CSR: A Pathway Towards Business Sustainability

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Employees-Community Engagement creates a win-win situation for Companies and Communities

By Nasiruddin, Nasir*

This article draws the deep insight of the author how does Corporate Social Responsibility initiatives of companies drive social dynamics (both internal & external of the organization) and impact social change processes. The focus is to encourage employees’ engagement through CSR initiatives that may not only result in retention and winning stable organization but also help in building strong stakeholders relations and driver for social change. Consequently, this approach of CSR drives business to become more sustainable.

The Corporate Social Responsibility (CSR) initiatives of a company not only maximizes the positive impact on the lives of communities in -and -around the areas of business operation and beyond, it also reflects “the way of doing a business”. “the way of doing a business” attracts attention not only towards the attitude of a company towards society going beyond business, but also reflects the responsible social outlook of its employees, which helps maximize the social impact of the business. Therefore, it becomes important for a company to introspect about the social, cultural and professional ethos of the firm, thus boosting the morale and self-esteem of its employees and enhancing their social outlook, which further helps the company to achieve organizational sustainability.india-csr-awards-ad-300x400

One the one side, the business environment is becoming more and more competitive and complex, businesses have started facing the huge challenge of retaining the right pool of talent for a longer tenure. In this context, companies are trying every strategy beyond offering the right salary and caring for them, to attract and retain talent for a longer tenure in the organization. On the other-side, the competitive business environment has increased employment options and prospects of receiving higher salaries for talented people, it has also made employees think of the impact of the actions of a business on the society and they have begun to realize what contribution they can make towards their society, going beyond regular business. In this context, CSR becomes a vehicle to provide competitive edge to companies while being social.

Therefore, offering a high salary and prestigious positions may not be enough, as the current generation seeks to work in companies with a responsible social outlook, and where the initiatives are aligned with issues that may impact the society at large. This is where the Corporate Social Responsibility policy of an organization makes a big difference, as it reflects its ethos- not just “What” the company intends to achieve but also “How”. Therefore, Employee Engagement has become an important component of designing a CSR strategy and executing the initiatives of a company. Because, CSR has become compulsory by Law in India since 2013 and for companies falling under threshold of the CSR Act are necessary to spend 2% of its average net profit of three subsequent years. Beyond compliance, companies should consider it an opportunity to take privilege in serving the best interest of communities while aligning its CSR strategies with its business goal and business sustainability in long-run.

Since, CSR is meant to contribute and support communities and gives employees scope to engage with other societies and make their own contribution, thus positively impacting the lives of communities around them. Therefore, the CSR policy of an organization plays a major role in attracting and retaining talent, helping employees gain social satisfaction, boosting their self -esteem and making them feel that they are playing a socially responsible role, going beyond the business world. Employees’ engagement and volunteerism is a key motivator especially when CSR initiatives are well-defined and adequately aligned with the business goal and strategy of the firm. Companies which have a clearly defined CSR strategy, effectively aligned with its business strategy, have greater potential to attract and retain top talent and excel in maintaining efficiency and sustainability of their organizations in the long run.

The connection between CSR policy and employee engagement has been established through various researches conducted worldwide. Evidence from surveys, management consulting, journalistic and corporate sources; show that CSR is an emerging and increasingly important driver of employee engagement. CSR enables employees to showcase their potential and mettle by becoming holistic individuals. Companies recognize that a highly engaged workforce leads to increase in innovation, productivity, and bottom-line performance; while reducing, costs related to hiring and retention in highly competitive talent markets.

However, CSR makes volunteerism the key motivation for employees, thus impacting the employees’ behavior towards social good. Eventually the magnitude of impact lies in the positive attitude and genuine commitment of the corporation towards CSR. For instance, if a company does live up to its commitment towards reducing waste and reducing carbon footprints, in practice it only organizes some annual events without concrete planning and without bringing about a real change, such practices do not motivate employees. Therefore, it is necessary, that CSR should lie at the heart of a corporation and it should demonstrate actual change.

CSR serves as a pathway for building strong stakeholder relationships, encouraging innovation and promoting social change. The CSR initiative must be considerate enough to design activities that may promote employees’ and stakeholders’ collective engagement. As employees constitute an important stakeholder group (internally) like other stakeholders (consumers, suppliers, communities etc.), they influence CSR policy and strategy and the practices of a company. Therefore, employees’ engagement is necessary throughout the various phases of CSR implementation, be it policy, planning, execution or evaluation. The better the engagement of employees, the better is the result and impact on the company and surrounding communities.

Apart from impacting internal stakeholders, CSR impacts external stakeholders as well and can be used as a tool, to understand the interests of different stakeholders and communities. The employees’ engagement with communities helps them to identify different stakeholder groups and understand pressing social issues that are highly relevant for the company.  Employees’ engagement with communities also helps to identify risks, mitigate them and implement these two tasks together to achieve a sustainable outcome. Additionally, this effort also facilitates the integration of a company into its nearby community in the long -run. When a company aligns employee -community integration with its own value system, the chances are high that socially inclined employees would prefer to stay for long tenures and communities may feel that they are important for the company and are being heard as well.

CSR may serve as a tool to promote a shared value system and create sustainable resources and infrastructure in communities. For example, a company that carries out agri-business, can promote sustainable agriculture by demonstrating effective agricultural practices and linking farmers directly to the market. ITC’s MSK presents an outstanding example wherein, farmers are brought together at village level, equipped with on-field training for implementing sustainable agricultural practices and offered market-linkage support, that enhances income and integrates the farmers with the sustainable supply chain.

Since, employees of a company bring excellency and draw knowledge from their vast experience in the business world, they see a social problem or issue with a different perspective, so they seek innovative and environment-friendly solutions, that may resolve social issues differently. This is the sphere, where employees may contribute towards understanding and resolving social issues by working together with different stakeholders and communities.

In conclusion, employees’ engagement with communities, helps to boost their self-esteem and they feel proud to work for a company that shows genuine commitment to CSR. It also enhances the tendency of employees to stay for a longer tenure in the company. On the flip side, employees bring different perspectives and divergent ideas to seek solutions for pressing social, economic and environmental issues. Communities also have respect for such a company and value its contribution to the society. Companies that are operating in best integration and deep engagement of its employee with stakeholders and communities, have greater chance to build its positive, visibility, respect and reputation among its customers, clients, supply chain and stakeholders at all levels which helps establishing company as a responsible corporate citizen. Consequently, the CSR intervention may create a win-win situation for communities to resolve issues and for the company to achieve sustainability in its business.

About the Author:

nasiruddin-nasir*Nasiruddin Nasir is a social sector professional, Strategic Advisor and CSR-Sustainability professional with hands-on experience in strategic CSR & Sustainability consulting to corporations, partnership building, Stakeholders and Employees engagement. He is graduated in Development Studies from International Institute of Social Studies of Erasmus University (Netherlands) and Development Management from Asian Institute of Management (Philippines). He has been Ford Foundation Fellow and AIM-CDM fellow.

Disclaimer: The views and opinions expressed in the article are solely of the authors in their personal capacity and do not in any way represent views of any institution, entity or organization that the authors may have been associated with.

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