In a free enterprise, the community is not just another stakeholder in business; it is in fact the very purpose of its existence. CSR professionals in the real estate sector have to understand the social and environmental impacts and come out with a detailed Social and Environmental Risk Materiality mapping.
Corporate Social Responsibility (CSR) in India came into limelight with the amendment in the Companies Act of 2013 which makes it mandatory for companies to spend two per cent of their three-year average annual net profits on CSR activities in each financial year. However, CSR as a concept is not new. It is as old as business itself. Responsible and socially-aware companies engaged in CSR projects even 50 years back. In India, this principle traces its roots to ancient history and dates back to the days of Chanakya.
Real estate industry contributes about nine per cent to India’s GDP. In India, it is the second largest employer after agriculture and is slated to grow at 30 per cent over the next decade. The benefits of real estate sector are obvious. It provides
employment to the local population,
develops the infrastructure in the area, and
gives boosts to connectivity.
But this is just one side of the coin.
There is always a debate on development
and environment and how a right balance
between the two has to be struck. Real
estate industry impacts the society
both negatively and positively. While
development creates jobs and raises the
standard of living, it also causes pollution,
deforestation and increase in global
warming. The real estate sector has to
find a way to eradicate the “ecology or
the economy” mindset and strive for an
infrastructure that embraces both. When
exploring new sites for development, it’s
important for the industry to realise that
there is a key linkage between ecosystems
and human well-being.
Real estate development comes with its
own set of problems. The most pressing
issue is that of land acquisition. Land
acquired by real estate developers has
to take into consideration the effect of
biocapacity and ecological footprint
deficit and a mitigation strategy has to be
developed especially if land was intended
for agricultural use. Another issue faced
by locals is pollution when the area is
in the process of development. Since
real estate construction requires long
gestation period, the transitional phase to
development is the most painful for the
local population.
This small village which was previously
sleepy, non-descript, pollution free and
without noise transforms into a hub of
activity, with movement of construction
material. Big infrastructure development
projects in various ecosystems in coastal,
mainland, desert or mountain areas
generally come in close proximity of
ecologically important areas. It is therefore
very essential to assess the environmental
and social impacts that these projects are
going to have in the value chain since human
survival depends on a complex chain of
ecosystem processes and biodiversity.
Unfortunately, some of the big-ticket
developments are often environmentally
and ecologically unsustainable, divorced
from understanding and serving the
needs of local population. While pursuing
a real estate development, developers
need to take into account the country’s
social and business customs. They need
to understand that the local population is
an important stakeholder in the project
among others and that the need of each
stakeholder is different.
CSR professionals in the real estate
sector have to understand the social and
environmental impacts and come out with
a detailed Social and Environmental Risk
Materiality mapping so as to understand
all the impacts and their consequences.
Based on this appropriate mitigation plans
for short-, mid- and long-terms have to be
made. The complete CSR plan has to be
strategic than responsive. It must have a
proper stakeholders mapping done and
develop strategies for the complete value
chain. They have to develop indices for
measuring the effectiveness, efficiency and
satisfaction of the communities of their
interventions.
Real estate development agencies have
also to understand that their business
partners hail from these communities.
They have to nurture these communities
from the very beginning and not only
when the project is being launched or
being formulated. If entering the area on
their own, they need to engage with the
civil society to kick-start the dialogue with
the communities. If entering an area along
with an existing enterprise, they need to
build on the social capital that already
exists. They have to believe in and practise
a ‘partnership’ approach that values skill
sets, including those of the civil society.
CSR of real estate companies should have
proper community engagement policy
and manuals that lists the principles and
processes of community engagement. They
should have processes for establishing
various development committees (Area
Development Committee/Rehabilitation &
Resettlement Committee) with adequate
representation from all communities. They
have to regularly hold meetings with these
committees to discuss plans and their
implementation and understand their
activities they could potentially generate
within the community. Real estate industry
has to also integrate its CSR processes with
their business processes.
In a free enterprise, the community is
not just another stakeholder in business; it
is in fact the very purpose of its existence.
We feel that no success or achievement
in material terms is worthwhile unless it
serves the needs or interests of the country
and its people. While this thought anchors
our operations, it embraces societal
interest at a macro level. We try to live
this at a micro level as well. Our company
inculcates the culture of preservation
of nature and natural resources. This is
done in collaboration with the people,
local governments and NGOs residing in
our areas through CSR activities such as
afforestation, arboriculture, biodiversity
conservation, etc.
Gurgaon Rejuvenation Project is one
of the new CSR initiatives which the DLF
Foundation is launching. Gurgaon was a
barren land over two decades ago following
which it has undergone unprecedented
growth and transformation so massive that
it has got the tag as the Millennium City post
2000. The city has witnessed unparallel
fast track urbanization, driven by a group
of well-intentioned entrepreneurial
organizations in the realty sector. They
have contributed immensely to the sudden
growth of an ultra-modern city.
While the city has witnessed exponential
growth, it is also plagued by many serious
civic problems, such as poorly maintained
roads, encroachments, frequent traffic
jams, water-logging due to lack of adequate
drainage systems, mushrooming of slums,
safety and security, etc to name a few.
In the Gurgaon Rejuvenation Project,
DLF Foundation is planning to take up
the role of a catalyst by demonstrating
few CSR model projects which could be
replicated or upscaled. This will ensure
that relevant stakeholders are brought
around to discuss and actively pursue for
solutions to problems like water-logging,
waste management, transport and
traffic, health care services, safety and
security, etc. The programme will be a
model of convergence of stakeholders to
take specific actions towards mitigating
the issues faced and problem areas of
Gurgaon district.
By and large, the action plan revolves
around: Identifying gaps in infrastructure
and governance, environment and
social development of the city; creating
awareness amongst the residents on
the role and responsibilities of various
stakeholders in developing the city; and
focusing and aligning all stakeholders
towards a common vision for the city.
An innovative way to address the
problem is to initiate a dialogue with the
entire public and all key stakeholders
on the lines of developed nations
such as Singapore. One needs to take
lessons from nations like Denmark,
Dongtan (China), Rio de Janeiro where
development has entailed a harmonious
balance between local population and
environment needs. The city of Dongtan
which seeks to become world’s purposebuilt eco-city, for example, has developed
sustainable transportation, efficient
water systems, green spaces and carbon
neutrality. Once developed, the city is
expected to consume 64 per cent less
energy as compared to a traditional city
of the same size.
DLF Foundation intends to develop
a similar partnership with various
stakeholders for mitigating the problems
being faced by the residents of Gurgaon.
One best example is “Green Horizon”,
IBM’s partnership with Beijing Municipal
Corporation. IBM announced a 10-year
initiative to support China in transforming
its national energy systems and protecting
the health of its citizens. Dubbed Green
Horizon, the project sets out to leap beyond
current global practices in three areas
critical to China’s sustainable growth: air
quality management, renewable energy
forecasting and energy optimization for
industry.
One of the first partners to sign on
was the Beijing Municipal Government,
which has agreed to work with IBM to
leverage some of the computer giant’s
most advanced technologies such as
cognitive computing, optical sensors and
the Internet of things, all based on a big
data and analytics platform and drawing
on IBM’s experience in weather prediction
and climate modelling – to develop
solutions to help tackle Beijing’s intense
air-pollution challenges.
If the real estate sector can do this, then it
will become a neighbour of choice and the
value of its estate will also increase. It will
be able to create smart, green and compact
cities with adequate interventions for
restoration, conservation, protection of
natural resources and the ecosystems.
The moral purpose of any business is
to contribute to economic prosperity
and social integration of the nation
and resonate with the needs of local
populations and other key stakeholders. It
is time to act now before it is too late! v
