the farmers at previous day’s closing price.

Social and Farm Forestry

This unique initiative by ITC benefitted around 19000 poor households in approximately 500 villages and helped to bring 16,400 hectares of wasteland for some use. This way the owners of these wasteland, who are generally out of work for good period of a year, have gained new way to earn by using their wasteland for pulpwood plantation. ITC also provides them with all the necessary training related to silviculture, land development and plantation maintenance.

Integrated Watershed Development

ITC has observed over the years that many communities with whom it is having some association in villages have struggling with erratic rainfall patterns leading to large scale crop failures. This has been the main reason for farmers leaving their villages. ITC’s watershed initiatives have led to an improvement of irrigation facility and thus improving the water tables. This development program indirectly also helps ITC since it enables farmers to extend the cultivation cycle and return to multiple cropping. Till date, ITC has assisted farming communities in 22 districts across 7 states

Women’s Empowerment

ITC’s has shown firm commitment towards women empowerment in rural society by forming women credit groups. The empowerment of women has a catalytic effect in rural society, strengthening their voice in the community, forcing attention on human development issues of child rearing, education, health and gender parity. ITC’s focus is on Micro-credit that plays a foundational role in their economic empowerment and helps women into micro-credit self-help groups. Groups of 10-20 women form common funds through individual monthly contributions where they can also borrow money from their group funds to start income generation projects. It also provides training in bank and accounting operations to help them get the access of bank loans and government development programmes.

Primary Education

“School going becomes an empowering process for the child and the community. The awareness of entitlements like education and health grows, along with a sense of the community’s responsibility.”  ITC in its rural endeavour wants to provide primary education in order to address the problem of economic weakness rural families. “ITC’s initiatives are aimed at (i) improving infrastructure in Government schools, (ii) providing supplementary education to support children with school learning and exam preparation and (iii) building community and parental involvement with school education so that more children go to school and finish school.” It also provides infrastructure facilities to primary schools such as drinking water tanks, toilets, lights and fans, desks etc. It also has a network of 353 libraries, resource centers, Roaming Laptops program and mobile library services covering 310 schools.

Critical Analysis

ITC’s is doing lot of CSR activities in rural region of India. Although it seems that most of these activities are done to develop positive image of ITC (it has negative sentiment going against it for many years, as their main business has been cigarette manufacturing) and help achieve its marketing objectives, all the initiatives taken by ITC are unique and sincere in nature. Apart from the marketing gain, some of the initiatives also help it to achieve financial and operational objectives since these activities are related to its functioning as company. For example, the success of E-chaupal and social and farm forestry is crucial for its operation in certain industries. When Classmate notebooks were launched, it came up with the initiative of contributing 1 rupee towards the education of poor children, from every single notebook it sold. On the environmental front, ITC has achieved 'Carbon Positive' - five years in a row; 'Water Positive’ for eight consecutive years (creating three times more rainwater harvesting potential than ITC's net consumption); Waste Recycling Positive for the last three years. Also, it utilizes renewable sources of energy which is 31% of total energy consumed. Its environment, health and safety management systems conform to international standards.