Philip Chacko

The Tata Index for Sustainable Human Development is a trendsetting attempt to map and measure the social development endeavours of Tata Group companies

There were plenty of laudatory references to India in the 'human development index' released recently by the United Nations Development Programme (UNDP), but the bellwether guide that ranks 175 nations on indicators such as income, health, education places this country at 127th, three rungs lower than a year back. How can corporate India help in hauling the country up from this bleak slot? The Tata Index for Sustainable Human Development provides a modest answer.

The Tata Index is a matrix through which Tata companies can implement, direct and measure the social development endeavours they are involved in. Developed by the Tata Council for Community Initiatives (TCCI), the umbrella entity that coordinates and integrates the various social projects undertaken across the group, the Index brings business processes to bear on the development work done by various Tata companies as part of their social responsibility.

"This is not some grand thing we are doing," says Anant G. Nadkarni, general manager, Group Corporate Social Responsibility. "We have adopted a business model to drive social responsibility efforts within the group because that way you ensure a huge network. Also, the emphasis on measuring the impact of these programmes is greater now than ever before. The Index will help structure our efforts and quantity their effect on the communities and people they are aimed at."

The Index is actually a set of guidelines for Tata companies looking to fulfil their social responsibilities, and it is the third set of such guidelines crafted by TCCI. Established in 1996, the Council came out with the first set in 1997. A revised version was brought out in 2000. The Index is an improvement of the two guidelines that preceded it, and it has been built around the Tata Business Excellence Model (TBEM), an open-ended framework that drives business excellence in Tata companies. Companies that embrace the TBEM concept are evaluated in seven categories, and ranked on the basis of their scores in each.

The Tata Index is constructed around the core beliefs of the Tata Group in the matter of corporate social responsibility. These include serving the wider community, protecting the environment, using core competence to help the poor, becoming partners in development, encouraging volunteerism, and pursuing socially sustainable activities.

The Index prescribes an 'assurance' process to ensure that the community development projects are measured and reviewed so that they perform in a manner that matches the objectives behind them. This assurance links processes to outcomes and divides the entire corporate social responsibility function into three levels: systems, people and programmes.

The connection between process and outcome is vital. Process refers to how the requirements of a particular parameter are addressed. The factors used to evaluate this include use of appropriateness of methods, their effectiveness, and whether they can be repeated. Another aspect of the process equation is deployment. Outcome signifies the specific results of the process (the cause-and-effect methodology). It is measured through criteria such as current performance, which is relative to valid benchmarks, and the extent of improvement.

Within the three assessment levels there are different scoring bands and varied sub-levels. The systems level-gauges factors affecting the management of the corporate social responsibility challenge: leadership commitment, structure and deployment, strategy, review, etc. This level offers 275 of a total of 1,000 points. The people level measures parameters such as selection of personnel, training and volunteering. It adds up to 175 points.

The programme level, the most important of the three, as reflected in a total score of 550 points, deals with the impact on the ground. The factors that come into play here are many, ranging from social concerns and scope for self-reliance and sustenance to knowledge transfer and good governance.

"The marks are just for the sake of having a scoring measure, for putting a number to this endeavour," says Mr Nadkarni. "In itself it doesn't mean anything… We needed to have a link between the activity and our goal of improving in the quality of life of the communities we operate in. We have created high levels of human excellence, a broad highway on which we have devoted our activities. We can now see, for the first time, where we are."

Mr Nadkarni believes that the Index is but the beginning of something that he hopes will get entrenched in the coming years. To start with, 20 of the biggest Tata companies will be evaluating their social development efforts through the prism of the Index. "Frankly speaking, it is about first getting acceptability among our own employees." Once that happens, as it surely must, Mr Nadkarni expects the Index to be applied across the board. "Scoring points is not supreme at the moment, because this is the first course. The scores will play their part in the second and third phases."

Human resource departments in different Tata companies have been given the task of driving the Index. Mr Nadkarni has an explanation for this. "HR has the policies in hand; it is best equipped to handle this. Also, if you really want to have learning organisations, you must have learning people - people who learn from outside realities with respect to their own core competence. HR knows about these things."

Mr Nadkarni sees the Index as a work in progress, not some edict set in stone. "I am not saying that this is the holiest thing we have done. People are going to refine it, tear it apart, maybe, and make something new. What we have here is a framework; that's the spirit in which the Index was crafted. Our concern right now is about ensuring uniformity and consistency [with regard to corporate social responsibility across group companies]."

The UNDP has termed the Index a trendsetter, and other organisations have also praised it. TCCI has been invited to make presentations on the Index by the World Business Council for Sustainable Development in Geneva and by the Federal Department of Community Services, Australia. The Confederation of Indian Industry has asked for 200 copies of the Index to send to its members.

As Mr Nadkarni says, community development is a way of life for the Tatas. "With the Index in place, we can walk the talk coherently and systematically." The challenge India faces in lifting its people on the social development scale is immense. TCCI is playing a small part in helping the country overcome the odds in this battle.

Uploaded in March 2005