CSR strategies should be goal driven, measurable and achievable.
By Neeti Sharma
For years, across the world, Corporate Social Responsibility (CSR) was more a public relations activity. One-off, short term efforts, based on a particular company CEO’s interests. Often companies took on social responsibilities only after a debacle – after an oil spill or being called out for polluting ground-water, etc. In 2013, India became the first country in the world to legislate CSR activities. The Companies Act 2013 mandated that firms with a turnover of Rs 1000 Crores or above; or a net worth of Rs 500 Crore and above; or an annual profit of 5% and above had to set aside 2% of their profits (calculated as the average of the preceding 3 year’s profits) for CSR initiatives. The Act lists out a number of options for companies to support the government in nation-building – addressing nutritional goals, education, gender disparity, rural development, environmental sustainability, etc.
In a report from the Boston-headquartered Reputation Institute, over 91% of those surveyed have an inclination towards a company with an excellent CSR track record. Along with that, about 84% of respondents said that companies with effective CSR strategies get the benefit of the doubt during a crisis.
So globally, at a time when a company’s reputation can be made or unmade within days on social media, organizations are now being asked by their clients and co-partners to initiate CSR activities that are both authentic and goal-driven. In short, customers and clients want to see companies pursue CSR initiatives that portray empathetic concern for the communities they operate in. And these efforts would benefit the company much more if they’re aligned with its core products and services. So companies need to develop CSR strategies rooted in the company’s brand, business strategy, and work culture. This will make the CSR activities more actionable, achievable, and result-driven. And most important, more credible.
So how can Indian firms ensure their CSR initiatives are measurable and sustainable in the long-term, and these initiatives benefit both the community and the company? According to the Companies Act 2013, firms can build CSR capacities of their own, or fund recognized implementing agencies with established track records. Here are some recommendations:
Getting everyone onto the same page
Just as companies invest heavily in training – ensuring best practices for marketing or sales are practiced across countries, it’s important that if the CSR Strategy has been formulated in the Board Room, its rationale and implementation plans are shared across the company. Conversely, if Indian firms assign CSR responsibilities to managers, it’s important that they get a buy-in for their ideas, from the top management. Getting their support will communicate the importance of the CSR initiative to the stakeholders and employees of the organization. They can share their experience and expertise with the implementation team for better results. Managers can make their pitches stronger with proof points from the business, like cost-savings, the rewards of investing in energy efficiency, or supporting sustainability. They can bolster their arguments by including insights from industry leaders and the outcomes from competitors’ corporate impact strategies.
Setting realistic goals for high impact
While setting lofty goals is tempting, it makes sense to take a number of factors into account. A company located close to Chennai would earn considerable goodwill from the local community if a) its CSR involved large-scale desalination of sea-water to address the region’s chronic water shortages in summer, OR b) it supported NGOs working to desilt old rainwater overflow channels to prevent flooding, in the Cyclone season. A company with such local support would win loyalty from its locally-recruited workforce, improving retention and automatically earning higher direct employee participation too, in its CSR efforts. In such cases, the positive impact is high within the firm, making employees feel proud of working for it. And within the community. Considering that the success of long term CSR initiatives depends heavily on employee buy-in, it also makes sense to get them onboard when selecting projects. Most corporate employees look for deeper meaning from their work. So enabling them to ‘make an impact’ through CSR efforts like helping girls get educated; or rebuilding a community post-disaster, helps them build a closer relationship with the company.
CSR projects that channel a company’s strengths and values, ensure authenticity
Now comes the most important aspect of any CSR strategy, i.e. being authentic. The best way to be authentic in CSR work is to ensure there’s a genuine connection between the company’s vision and type of work. So when companies sustain their CSR efforts over the long term, customers and stakeholders trust them. This authenticity is important in today’s world. Millennials and those from Gen Z, have strong opinions on gender, support for the environment, D&I, and a number of other issues. On social media, companies trying token, quick-fix, publicity-grabbing gimmicks to ‘appear socially responsible’ often get called out for their inauthenticity.
Tracking progress
Having planned and ensured that the CSR goals align with employee, customer, stakeholder and management priorities, the implementation needs to be tracked so a framework needs to be set up. This ensures the project doesn’t drift, but that CSR goals are achieved with the same professionalism as sales targets. A goals framework is important because having one ensures a higher likelihood of the CSR initiative succeeding. And a successful project builds enthusiasm within the firm to re-commit to the project, year after year. A successful project earns a company considerable goodwill in the public’s eye – from customers, government agencies and employees. When a school set up by the company and nurtured for years till its first batch passes out of Std 10, grabs the headlines, it will inspire all employees involved to aim to start a college, possibly – or another school! And since social/environmental impact projects are not what employees would have experience or training in, a goals framework helps analyse the reasons behind a successful CSR project or its failure. Thus building an important knowledge base within the firm.
And when the CSR initiative ties in tightly with the company’s core strength, it allows employees to directly work with communities to improve lives. Such experiences build better humans, great managers and stellar leaders. So it pays to think through a CSR strategy that aligns perfectly with corporate values – putting people and the planet first has now proven to be profitable!
About the Author
Neeti Sharma, Co-Founder & President TeamLease EdTech
Views are personal.
CopyRight@IndiaCSR
