• Charudutta Panigrahi

The companies need to internalise CSR

The urgency of strategic, systematic and thoughtful implementation of CSR in Nation-Building

source: Biswajit Sahani

The practice of CSR is not new to the companies but there is an upsurge in the number of companies getting into the fold of CSR and the total CSR spend. If this increased spending under CSR is to achieve results on the ground, per its objectives, then it needs to be done strategically, systematically, and thoughtfully. Many companies till view CSR as charity or philanthropy. There are now professional managers handling CSR and their professionalism gets applauded if they can increase pressure to give CSR the character of business discipline and demand that every initiative deliver business results. This is not CSR but business. The young CSR managers, who are actually managing on-the-ground CSR do not comprehend its main goal: to align a company’s social and environmental activities with its business purpose and values. The companies must refocus their CSR activities on this fundamental goal of human development and provide a systematic process for bringing serious coherence and discipline to CSR strategies.

The belief of “shared value”—creating economic value and value for society concomitantly, is absent. There is no ingrained value system in the practising managers of the companies on CSR. Mostly CSR is a ‘placating tool’ for IR issues for greenfield industries and for others, good to be featured with. Most of the companies should be interested in totally integrating CSR with their business strategies and goals than in devising a cogent CSR program aligned with the company’s purpose and values. And this has to be stitched together with the company’s credo and motto.

Although many companies embrace some vision of CSR, they are hampered by poor coordination and a lack of logic connecting their various programs. The CSR programs buckle under the pressure of the district authorities who often act under various pressures. So the CSR is seldom need based. It is pressure based. Although numerous surveys have touted the increased involvement of CEOs in CSR, we have found that CSR programs are often initiated and run in an uncoordinated way by a variety of internal managers, frequently without the active engagement of the CEO. We can count the numbers of CEOs who are actually involved in CSR. Hardly a few.

CSR in India offers tremendous scope to create ‘Development Lab’ in the district and sub-district levels to help work systematically towards meeting the targets as laid out in the SDGs. The labs in turn can be replicated and can be truly supplementing the state efforts in development. Though a substantial amount of CSR funds is invested, programmes are implemented without conducting need assessment in terms of a geographic area as well as the thematic sector. It would be worthwhile to put on the ground, a CSR Watch with the active participation of the industry, civil society, government, community, and academia. CSR Watch could mainstream CSR further, at the grassroots and assist the districts with better planning for need based, targeted interventions yielding measurable results.

Even today, as I write, many corporate managements take CSR work as any other contract work and hence bracketing their NGO partners as “Vendors”. There should be an initiative to clarify that NGOs are non-profit making social organisations and work at the community levels. There is no ‘commercial business involved in their work and hence should be accorded ‘equal’ partnership rather than being relegated to being vendors supplying goods and services. NGOs often felt that this lack of understanding interferes with the social license to operate for the businesses, specifically in the extraction industry. Furthermore, there needs to be virulent advocacy for the lifting of GST on NGO work. Non-profits or NGOs are not working for furtherance of business and hence ideally non-profits should not be covered under GST.

The early years of corporate philanthropy included contributions mostly in setting up schools, hospitals, community development, women empowerment, planting trees, nurturing art and culture. We were used to such noble gestures and ‘feel good’ initiatives, but these ‘give-aways’ were remotely connected with their core business. So, these initiatives get unsustainable, and can happen only till the point the company is profitable; more importantly, these ‘largesse’ by themselves will not drive the company to remain profitable or community centric. What is required is seamless integration of business strategy and sustainability initiatives. As an example, Hindustan Unilever (HUL) invests in research working with nutrition and health specialists in its ‘ready to eat’ food business trying to reduce salt to the recommended dietary levels, reduce trans-fat from vegetable oil, sugar from ready to drink teas, and drastically cut calories in children’s ice creams.

Integrating business strategies with sustainability initiatives, successful companies allocate resources to ensure the wellbeing of stakeholders which also enables the company to acquire a key differentiator vis-à-vis its competition, thereby making the business sustainable. GE’s medical equipment division commits huge resources in African countries donating equipment to enhance healthcare to low income groups.

source: Biswajit Sahani

It is fine to comply with the mandatory provisions of the Companies Act. Nevertheless, CSR initiative driven by a voluntary spirit is more intense and sustainable than that driven by the regulatory measures. For creating long-term impact and contributing to the developmental endeavour in the states, companies must integrate their CSR programmes with the schemes of the government. Partnership with civil society organizations and NGOs for planning and execution purposes is desirable. Every state must establish a CSR platform by the CSOs (Civil Society Organisations) to guide and institutionalize CSR programmes in the states. This may ensure the more optimised management of CSR resources which will complement and supplement the state’s development efforts. Almost half of the districts in India are off the mark to reduce the mortality rates of newborns and work towards the target under Sustainable Development Goal 3 for 2030. The target is “ by 2030 “, end preventable deaths of newborns and children under 5 years of age, with all countries aiming to reduce neonatal mortality to at least as low as 12 per 1000 live births and under-5 mortality to at least as low as 25 per 1000 live births.” India still has the world's highest number of deaths, about 1.1 million per year every year, among children under five and newborns, worse than sub-saharan Africa.

How can we grow when you and I, a citizen & a corporate of this country, can’t take care of the newborn and protect a life? Corporate programs should look for integrations with government schemes.

COVID has devastated our rural economy and lives. It is imminent that corporates suggest ways and means of partnering with the district or state authorities and implement livelihoods and skills programs for the youth.

There is so much more to do, and the companies and their CSR managers need to realise the significance of CSR in nation building.

Article by

Charudutta Panigrahi

Author of India's first CSR white paper

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