Social capital valuation framework for Tata sustainability group

Abstract

In order to measure the impact of corporate social responsibility on corporate financial performance (CSF), various researchers arrived at divergent results (Michael, 2007). After 30 years of extensive research utilizing path independent frameworks, the results both support and negate the impact of CSR on financial performance. It has been thereby recognized that estimating the impact of CSR on CFP involves assessing the stakeholder relationship improvement/ degradation resulting from CSR. CSR initiatives are a big part of what the Tata Group stands for. Due to their long and glorious history of ‘giving back to the community’, almost all the group initiatives fall under public scrutiny. And rightly so, the Tata Group is committed to integrating environmental, social and ethical principles into their core business. WBCSD defines social capital impacts as ‘Positive and negative effects that businesses have on people and society through their operations and supply chains, and through the products and services they provide’ (The Social Capital Protocol, 2017). It is this impact which the Tata Group has always sought to create, positively, through most of their CSR initiatives. The Tata Group, accordingly, have their own set credo called ‘The 10 Core Principles of CSR at Tata’ which acts as both, the basis as well as the benchmark for their social initiatives (Tata Sustainability Group, 2017). However, in light of the recent evolutions around the definitions of the term ‘Social Capital’, the relevance of Tata’s credo has been put to question. The Group realized this as well and sought to refine the way they measure the impacts these initiatives create. This project study is an attempt to define Social Capital in terms of its nonfinancial impact. We also intend to provide the Tata Sustainability Group, a subsidiary of the Tata Group, a framework to evaluate their social capital.