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CSR needs greater sensitisation – going beyond the 2 pc

Sunday, March 25, 2018, 08:21

Ravi Sreedharan, Founder & Director of Indian School of Development Management

Corporate Social Responsibility is a concept that integrates a company’s social concerns with their business operations. All the business houses and corporate entities across the world are undertaking social welfare, and while CSR is pertinent in business for all societies, it is particularly significant for developing countries like India, where limited resources for meeting the ever-growing aspirations and diversity of a pluralistic society make the process of sustainable development more challenging. Not so long ago, on April 1, 2014, the Corporate Social Responsibility (CSR) law came into effect.

What was earlier perceived in corporate companies as a cheque-book charity concept is now evolving, with a new breed of leaders who are going beyond this concept and contributing greatly to our society.

The landscape of CSR in India

Before the law came into existence, a few companies in India undertook CSR without the law, but they needed to be efficient with whatever income they spent on benefiting the society. Most companies took initiatives in areas they already had scaled up their operations and solutions for a wider audience, but some of them also started new initiatives to impact the lives of the underserved. This led to the rise of new corporate leaders who crossed boundaries to make a significant impact of their initiatives and efforts on society.

According to a recent report, 1,522 BSE-listed companies spent Rs 8,897 crore, or 92 percent of the budgeted Rs 9,680 crore, on corporate social responsibility activities in 2016-17, an increase of about 9 percent from the previous year. A total of 1,019 listed Indian companies have spent an amount to the tune of Rs 9,034 crore in FY17 to fund their CSR projects and activities. Nearly 37 percent of these funds were used for education and vocational skill building activities. This development area also witnessed the largest absolute increase in allocation of resources and funds.

Corporate giants like WIPRO, Infosys, and Reliance are focusing on improving healthcare and education, but expenditure on eradication of hunger, poverty, and sanitation has decreased by 18.6 percent from Rs 2,944 crore to 2,394 crores. The India CSR Reporting Survey showed that while education and healthcare have been in focus for the past three years, organizations have slowly begun diversifying their area and geography of development.

Challenges and opportunities

But the question that arises is – will what these companies are doing suffice the needs of society and help the underserved sections of society leapfrog towards sustainable, safe, healthy, and dignified lives with ample opportunities for economic and social progress?

While India became the first country to have a legislated CSR law back in 2014, its implementation has still left much to be desired. There is an urgent need to go beyond the 2 percent in order to ensure that organizations genuinely work towards giving back and building a more equitable society. Any well-intentioned policy needs the backing of motivation, implementation, and a sustained effort.

One would urge Boards of companies evaluating CSR efforts to think beyond the 2 percent which is required to be mandatorily spent and be far more sensitive to the ways and methods in which the entire 100 percent of the costs are being spent and 100 percent of the revenues are being earned in fair, humane, and sustainable ways.

Corporate world also needs to understand that it is not just the increase in spending which is going to assure their commitment to support initiatives aimed at impacting lives. Implementing CSR with consistency and determination is the key to success and requires an impactful CSR strategy along with capable teams who understand the verve and challenges of working in social change. For example, one of the corporate company’s solution to open defecation was to build functional toilets, especially for women. However, the company noticed that despite the construction and availability of toilets, women continued to defecate outside.

The CSR team was frustrated and the management team moved on to the next project, stating that if the women didn’t want to help themselves, there was nothing they could do about it. What they didn’t realise was that these women were living in a society which was a very male-dominated, patriarchal society. The time they went to defecate outside was the only time they had freedom and could meet their friends, talk to them, and even lend/borrow money. Unless you realise these underlying forces in a society like gender, caste, inequality, discrimination, and poverty, the traditional business mind will draw very linear solutions.

Corporate sector must encourage the hiring of professional leaders and managers for their work in the development sector and help them create an impactful CSR team which can help them in achieving the objectives of their CSR programme in the most effective and sustainable manner.

The changing scenario of CSR in India

The landscape of CSR as aforementioned is transforming as a new breed of leaders is bringing new ideas to the table to help bring a difference to society. What was earlier viewed as just an NGO or a volunteering job sector is now becoming a proper service sector, and companies are also realising the value in engaging their employees in the conception and implementation of CSR programmes.

Despite the current challenges, the drive of Indian organizations willing to increase their CSR spending is a welcome one. Now that the basic framework and guidelines are in place, the government and corporate leaders must focus on improving the same. India Inc. has a truly unique and real opportunity to chart a story of inclusive growth in the economy and dictate the global narrative on CSR by leading with example.