Sunday, February 7, 2016

HUL Project Shakti - Is it CSR?

During the year 2014-15, HUL spent Rs 4651 lakhs (56.48 per cent of total CSR spending of Rs 8235 lakhs) on project Shakti.

HUL describes the project Shakti in its website  as follows:

“HUL provides training on basic accounting, selling skills, health & hygiene and relevant IT skills to Shakti entrepreneurs and equips them with smart phones which have been enabled with a mini Enterprise Resource Package (ERP) which helps them to run their business efficiently and further augment their income. HUL has trained thousands of Shakti Ammas across the villages in a bid to develop an entrepreneurial mindset and make them financially independent and more empowered.
In 2010, the Shakti programme was extended to include ‘Shaktimaans’ who are typically the husbands or brothers of the Shakti Ammas. Shaktimaans complement our Shakti Ammas. They sell products on bicycles in surrounding villages, covering a larger area than Shakti Ammas can cover on foot.
Today, Project Shakti provides livelihood-enhancing opportunities to over 70,000 Shakti Entrepreneurs who distribute our productions in more than 165,000 villages and reach over four million rural households. There are 48,000 Shaktimaans across India.
HUL’s Project Shakti has become the model to reach out to rural consumers in developing and emerging markets and enabled Unilever to tap opportunity at the bottom of the pyramid.”

Shakti Ammas and Shaktimaans constitute direct rural distribution channel of HUL. Is it appropriate to classify spending on project Shakti as CSR spending?  

The empowerment of rural women and men is positive externality created from the HUL's activity of distributing its products at the bottom of the pyramid. Whether the spending should be classified as CSR spending is a contentious issue.

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