Corporate Social Responsibility (CSR) in India

By Rusen Kumar

Now Corporate Social Responsibility (CSR) is well accepted among shareholders as well as with various other stakeholders of society in India. The term CSR is new normal for Indian organisations. CSR tends to focus on what is done with profits after they are made. Larger corporations understand that CSR is an integral part of business framework for sustainable development. Companies also consider that CSR is an approach towards Social Profit sustainable development and focus on the triple bottom line of Economic, Environmental and Social performance.

In India, the term Corporate Social Responsibility (CSR) is widely being used even though related concepts and terms, such as business responsibility, sustainable development, philanthropy, sustainability, corporate citizenship, responsible business, triple bottom line, shared value, value creation, business ethics, socio-economic responsibility, bottom of pyramid, stakeholder management, corporate responsibility, and corporate social performance.

The CSR activities of Indian companies are in line with the provisions of Section 135 with Schedule VII to the Companies Act, 2013. The CSR initiatives of companies thrust on creating value in the lives of the communities around its areas of business and manufacturing operations.

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CSR has become an effective tool to work in the line of Sustainable Development Goals (SDGs) with a strong focus on social performance indicated in the CSR projects of the organizations. The SDGs, otherwise known as the Global Goals, are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity.

Most of the businesses consider community as one of its apex stakeholders and believes in inclusive growth. This year most of the organisations continued its CSR initiatives in the realm of Education, Health, Livelihood, Rural Development and Social Entrepreneurship.

Organisation’s diverse projects and operations touch lives of people in many ways and create value by helping in overall and holistic development of communities within multiple geographies. Through its various initiatives, Companies endeavour to play a relevant role by serving communities and projects that address gaps in basic societal requirements.

Conscious business decisions by the Companies have directly and indirectly created value for multiple stakeholders and helped in improving lives of the people and species. Businesses in India believed in creating societal value by providing affordable products and services which have assisted in the growth of relevant and allied industries. Across all its areas of operations of Business, there are inherent linkages and interconnections with the immediate and long term societal impact.

Most of the business have a practice of reporting the CSR performance not only in Annual Report but also in dedicated Annual CSR Report and Sustainable Development Report. These reports are externally verified and are in accordance with the Global Reporting Initiative (GRI) guidelines and Business Responsibility Report, mandated by the law and competent authorities.

CSR initiatives are conceptualized and implemented through Corporate Foundations, Non-Government Organisation (NGOs) and Agencies and not-for-profit organisations. Most of the organisations worked on 4P model (Public-Private-People-Partnership) for empowering communities and stakeholders. Businesses have positively impacted lives particularly of several hundreds of thousand underprivileged people through various CSR activities and approaches.

It has been observed that for Indian Companies, Corporate Social Responsibility (CSR) is the commitment of businesses to contribute to sustainable economic development by working with the employees, their families, the local community, experts and the society at large to improve lives in ways that are good for business and for its development.

In the broad manner, CSR segment of the organisation is guided by the Board of Governance, Business DNA, CSR and Sustainability Mission of the Companies. In compliance with the provisions of Section 135 of the Companies Act, 2013 with the Companies (Corporate Social Responsibility Policy) Rules, 2014, Companies have taken measures and steps to ensure improvement and betterment.

Most of the businesses seek to continue its contribution to the society through its distinct value proposition that meets the needs of millions of people, enhancing their lives through education, healthcare, improving quality of living by providing attitude, means and enabling livelihoods by creating employment opportunities through and for the Business, By the Business and Beyond the Business.

For the Business, value is being created for the society through business including employment generation, market growth and opportunity creation. By the Business- value is also being created through Corporate Social Responsibility (CSR) interventions across different operating facilities with appropriate linkages to local communities in which businesses operate and Beyond Business- value is being created through interventions for the societies in diverse geographies across India through creation of demand and services.

At public sector business organisations in India, CSR has been also looked upon as closely linked with the principle of sustainable economic development, which demand that organisations should make decisions and act based not only on financial factors but also on immediate and long term social and environmental consequences of their operations and activities.

Businesses in India have been sensitive towards the concerns of society and is committed to operating its core business in a socially responsible way by taking into consideration the wider interests of the community and the environment.

Seven pillars of CSR strategy

1. Need of partnership in CSR

2. Cross learning

3. Supplementing and nurturing CSR

4. Per beneficiary cost reduction and maximizing the impact while reaching more people

5. Knowledge management and documentation

6. Use and reuse of resources for better CSR

7. Capacity building of the CSR workforce and re-skilling

Need of partnership in CSR

Business organisations now recognise Corporate Social Responsibility (CSR) as a great opportunity to significantly strengthen their businesses – while building, strengthening and renewing human, social and natural resources and wealth. Finding the right kind of partners is absolutely important to the success of a CSR strategy. We are in connected world.

All issues are connected to the other issues, perspective and environment. Working alone is good but working together is great. Working alone yields lesser benefits as compared to the working together always. CSR world should explore togetherness by partnering with other entities. Togetherness in addressing the social and environmental issues is good for all. CSR world should encourage partnership to execute the mega social projects.

To fulfil the corporate social responsibility (CSR) goals businesses have to realise and act in partnership. Formation of partnerships has played a very significant role in progress and prosperity across the world. Partnership brings companies, businesses, people and society together and then pool their resources together in order to achieve the set goals. Partnerships is CSR is need of hour. Partnership opens doors for cross learning of knowledge and experiences.

Cross learning in CSR

Cross learning is key to CSR strategies. Learning improves performance and minimise risks. Effective partnership among likeminded organisations for CSR execution ensures cross learning in Corporate Social Responsibility. CSR leaders from different organisations must visit specific CSR locations of other organisation where CSR projects are being implemented and meanwhile they should meet the beneficiaries to gain new insights. CSR leaders must build a deep understanding of the socio-economic issues and they must be open enough to understand issues both from a business and a societal perspective. Learning from others in CSR can save time and resources. Concentrate on your CSR efforts but same time CSR leaders must learn from variety of successful CSR programmes. The greatest opportunities will come from areas where the business significantly interacts with society. Cross learning in CSR is immensely helpful in supplementing and nurturing CSR programme and projects.

Supplementing and nurturing CSR

Good CSR strategy and projects must be encouraged and supplemented. Opportunities for complementing and supplementing ongoing social projects and initiatives, programmes must be explored. Supplementing CSR emphasises on the sustainability of projects and programmes to ensure they remain relevant and viable even upon disengagement at the end of the project period. Every organisation explore possibilities for collaborating and co-operating with other corporations in order to synergise its efforts and increase both financial and social resources as well as outcomes and impact. Businesses may consider in supplementing even in smaller well defined CSR projects. Supplementing the CSR projects by the smaller or larger organisations matter in order to ensure optimal utilisation of the CSR budget and resources.

Per beneficiary cost reduction in CSR

Per beneficiary cost reduction and maximizing the impact while reaching more beneficiaries in CSR is key to success. Business organisations have a variety of motives for being attentive to CSR and run a CSR projects. Leaders can increase impact and reduce costs when they understand the role of Corporate Social Performance (CSP) in driving CSR Performance (CP). Business should think of reaching more people by using less money and resources. Reduction in per beneficiary cost can be achieved by the partnership, collaboration, cross learning and reuse of resources. 

Knowledge management and documentation

CSR reporting practices strengthen organizations. The process of documenting and communicating CSR practices provides benefits to corporations, including the ability to formalize their position on CSR, identify organisational strengths and weaknesses, and manage stakeholder relationships and expectations. In India, any shortfall in spending in CSR shall be explained in the financial statements and the Board of Directors shall state the amount unspent and reasons for not spending that amount. As per the CSR Law, the CSR Committee of organisation shall institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the company.

Documentation, reporting and communication of the CSR performance in crucial to the CSR strategy.  Documentation of the CSR must be organised and structured and should be accessible. Companies can explore the new way of documentation, reporting and communications.

Use and reuse of resources for better CSR

Effective use and reuse of resources can improve the CSR performance. Awareness on use and reuse of resources among across the stakeholders can help in achieving the desired goals of CSR sustainability. Sustainable CSR can be achieved through community and beneficiaries engagement. CSR is a process oriented task.

Recycling and reuse often are the easiest places to start. CSR leaders should take the essential steps to recycle the commonly recyclable materials, and look for easy opportunities to replace disposable or recyclable items with reusable ones. CSR leaders also should look for partners to help with more challenging to recycle or exotic materials, as well as for opportunities to introduce reusable packaging. And of course, look upstream to design new idea, services and programmes.

Capacity building of the CSR workforce and re-skilling

In the fast changing world, capacity building of CSR workforce and re-skilling them are always relevant and are key to CSR performance. Human resource are fundamental requirement. CSR leaders must empower their subordinates by providing them right attitude, knowledge, information and trainings. Same time, CSR managers also be open to learn new things. Developing soft skill, professional skill, project management skill and leadership skill among CSR workforce is continuous process. Rigorous training, development and re-skilling of the CSR manners can save time, efforts and resources.

(Article is authored by Rusen Kumar)

About the Author

Rusen Kumar is the founder and managing editor of India CSR – The CSR Informer of India. He writes on CSR, Sustainability and Environmental affairs. He brings an understanding of governance, leadership development, social development, human development, and strategic focus by serving for-profit and not-for-profit boards and as an advisor to chief executive officers and executive management members. His leadership accomplishments in social enterprise, planning, and governance range from viable achievements in knowledge forum initiatives to advancement of corporate social responsibility issues in India. 

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