CSR can be good for talent, business, and society. They are leading the way towards the maturation of CSR
By Anant Bhagwati and Karan Singh
What have we learned in the nine years since the law mandating corporate social responsibility (CSR) was passed? CSR clearly plays a large and growing role in India’s social sector. It now represents the second-largest source of social sector funding, with average annual growth of about 13 percent over the past five years, roughly double the country’s average GDP growth in the five years before the pandemic. Yet, while a lot of good work is taking place in CSR programmes, many are still focussed on compliance with the law.
There is a small and influential group of companies, however, that are thinking bigger. They are tacking against the compliance mindset – and shaping their CSR programmes around the belief that CSR can be good for talent, business, and society. They are leading the way towards the maturation of CSR.
These companies don’t settle for cheque-signing philanthropy. A good example is Hindustan Unilever (HUL), one of the nation’s top-25 corporate donors in FY20. To HUL, CSR is more than the money; it’s strategic to its markets. One of HUL’s social initiatives is Project Suvidha, a hygiene and sanitation initiative focused on residents of Mumbai’s Dharavi informal settlements. Because handwashing awareness is directly linked to HUL’s hygiene products business, HUL deploys top marketing talent from its hygiene and personal care brands to support behaviour change amongst Dharavi residents. In fact, some of the managers’ key performance indicators are partly based on achieving specific social outcomes within the CSR programme.
A growing portion of the workforce in India wants to make a difference in communities, according to recent research from Bain & Company, and corporates are applying that energy to CSR. The idea is not just to improve CSR outcomes, but also to develop and retain talent. Cisco, for example, helps Bengaluru-based N/Core with a programme for technology-based social start-ups. Cisco provided 500 hours of technology mentoring from senior leaders for start-ups using technology for social impact. Overall, Cisco engages 80 percent of its employees in some way through its CSR initiatives. Purpose-driven is smart business.
None of this could happen without CEO and board support. Engaging top leadership focuses CSR giving and injects a longer-term perspective. For example, HSBC India’s CSR Committee comprises the top leadership and is chaired by the India CEO. Some corporations take accountability further and publish CSR metrics as part of their companies’ environmental, social, and governance (ESG) reporting. Providing public visibility into the use of funds can help ensure CEO and board accountability, which can go a long way towards elevating CSR.
That high-level and external scrutiny has led some corporates to eschew “peanut butter CSR” of engaging in many different programmes at the same time to focus on just a few. Much the same way that smart managers allocate capital to the business lines with the best chances of success, CSR heads are channelling substantial commitments towards a smaller number of programmes to create meaningful and sustainable impact over time. One example is Axis Bank Foundation (ABF), the CSR arm of Axis Bank. In 2011 (before the CSR law was passed), it began pursuing one overarching goal: creating sustainable livelihoods in a way that would influence the lives of one million people in rural India by the end of 2017. It achieved that goal on schedule.
Others have responded by embracing collaboration. Indeed, working in concert with other funders, with NGOs, and potentially with government agencies may be the only way to achieve results at scale. By sharing common expenses and spreading risks, collaboration can lower the burden on any one programme and create new opportunities. For example, a key focus of SRF Limited’s CSR program is rural education. Having demonstrated its approach, it is now partnering with other funders to grow the programme, which is now in more than 250 schools.
CSR has been a nationwide learning process, still in its first decade for many corporate leaders. The stakes are enormous, with US$ 3.2 billion invested in CSR in FY2021. So it shouldn’t surprise that practices have been maturing before our eyes. As we enter the second decade of CSR, however, leaders should embrace what they’ve learned to leverage that sizeable commitment into making a bigger impact on the nation’s development.
About the Authors
Anant Bhagwati is a partner in The Bridgespan Group’s Mumbai office. Karan Singh is managing partner of Bain & Company’s India offices, based in New Delhi. They are co-authors of The Future of Domestic Philanthropy in India, a report published by The Bridgespan Group and Bain & Company.
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