Infosys and Corporate Social Responsibility in India

Corporate Social Responsibility (CSR) is defined as a business’s policy to encourage positive impact through its activities on the environment, consumers, employees, communities and all other member of the public who may be considered its stakeholders. [8]

Analysis

The Infosys Foundation

The Infosys Foundation was established in the year 1996 with the goal of serving the under-privileged sections of the society

The focus areas of the foundation are:

Learning and education in 2007, the foundation embarked on the ‘Library for Every Rural School’ program to get people to donate books in Karnataka, Andhra Pradesh, Orissa, and Kerala.

It has since set up 35,000 school libraries, the largest rural education program in India.

Healthcare

Since its inception in 1996, the foundation has constructed hospital wards, donated medicines and advanced medical equipment to hospitals, and organized health camps in remote areas, all in order to get the under-privileged access to modern medical practices.

Arts & Culture

The Infosys Foundation sustains and preserves several art forms that are unique to our country and form a part of our heritage.

Over the years it has sponsored art and music shows by rural artists, sponsored documentaries on Indian culture and published books that delineate the roots of art in Karnataka.

Social Rehabilitation and Rural Uplift

The foundation works for the welfare of destitute women and children and also helps towards developing rural India by providing education and vocational skills. It has built orphanages where education is prioritized and organized training centres for destitute women in and around Karnataka.

Assessment

There are a number of observations to be made from the above.

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Firstly, Infosys is seen to be engaged in various, unconnected welfare activities. Though laudable, this may not be the best policy to adopt towards CSR because many of these have little or no relevance to its core business ability. Thus, there is a chance that it may drop them in the future if aspects of the activities start to clash with their normal business working. This will damage the entire premise of sustainability that the company promotes about its CSR.

The extremely local nature of these activities (most are based in and around Karnataka) show that Infosys is perhaps trying to build a good relationship at home where it wants to address as many problems as possible. However, scaling up of these activities will be the real test of its CSR practices because being a global company it cannot afford to limit its welfare activities to only one region. This may raise questions about their sincerity as their efforts may be construed as simply trying to appease the authorities at home and maybe get benefits over its competition.

In the next section we will see that in matters in which it has expertise, Infosys has already expanded its activities to the global level.

Sustainable Social Change

Infosys makes the proud claim of influencing sustainable social change through its varied development initiatives. [1] The following are some of these initiatives:

Education and Intellectual Capability

It is no secret that India is engineering-mad with Indian Engineering Institutions churning out over 500,000 science and engineering graduates every year. However, even as rival IT companies and a host of other recruiters vie with Infosys over the recruitment of the fresh, inexpensive engineering talent, there is little that these corporates have done to aid in the recognition and reward of top Indian research. This is a matter of pressing concern because not only does this hamper the intellectual capital of our country in relation to competition from overseas (Even China has more PhD’s per capita than India) but it promotes a lack of systematic learning that ultimately results in making a lot of these graduates unfit for immediate industrial employment. It is here that Infosys has once again differentiated itself from the competition by undertaking ventures that promote science and engineering education as more than simply a means of landing a job.

The Infosys Science Foundation (ISF) was set up with the goal of achieving the above. It was set up by some of the company’s founder members in February 2009 with the aim to “elevate the prestige of scientific research in India and inspire young Indians to choose a vocation in scientific research”. The ISF honours outstanding contributions and achievements by Indians in various streams of science with the Infosys Prize in five categories: mathematical sciences, physical sciences, engineering and computer sciences, life sciences and social sciences. The award is given to Indian scientists below the age of 50.

The Foundation is funded by an amount of Rs. 215,000,000 contributed by the members of the Infosys Board and an annual grant from Infosys Tech. Ltd. The annual award in each category amounts to Rs. 5,000,000. The importance of this award is highlighted by the names of its past winners and their achievements, for e.g. last year the award for Life Sciences went to Dr. Chetan Chitnis for having discovered the first viable malaria vaccine and the award for Engineering Sciences went to Prof. Ashutosh Sharma for his applications in energy storage.

Along similar lines is the ACM – Infosys Foundation Award in Computer Sciences, established in August 2007 and carrying a cash award of USD 150,000 provided by the Infosys Foundation Endowment. It aims to reward educators and researchers whose work in software systems foster innovations that address existing challenges in the domain.

Assessment

Unlike a number of Indian companies whose education related welfare activities focus primarily on issues of primary/basic education, Infosys’ initiatives are unique in that they are associated exclusively with the domain of higher technical education, a segment in which it is arguably the most respected company in the country. This allows it to create perfect synergy between its everyday business activities and its investments in the above initiatives because unlike a lot of other companies who get into CSR without doing their homework and as a result get accused of doing it for ulterior motives, Infosys’ engagement with the field of technical education is a natural extension of its business practices.

Its approach in this direction must also be lauded. While Narayana Murty has been accused in the past of favouring foreign universities when it came to giving grants, his decision of having Infosys establish the above awards is a godsend for the research establishment in India because though grants may be siphoned off by agencies without the threat of accountability, awarding individuals for their excellence is more effective as it provides a greater encouragement for others to follow in their shoes.

But Infosys has not completely ignored the primary and secondary education sectors either. It has just approached it in a different way and yet received accolades all the same. A case in point is the Akshaya Patra Foundation, which was founded in 2000 and has three senior Infosys members apart from numerous Infosys volunteers who work towards providing free midday meals to schoolchildren. The foundations functions in partnership with state and central governments and currently serves over 1.3 million students in 7699 schools across India. Its impact is easy to assess from third party recognitions: it was awarded an International Fellowship by the US Congressional Hunger Centre, it received the 2008 CNBC India Business Leader of the Year Award and it even made it to the MBA curriculum as a case study at the Harvard School of Business in 2007.

Similarly, Infosys BPO’s work on ‘Project Genesis’, under which it works to improve the written and spoken communication capabilities in addition to the analytical skills of students in Tier 2 and 3 towns of the country so that they become employable, was awarded as the best CSR initiative at the 8th National Outsourcing Association (NOA) Awards 2011, in London. It was especially lauded for making sure that no expense was incurred by the participating academicians in the program.

Community Development

Unlike the education schemes already mentioned, community development initiatives do not at first seem the best fit with the company’s existing activities. However, Infosys has done its share of work in this domain too and while most of it has been in the vicinity of its offices, there are projects like the Flood Relief Project for the victims of northern Karnataka in which the company has participated quite actively. Only last year the first phase of their initiative to construct 2250 houses across 18 villages was completed and subsequently these houses were handed over to the villagers.

Assessment

This aspect of Infosys’ CSR efforts can also be criticized for not matching with the core business abilities of the organization. The question to be asked is whether Infosys could have done a better job as simply a service consultant (a domain in which it already has expertise) to a third-party organization and have the latter handle the actual on-ground developmental work.

Also, nearly all of Infosys’ developmental work has come in the neighbourhood of Karnataka. The scalability of this work can be called into question much like in the case of the Infosys Foundation. Regionalized developmental work can always raise questions about its sincerity, i.e. whether they are simply means to appease the local public/authorities.

Infosys Eco Group

Plans and Implementation

Infosys has been considering the worsening impact of businesses on the environment for several years and has understood the importance of a clean environment and energy efficient solutions. It has hence committed itself to come up with innovations which positively impact the environment and can lead to large energy savings. Many of these have been implemented at Infosys itself. Under this initiative of “Green Innovation”, Infosys has not only come with a number of ideas but has also implemented some of them in tangible forms:

iSustain: Carbon energy and resource management tool that helps the user to generate and monitor the use of various resources such as energy and water etc. being used, take majors to allot them efficiently and also monitor the carbon footprint.

InGreen Energy Management: A tool used by Infosys to monitor the energy consumption at micro level and to take majors to cut on unnecessary usage. Using this, Infosys has been successfully reducing its carbon emission at a rate of more than 5% per annum.

InGreen Personal Carbon Calculator: A tool that helps the user organizations to assess their impact on ecological systems in terms of carbon emission.

Smart Integrator for Smart Grid: A device that continuously monitors the power usage of various devices in the range using a sensor and controls them accordingly.

Infosys also plans to become carbon neutral and shift to entirely renewable energy by 2017.

The steps taken for the same seem to be promising which include building of renewable energy power generation plants (recently they have built a solar energy plant at Jaipur Campus) and aiming for a platinum rating, the highest rating given by LEED (Leadership in Energy and Environmental Design) for environment friendly architecture. In January 2012, the third building at the Mysore Campus achieved this rating.

Besides these, Infosys has been taking small but effective measures to reduce its own energy consumption, such as building designs with maximum exposure to natural light, design of windows which could lead to reduction in room temperature thus saving on air conditioning consumption of energy, increasing use of green power and use of recycled water. (Refer Exhibit 1)

Assessment

In year 2011, Infosys has saved more than 4 lakh units of conventional energy units through the use of the renewable energy sources. Not only has this helped in energy conservation but it has also resulted in savings of Rs. 20 Crore for the organization. In a similar way, innovative ideas such as smart integrator, rooms having maximum exposure to day light, optimum room temperature maintenance measures and use of LED and CFL tubes in place of conventional ones saved more than 7 lakh units of electricity, accounting for monetary benefit of Rs. 35 lakhs.

In addition to these, Infosys is working closely with the Karnataka Government and Karnataka Electricity Regulatory Commission (KERC) for implementation of renewable energy power plants. It has been successful in convincing KERC to remove the cross-subsidy on renewable energy thus reducing its cost. Moreover as a result of these efforts, KERC has made it compulsory for the power utilities in Karnataka to buy at least 0.25% of total energy in form of solar energy, which will cost the end users only 4 paise more than regular rate per unit.

Though listed under the CSR activities and initiated as ‘Green Innovations’, the activities mentioned above are not only intended to improve the environmental conditions as a social need but are also aimed at a reduction in Infosys’ energy consumption thereby giving it a competitive advantage as it can sell these innovative solutions to its clients as well. It is these latter observations that have been points of concern for critics who blame Infosys of hyping its energy savings and accuse it of ‘Greenwashing’. [18]

Employee-Driven CSR

Employees at Infosys are given ample opportunities to contribute to the society. This way of engaging employees to have hands on experience on CSR can also help the society, which needs responsible citizens to contribute man hours. The policy also helps these employees to attain their personal aspirations of serving the society.

This sabbatical policy was initiated in the year 2008, where all the employees are encouraged to work through Infosys Foundation to support the needs of the society. The company as an entity is greatly supportive of its employees in executing the initiatives.

The employees are made to pledge that they will make a difference to the society on a consistent basis. For effective execution, the company has individual divisions which run independent of each other under major themes like Health, Art, Education, Rural welfare and Rehabilitation and Targeted inclusive growth.

A governance framework has also been put in place to streamline and implement the employee driven CSR initiatives in order to provide operational efficiencies and financial transparency.