By Harsha Mukherjee
In todays date, CSR or Responsible business is a widely accepted concept & is rigorously practiced by MNCs, TNCs & PSUs present across the globe. Have you ever wondered how active are the MSMEs in the field of CSR & why do they lag far behind the big giants or moreso even in large scale companies have we been successful in whole hearted implementation of CSR?
The Growth of MSMEs in India
Let us take the case of India, one of the fastest growing emerging countries. There are about 30 million MSMEs in India, and 12 million people are expected to join the bandwagon. According to the SME Development Chamber of India, the contribution of MSMEs towards the GDP of India was 17% in 2011 and is expected to increase up to 22% in 2012. With such a huge burgeoning market, the CSR quotient is still close to nadir. Let’s jot down a few reasons:
CSR as Chequebook Philanthropy in India
In India, we still pursue CSR as a chequebook philanthropy on a large scale rather than responsible business. Note the point that even the Government of India has released Reporting Guidelines not as Social Responsibility but as “Responsible Business.”
Standardizing CSR for Industrial Sectors
The other reason is the diversity of the subject which we need to condense. Pondering over the thought, I realize that CSR should be standardized for every industrial sector with a variable quotient of culture, society & other constraints. This would give a set basis for each industry to follow & thereby ease the formation of metrics to compare CSR initiatives. Thus, we can keep a fixed consonant “R” & variable “S” & the metrics formulation of CSR for every country we can measure as follows:
Formulating CSR Metrics for Different Countries
CSR = R(Industry) + micro(Scommon social factors)
R – Industry Specific & S – Social factors of the country to be addressed
For example, in Russia:
CSR = R(extractive industry) + micro(Scommon social factors)
Rextractive industry – Fixed metrics in the extractive industry to be followed across the globe such as; environment, labor laws, health benefits, etc. They are the primary metrics to be addressed by the entire industry. They are the factors within the confinement of the industry and in this case extractive industry.
Scommon social factors – Variable metrics like socio-economic conditions, conflict issues, etc. These are the external factors beyond the reach of the industry.
Challenges in CSR Implementation
This can be applied to both leading factors of CSR, which is extensively researched by Bob Pojaski & lagging factors as we all know are reporting indicators like GRI, BSC AAA1000, ISO14000, etc.
Lack of Positive CSR Knowledge Spillover
The other reason I think of is the paucity of positive CSR knowledge spillover by large-scale companies. It is the onus of these companies to train & enlighten the domestic market about the subject.
Consumer Demand and Incentives
The exiguity of consumers demanding CSR from corporates further perturbs the companies to pursue CSR proactively. This is largely due to sheer ignorance of the stakeholders or the “convenient attitude” in which they would buy the service close to them or “discount attitude” where price is a factor of choice. Absence of incentives further weakens MSMEs to build strong CSR framework. Lack of CSR professionals accentuates the issue.
The Crucial Reason: Lack of Definition
Although all the above reasons play an active role for the aversion from the topic, the crucial reason is the lack of definition of the subject.
Moving Beyond Talk: Implying CSR Norms
Let us not only speak about following transparency & accountability by CSR in the corporate but also dissect & imply the same on CSR & form certain norms for the upcoming generations to follow.
