We laud corporate social responsibility. As a society, we put those generous acts of concern that companies do at the top of the scale when it comes to trust and our concept of product reliability.
There are over 100,000 pages on corporate websites dealing with corporate social responsibility (CSR), over 600 books listed on Amazon and more than 50 percent of the Global 250 corporations issue corporate responsibility reports.
While CSR effort has been largely voluntary in most countries, it is mandatory in some like France, Denmark ,Sweden, Indonesia, Malaysia. India has taken a giant leap by mandating it by a statute of law. Under India’s Companies Act of 2013, companies that have a net worth of Rs.500crs, a turnover of at least Rs.1000crs, or net profits of at least Rs.5crs must develop a CSR policy and spend the minimum (2 percent of net profit) required on CSR. And of course, they are required to report their CSR projects.
In India, Mahatma Gandhi introduced the concept of trusteeship to companies in the early 1900s, encouraging them to take a leading role in social responsibility. So, the Indian parliament’s landmark act is really not earth-shaking when it comes to social perspectives in the world’s largest democratic nation.
While there has been some amount of criticism & fair amount of cynicism around the law, in the eyes of many, the implementation of this act is not only fair but even necessary. We live in a India of huge disparities, with 850mn living below $2/day with serious challenges yet to be met in the areas of education, food, water, health, shelter & basic human rights.
Complicating the issue is growing confusion over the definition of CSR. CSR has been described as charitable giving, strategic philanthropy, community involvement, or cause-related marketing. However, none of these descriptions really does the concept justice. CSR involves doing business in a responsible fashion that delivers value not only to the organisation, but also to its stakeholders and the community within which it operates. CSR covers five main areas: environment, community, employee welfare, financial performance and corporate governance.
The challenge going forward for the companies will be how to come up with the most impactful CSR programs that not only address the social, cultural & environmental challenges but also boost the company bottom line. CSR needs to run as businesses are run – Setting clear objectives, Investing in Objectives & Measuring plus Reporting performance publically. The companies’ failure to integrate their brand and CSR strategies is often the reason why CSR initiatives are not as well received or effective as intended. In fact, in some cases, they actually backfire.
To overcome this, Brand heads and their CSR counterparts need to follow a few key principles that will enhance their success as well as that of the organisation as a whole.
1. The business strategy must be the foundation upon which both the CSR and brand strategy is built. Furthermore, any promise made must be supported by business proof points. And finally, the alignment with the brand should drive those CSR elements that need to be communicated to key stakeholders – internal and external.
2. Thus, the first critical step in developing an integrated and effective CSR strategy is to assess how CSR investments support business objectives and practices.
3. This should be followed by identification of the subset of business objectives that both CSR and brand are best suited to support.
4. The strategic alignment of CSR and brand should be supported by an implementation plan containing key initiatives, core messages and supporting business proof points.
If companies adopt this Strategic and integrated approach towards CSR, stakeholder expectations will be met and CSR activities will help achieve their desired result, namely to build successful brands and businesses.
Without this commitment, CSR is destined to be viewed as yet another buzzword.
The post has been written by:
Chandni Jafri, Founder & ED, SLSV.
For more details on her, click here