The COVID-19 pandemic has had a devastating impact on communities across India as it disrupted the socio-economic landscape of the country. It also wiped out several years of developmental gains made in the last decade with respect to the 2030 Sustainable Development Goals.
According to Edelman’s Annual Trust Barometer, 78% of Indians sampled (global average at 62%) believe that inequities have worsened and those with less education, money, and fewer resources have been disproportionately burdened as a consequence of the pandemic. The definition of corporate social responsibility (CSR) has to evolve and the role of corporate philanthropy must assume greater importance.
In India, the law mandates that businesses with a turnover of more than Rs 1,000 crore, net worth of Rs 500 crores, net profit of Rs 5 crore or more, must spend at least 2% of the average net profits earned during three preceding financial years to CSR activities. This calculation based on India’s pre-pandemic challenges might no longer be enough. When the Covid-19 crisis hit India, the government imposed a nationwide lockdown requiring all non-essential services, including businesses, to close their physical operations.
Almost 32 million people in India were driven into poverty by the pandemic last year, based on a study by the Pew Research Center, accounting for a majority of the 54 million who slipped out of the middle class worldwide. Covid-19 also undid 70 years of girls education and women’s development progress by widening the gender gap. With such social distresses, the increased urgency to solve “foundational” problems such as education, healthcare, climate change, and addressing poverty and inequality was felt harshly.
The pandemic also highlighted the importance of bringing together different stakeholders to work collaboratively with the government to support communities in need. The world is witnessing an increased expectation that businesses will step in with their expertise and resources to solve societal problems and not only “doing business as usual”. Corporates must support India and the communities in need with their core expertise and assets which go beyond just funding.
What companies did?
Since the pandemic, many companies have offered innovative social solutions in response to the crisis. For example, Reliance Industries tweaked their Jamnanagar oil refinery plant to become a supplier of medical oxygen which was supplied for free to badly hit states in India. Alcohol companies like Radio Khaitan that makes Magic Moments Vodka marshalled their factories to produce sanitizers. Amazon too leveraged its global and local logistics capabilities to not only donate critical medical equipment but also facilitated the airlift of thousands of oxygen equipment from across the globe and deliver them to the remotest corners of the country. Innovative corporate models of philanthropy truly aided India’s fight against the two waves of Covid-19. Even apart from emergency scenarios like Covid-19, companies have a lot to offer to underserved populations in India. For instance, technology companies such as CISCO and AWS have been supporting digital education and skilling in many corners of India.
India’s public policy stance has also witnessed a change, with the government now focused on reviving the livelihood economy, in contrast to the pre-pandemic strategy focused solely on growth. The government is embracing the Public-Private-Philanthropic partnership models to ensure efficient welfare delivery. The expertise and capital that corporates bring in while partnering with the government to solve social issues adjacent to their businesses create a perfect symbiosis. Be it in education and skilling (Microsoft, Google, IBM, CISCO), sustainability (HUL, P&G), poverty reduction, healthcare, or women empowerment amongst others; PPP models have proven to be more effective, especially with large businesses leveraging their scale and resources to support employees and communities in India amid the devastating impact of the COVID-19 pandemic.
A narrow legislative definition of CSR doesn’t hold water anymore, as newer and innovative measures might not always fit into the 2% slab. The time has come for us to formalise a critical element of CSR that involves service and in-kind delivery of social good and white spots in socio-economic research.
For instance, Maruti Suzuki India Ltd, as part of its CSR, has partnered with Industrial Training Institutes (ITIs) to train skilled workers, some of whom it even hires. Amazon, as well, has spent crores in carrying out global and local logistical tasks during Mission Vayu in 2021.
Similarly, there are many areas that remain hidden in plain sight. The informal sector and MSMEs are the case in point. The pandemic devastated the lives and livelihood of millions of self-employed people but there is no data and hardly any quantitative and qualitative analysis of the damage done. It is impossible to gauge the destruction, let alone organize support, in the absence of critical data sets. The Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs, therefore, targeted only formal enterprises which had running loans at a given date; all the informal enterprises- over 90% of the total sector, had to fend for themselves. Research activities covering the MSMEs and the informal sector ought to be covered under CSR.
We must be cognizant of the fact that company profits have also been hit as various industries tackled economic headwinds and in these times the CSR activities are needed the most.
The pandemic has ascertained the spontaneity of calamities, and how within a matter of days the world can drop to its knees. Socially beneficial corporate activities are investments in the progress of a society. Private philanthropic entities using the tools of collaboration, communication, and knowledge sharing can redefine the development map of India, and accelerate the pace of development like never before. (economic times)
(India CSR)
