Redefining Social Responsibility: Integrating CSR in the Ethos of the Organisation
Corporate Social Responsibility has many definitions and perceptions. We believe that corporate responsibility is both a value and a strategy towards ensuring the sustainability of business and of society at large. From an Indian perspective, CSR has to look at responsibility towards stakeholders (shareholders, employees, consumers, suppliers and community) with a stress on long-term business sustainability.
With the passing of the Companies Act which includes a mandatory CSR spend; the question for corporations and CSR practitioners is how to craft CSR strategies that reflect a company’s business values, while addressing social, humanitarian and environmental challenges. Most companies have disparate CSR programmes and initiatives and the challenge is to bring these together into a cohesive strategy.
While evolving CSR strategies, companies need to look beyond a traditional lens of philanthropy and develop CSR strategies with potential for large scale social and economic impact. While alignment with vision and mission of the organization is essential, it also is important to have a structure, defining roles within the company towards responsibility for crafting, driving CSR strategy and implementation of the same. The company should be clear about which different stakeholders the CSR strategy will involve, their influence and the impact. Setting clear objectives and programme design along with streamlined internal and external communication will give the CSR programme the impetus that it needs. Solid reviewing mechanism with means of measurement of impact and reporting needs to be developed.
While the clause in the Bill is a breakthrough in Indian CSR arena, it being the first of its kind legislation, its limitations also need to be debated and addressed. A mandatory CSR spend can result in an increase in the focus on quantifying CSR vs. a qualitative assessment of what makes strategic sense for the company. It also runs the risk of diluting the attention on how companies make their profit rather than focusing on how they spend their profit. CSR has to be strategic and linked to business. The Act recommends that the company shall give preference to the local areas around where it operates. This may result in a skewed resource allocation as most business houses and manufacturing facilities are located in developed states while the resource requirement is more in the under-developed states where industrial presence is limited. The Act also encourages companies to implement their CSR activities by establishing their own trusts/societies. However, social and development issues are often complex and local civil society organisations are likely to be better equipped to understand these unique issues and offer solutions for the same. In addition, many of these civil society organisations operate from the larger framework of social justice and not just on a project or activity bases. Therefore, partnering with such organisations will enable bringing in the aspect of social sustainability into the CSR strategy.
While these gaps need to be addressed the move has given the required push for corporations to integrate CSR into their DNA. This is laced with challenges and requires a complete change in the way a corporation perceives itself and its role in economy, markets and society. Implementing any CSR strategy requires specialized knowledge and therefore, companies have to invest in building teams and organization structures equipped to handle these challenges. The leadership of the company has to drive CSR strategy as a key element of the Business strategy. A constructive dialogue between diverse stakeholders is the key to working together to achieve individual and collective goals for social and business transformation.
Also, the key to a DNA of the organization are its employees and they form a formidable force to make CSR a way of life. They are concerned about responsibility role of a corporate; it is increasingly seen to be a consideration for attracting and retaining talent. As a key driver of value in any organization, employees need to be engaged in the task of integrating CSR throughout the firm, helping the firm achieve its CSR goals and adhere to its CSR principles consistent with its strategic business direction.
The philanthropic motivations of employees can also act as a key driver for CSR related activities within a company. Many organizations allow employees to allocate agreed time for such work. In some cases time-off and sabbaticals as offered as well. Individual employees who already are engaged with their local communities often will carry their pet causes to work, where a small donation and a little volunteer activity there can soon create a momentum of its own that may take the shape of formalized support from the organization. Another way is to create cross functional responsibility roles to drive elements of the implementations plan. Or assign skill linked tasks on special projects. For this though it is critical that employees are well oriented into the development approaches adopted by the corporate and are sensitized to grassroots realities. Employees who find it challenging to allocate time outside of office can help by running and promoting campaigns within the organization for their chosen cause.
More and more Corporates are realising this and moving towards an intrinsic CSR strategy, aiming for a long term sustainable change. The Indian CSR scene is out of its nascent shell and ready to evolve to the next stage.