Monday, December 3, 2012

Companies can create win-win situations for one and all

His mantra is that through strategic CSR, companies can create win-win situations for one and all. However, L.N.Mittal reiterates that the company’s main responsibility is towards its shareholders; as told to B&E’s Ruchika Chawla

B&E: Isn’t it the Government’s responsibility to provide “public goods” and words towards social welfare? Why should it be that big/rich companies are being “pressurised” to undertake CSR?
LNM: In today’s society, business has an influential role to play in the world. Of course our first responsibility is towards our shareholders and to create value. But we also have a responsibility to our stakeholders – whether employees, customers, governments or communities. And this is what good corporate responsibility is about. At ArcelorMittal, we don’t feel that this is something we are pressured into doing. Rather it is an integral part of our approach to doing business that we believe is an important component of enabling us to perform to the best of our abilities. The best example I can give of this is in Kazakhstan. We own and operate the steel plant, but we also renewed the tramways, the power plants, the hotels, the stadiums, and developed social activities such as children’s camps. If we had not done this when we acquired the plant, the town would not have the correct infrastructure to support the steel plant. It’s a win-win situation for everyone concerned. Today, the steel plant runs efficiently and we are able to positively impact the livelihood of the community more broadly while continuing to improve the plant’s efficiency. This is what good Corporate Responsibility is all about.

B&E: There is a theory that the only objective of companies is to generate profits and maximise shareholders’ wealth. Do you agree with this?
LNM: Fundamentally businesses exist to make profits. And rightly so, because without profits you have no business and no economic growth and development. If you are a public listed company, your shareholders expect you to deliver strong returns on their investment. But simultaneously we work to ensure that our approach never compromises long-term sustainability for short-term profitability. At ArcelorMittal we take the long view espouses in our brand promise of “Transforming Tomorrow” – of thinking not only of today but also the generations to come. This means taking into consideration areas such as corporate responsibility, health and safety, the environment, human resources and research and development. All of these areas are critical in ensuring not only a profitable company that benefits our shareholders but a sustainable company that also benefits our stakeholders.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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