CSR White paper & CSR 3.0 launched at a forum in Odisha

BHUBANESWAR: Today was a landmark day for CSR (Corporate Social Responsibility) work in Odisha. The ongoing Odisha Vikash Conclave witnessed the release of the White Paper- 2018, on Corporate Social Responsibility (CSR) in Odisha, the first of its kind by a state in India.

Maintaining the consistency of an annual calendar since 17th May 2016, the white paper is authored by FIDR, a think tank founded by Charudutta Panigrahi, which is an in-depth analysis of the CSR performance in the state in the financial year 2017-18 after the enactment of the Companies Act 2013 that, under its Section 135, has made India the first country to make mandatory provisions for companies falling under the ambit to spend 2% of the average net profits of three preceding years.

Charudutta had authored India’s first CSR White Paper in 2016. A significant endeavor as it is, the document succinctly recounts the trend, spread, extent and scope of CSR in Odisha. The compendium encapsulates the findings of the study on social performance by companies operating in Odisha. It has delved into their performance in different thematic sectors and geographic areas, and their mode of implementation.

This year at the Odisha Vikash Conclave, a new strategic paradigm, coined as CSR 3.0 by Charudutta of FIDR, has been unveiled. It has meant to provide a set of recommendations for building a better framework of CSR in the state.

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Helping to localise the SDGs (Sustainable Development Goals as set universally by the UN), CSR 3.0 puts emphasis on social impact. The new wave of CSR is from CSR to Social impact. There is a big branding shift that is happening for the companies and the developmental practitioners. A company’s pro-social program should be not some generic standard of responsibility or as penance for perceived negative effects.

The social license to operate is no more the sole driver. It’s the human, environmental, societal and financial impact. CSR 3.0 for Odisha is a distinct shift from nice-to-have silo to a fundamental strategic priority.

Odisha hopes to see a surge in the coming years as it welcomes big business houses through its investment-friendly approach. And, at the same time, CSR 3.0 calls for a strategic and integrated approach by the companies and the civil society organisations in in executing their social agenda so that the government’s efforts to achieve SDGs and alleviate its social and environmental problems can be supported.

In this context, the release of the White Paper and the Policy strategy CSR 3.0 that contains adequate stuff to visualize the state’s CSR scenario is a praiseworthy step. The discussions at the OVC consisting of grassroots organisations, development practitioners, government and the industries have dwelt upon sectoral thrusts like the prime sector agriculture. Considering its importance concerning the livelihood situation of the state, it was commonly felt that agriculture has not been accorded the priority it deserves. Further, in the coming days, environment and climate change needs to be given more focus.

Encouraging innovation to deal with the problems of climate change and frequent occurring of disasters in Odisha should be treated as a critical area by the corporate houses. And, the companies may keep aside some funds for promoting business start-ups.

If industry-wise contribution is considered, top three areas have provided more than 80% to CSR spending. Steel, Iron & Ferro alloys sector tops the list with over 40% spending, followed by Mining (20%) and Aluminium (20%) sectors. This may be ascribed to the fact that maximum numbers of industries are in these sectors in the state.

This compendium denotes that both the public (central and state PSUs) and private sectors are almost equally enthusiastic in implementing their CSR agenda in the state. Also, Odisha seems to be a favoured destination for the companies to execute their CSR programmes as the top ten companies having national presence have allocated their funding in the state.

Nevertheless, players from other growing sectors in the state like IT and ITeS have joined the CSR bandwagon. It was expressed by the participants that, small companies, even though they do not come under the ambit for mandatory CSR spending as per the Companies Act 2013, should be involved in their little way in the movement. Participation of more State PSUs is welcome.

In terms of geographical coverage, though 24 districts have been taken up, 6 districts (Malkangiri, Kandhamal, Nuapada, Boudh, Gajapati and Deogarh) with apparently lower human development index have been left out only because these companies do not operate in these six. Further, so many other districts have received only paltry funds.

Whereas, Angul, a relatively developed district in the state, has alone received over 30% of the entire spending as it houses a good number of well-performing companies. This regional disparity is because of the ‘project area mindset’ of the companies, and it may not serve the interest of Odisha. Rather, they should see the state as a whole and make their efforts more inclusive.

It has been fairly understood from the white paper that though substantial amount of CSR funds are invested, programmes are implemented without conducting need assessment in terms of geographic area as well as thematic sector. Stakeholder engagement, specifically, community involvement, a crucial aspect for need identification and planning of CSR projects, is not followed in real sense. Owing to these, duplication of spending by companies, among themselves and with government schemes, is found to have occurred in some areas. Further, companies do not display seriousness in monitoring and evaluation (M&E) of programmes executed.

It is fine to comply with the mandatory provisions of the Companies Act. Nevertheless, CSR initiative driven by 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 Odisha, 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. The suggestion of the white paper for establishing a CSR platform by the CSOs (Civil Society Organisations) to guide and institutionalize CSR programmes in the state needs to be considered. This may ensure more optimised management of CSR resources which will complement and supplement the state’s development efforts.