CSR, Sustainability and the Plastic Industry

According to an Assocham study the size of Indias plastics industry may touch Rs 1.7 lakh crore by 2015 on account of rising consumption. At present, the Rs 1.02 lakh crore sector is growing at a compounded annual growth rate of about 20 per cent. Add to this the fact that plastics are one of worst products to dispose, taking hundreds of years to degrade. Given the scale and wide usage of plastics we decided to study sustainability and CSR activities of ET 500 companies manufacturing plastics.

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Low level of Sustainability reporting

It is interesting to note that out of the 12 companies studied only one, Polyplex, produces a sustainability report. The remaining companies provide information through their annual reports and websites. Thus plastic companies in India are disclosing at a basic level. They need to do more to strategically communicate their sustainability and CSR related activities.

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CSR initiatives are community focused

A study of the CSR activities indicates that almost all companies CSR initiatives are community focused. In contrast to our study on automotive companies, the focus on employees, consumers, suppliers and dealers is almost absent. The initiatives for employees are mostly limited to Occupational Health and Safety, Trainings, Meetings, 360 degree feedback etc. The customer related initiatives are very rare and only focus on customer feedback, engagement.

Most non-community based initiatives are either small or mandated activities. Also, just like the automotive study, community based initiatives tend to be near the plant/factory. Although keeping the nearby community engaged is important for self-sustenance, there are pressing needs away from the plant that also needs attention. The key areas in community based initiatives are community development, healthcare, education and environment.

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Sustainability initiatives need more attention

While most of the plastic companies are doing necessary initiatives in the areas such as Water Management, Rain Water Harvesting, Waste Management, Greenbelt development, Effluent Discharge, Energy Management, Wind/Solar Power and Carbon Emission etc, efforts are required from these companies to take up initiatives on plastic on a long term basis. Reuse, recover and recycle principles need to be both propagated and adopted by companies to take care of the menace of plastics. A study of the annual reports and websites of plastic companies does not provide much room that conscious effort is underway to take care of the planet.

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Can the plastic industry strike a balance between profit and planet?

This is not a utopian expectation. Firms need to strike a balance between profits and their responsibility towards the environment. The need is to educate consumers about proper disposal of plastics and in addition implement technologies that support proper reuse, recovery and recycle of plastic waste.

As we have been writing, doing good alone is not enough. It needs to be communicated as well. Companies need to take a strategic approach towards creating worthwhile CSR and sustainability initiatives and communicating them improve brand salience and creates a positive image in consumer’s mind leading to higher profits.

On communication it is interesting to note that most companies are communicating mainly through annual reports. Only one company provides a sustainability report. This strengthens our argument that communication of CSR and sustainability efforts deserves far greater effort than it currently receives.

This study was supported by IIM Udaipur. We would like to thank Prof Janat Shah, Director IIM Udaipur for his contribution and support.

 

Article coauthored with Utkarsh Majmudar and originally published in Economic Times.

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