No Smoke & Mirrors Here: CSR is the Way Forward

Corporate Social Responsibility (CSR) has come up as an important corporate mantra of our times, that we need to internalize and reflect. Organizations of all shapes and sizes globally are ramping up their CSR initiatives with greater enthusiasm than before to give back to society and ensure that their practices are aligned with the ethical paradigm of modern-day corporate behavior. This is an irreversible shift in our operating landscape and people or organizations who continue to ignore it will certainly do that at their own peril.

To me, both as a leader and an individual, CSR is part of a virtuous cycle of giving back to the society we live in and have received so much over the years. Through my roles as the Chairman of CII Northern Region and Chairman & CEO of CBRE India, SEA & MEA, I continuously reiterate its importance to the council members and CBRE team because it is in helping those with the greatest need can we foster an inclusive and all-encompassing economic growth environment.

Current Scenario: Are Organizations Serious About CSR?

With the amendment of the Company’s Act 2013, the government has been working as a facilitator and enabler of CSR project implementation, various other policy initiatives to highlight its importance and to bring together different stakeholders in the ecosystem have also been on the government’s radar.

Not unsurprisingly then, CSR impact has steadily grown and shows in numbers – from 2014 through 2019, CSR spends grew by over 85%, compounded annually. Of this, private funding (foreign sources, individual philanthropists and domestic corporations) constitutes almost 25% of social sector funds, while the government continues to be its largest contributor.

Another set of numbers from the Ministry of Corporate Affairs suggests that INR 71,190 crores were spent under CSR initiatives from FY14-15 through FY18-19, out of which more than 78% was focused on five impact sectors, Education (30%), Health Care (17%), Rural Development (11%), Environment Sustainability (7%), and Poverty / Malnutrition (6%).

CSR in COVID Times

As COVID-19 turned the world on its head, governments and businesses stepped up to support communities through relief activities, and rightly so, to address a challenge that we hadn’t ever seen before. However, the consequent impact was felt more by original beneficiaries of Education, Women Empowerment, Healthcare, Poverty and other such initiatives.

A study by FSG with 22 NGOs and 18 CSR company heads suggested that traditional CSR activities were impacted drastically with a shifting focus to provide immediate COVID relief and this over time could hinder the development goals for India and the world at large. It was further noted that for instance, women’s jobs were 1.8 times more vulnerable to the crisis than men—a segment that accounts for 34% of global employment and 54% of overall job losses.

The Way Forward

Looking ahead, the emphasis on CSR is taking on another dimension, that of a positive relationship between brands undertaking CSR and their consumer’s attitude towards them, besides the price and other traditional buying considerations. While organizations are making visible efforts to give back to society by instituting programs, enhanced CSR impact reporting is a need of the hour. CSR reporting across the globe is driven by regulators, governments and stock exchanges and is aligned to UN Sustainable Development Goals (SDGs) to assess the quantifiable impact of initiatives.

In India, large firms with sizable CSR investments have matured in their evaluation and monitoring programs. However, having standardized frameworks would help in aggregating impact uniformly and fast-track participation from medium to small organizations. The HLC report 2018 had already made recommendations in this regard and I would urge the corporate fraternity for due consideration to these and for their structured adoption.