The game changer
Corporate Social Responsibility – the road ahead needs to be gravelled finely so as to serve following generations.
From being a voluntary act of kindness and philanthropy to finding its mention in the reporting structure of a significant chunk of corporate, Corporate Social Responsibility (CSR) has come a long way through in the past years as we look back to its historical existence. Not a single day goes by for any corporate entity, or even professionals for that matter, without the mention of these three words in a single breath. The tradition of benevolence has given way to corporate strategy, the compulsory formulation of a concrete CSR Policy by a well-defined group of people, the CSR Committee. That said and done, each and every confederation, federation, and association of companies or industries, bodies of academicians, professionals and policy makers; not only in the Indian mainland but across the globe keenly look forward to analyse the efforts of its members in the years gone by and try to suggest and guide them on what we can fondly call "the road ahead". And as far as CSR is concerned, the road ahead needs to be gravelled and stoned finely and in such a manner to serve the generations to follow.
The Indian path to growth is hurdled by issues like poverty, unemployment, hunger, poor health, inadequate water and sanitation, to name a few. And with all these issues Indian society, CSR comes forth as the right ingredient or building block in the nation's path to success. Various surveys have been conducted recently to gauge the performance of the companies in the post-section 135 era. The results have been astonishing, fulfilling, and intriguing as well. According to the Accenture-FICCI Report, India's ability to harness the advantages of its demographic dividend will decide its economic destiny. The nation has a very significant resource which it needs to fully tap, the resource of potential innovation of its people. Just as political democracy can lift nations by building on the combined ideas of their citizens, democratised innovation can lift countries' economic systems and spur sustained, profitable growth for companies.
In a survey conducted for the year gone by, it was revealed that more than 90 per cent companies have spent the allocated amount towards health and education, followed by environment and rural development. For companies which have not been able to spend the mandatory 2 per cent, the various reasons cited include scaling up of activities, multi-year and long-term projects, difficulty in identification of appropriate partners, exploring new opportunities and areas of intervention, and delay in planned spends which seem quite reasonable. Another significant revelation is the fact that 18 per cent of the companies have committed to carry forward the unspent CSR amount this year, even though no such requirement is mandated by the Act. Another report on CSR spending in India has depicted a 13 per cent rise in YoY spending in CSR activities by companies. All these and more are indicators to the fact that the Indian corporate has taken up its social responsibility quite seriously.
In a document rolled out by the European Commission titled "A renewed EU strategy 2011-14 for Corporate Social responsibility", a simple definition was accorded to this three worded herculean term, "the responsibility of enterprises for their impacts on society". This included maximising the creation of shared value for their shareholders and stakeholders and society at large and identifying, preventing and mitigating their possible adverse impacts. CSR, as on date, is nothing, if not more, less than a trend in itself and the companies pursuing it, trendsetters. No doubt, we as professionals are seeing it as the true game changer of the modern times. While years ago, marketing strategies and Corporate M&As were the path pavers, CSR now holds the leash to guide the corporate on the path of success.
The accountability of a business enterprise to its variety of stakeholders is what begets CSR its current significance. The enactment of Companies Act, 2013 has only heightened this fact. Stakeholders are now asking for more, more than what's prescribed in the law, more than what any company is bound to do. Pushing the limits, searching for avenues for social growth and development, bringing about innovation in investment, without sidelining the economic objectives seems to be the norm of the day; one which must be followed diligently. The professionals, too, have a significant role to play even though not allocated by law. Be it practising professionals who may double up as consultants in formulation of an effective and customised CSR policy best suiting the business, area of operation, etc. or those in full-time employment who are entrusted with the task of the formation of CSR committee, or seeing to it that the meetings of the said committee are held in an orderly fashion and the Policy so formulated is implemented effectively and efficiently yielding maximum results; each of them has a role to play which is quite irreplaceable. CSR has truly been the game changer of sorts by aligning, realigning, modelling and remodelling the roles of various parties as regards its own formulation and implementation. Each area seeks new ideas, ideologies and innovation.
A voluntary act has become a significant growth enhancer in an economy struggling with numerous economic and social issues. CSR is perfecting the art of bringing together the various goals of the society and those of the corporate implementing it. And in this alignment of the corporate, social and political goals, the economy is bound to find what it has been looking for all this time, 'inclusive growth'.
(Dr. Shyam Agrawal is President, Institute of CompanySecretaries of India. Views expressed are strictly personal.)