The world is changing rapidly influencing all aspects (including ECONOMIC, SOCIAL and ENVIRONMENTAL) of our society and our lives. Though these changes are inter connected, they are dealt with as independent systems. The corporate world was limited to the economic systems till the sustainability and CSR movement became a reality all over the world. However, all these changes are part of a macro level cycle of change analyzed by ALVIN TOFLER in his path breaking book, THE THIRD Wave starting with Agricultural Revolution, followed by Industrial Revolution, Information & Technology Revolution, which is in the last leg and the next is knowledge Revolution which is around us. Policy decisions in coming times need to be taken keeping the above realities of change cycles.
Adding to this, our beloved Former President Dr. Abdul Kalam in his famous book IGNITED MINDS says, In the twenty first century, a new society is emerging where knowledge is the primary production resource instead of capital and labor. Efficient utilization of this existing knowledge base can create wealth for us in the form of better health, education and other indicators of progress. The ability to create and maintain the knowledge infrastructure, to enhance skills and increase productivity through the exploitation of advances in various fields will be the key factors in deciding the prosperity of this society. Whether a nation qualifies as a knowledge society is judged by how effectively it deals with knowledge creation and knowledge deployment.
The trend Of CSR spending mandated by government or through voluntary spending on social and environmental issues, aligning with the needs of the country and to help companies mitigate risk, to create good will, to improve share prices, attracts employee etc, justifying the CSR investments. Now there is global trend of large corporations to focus on economic bottom lines. The Social, Economic and Environmental activities and bottom lines are integrated strategically at the top, in which the CSR foundations support the corporations in strategic way.
The above background lays a clear direction and scope of work for CSR Departments and CSR FOUNDATIONS whoever is in charge of the task of CSR Planning and implementation to be manned by people with knowledge adequate to comprehend the Development conditions of the country. As of now, including the background of six decades of independence from alien rule, India, despite its burgeoning population, grinding poverty, large-scale illiteracy and unparalleled diversity, has not only remained successfully afloat in the democratic ark, remarkably so in a destabilizing neighborhood, but can also rightfully boast of significant advances made in agriculture and food production, science and technology, trained technical man power and higher education to name a few areas of success. While these are the positive developments, there are other areas where India is lagging as a nation. Still considered as a developing country, India ranks 131 out of 188 countries according to the UNDPs human development index (HDI). When it comes to competitiveness on the global economic front, according to the world competitiveness Index it ranks 40th out of 137 countries. And when it comes to corruption, Indias record is rather dismal as it is ranked 81 out of 180 in the corruption perception Index by the German NGO Transparency International, which arranges nations in the order of perception of corruption in the country. Needless to mention, the above three indices have a direct bearing on governance. Therefore, while trying to understand development, one needs to understand the management of development including development planning, implementations and monitoring etc. Here comes the role of Governance and service Delivery systems in influencing development.
Apart from understanding the Development needs of the country, the CSR expert needs to comprehend the corporate systems including all its sub systems, with its needs and with the expertise of strategic management to develop ideal strategically relevant development projects and programmes to be adopted by the corporate as CSR projects.
Corporate social responsibility is about the responsibility of the corporate to integrate its economic bottom line with social and environmental bottom lines. In doing so, it has to integrate the three considerations into the decision-making process relating to the strategies, structures and processes of business. Though CSR is a buzzword in India today, it is yet to get out of the charity and philanthropy mould. Since Vedic period, giving is a social norm, which has evolved in to CORPORATE GIVING in the modern times. This was without explicit demand or pressure from any stake holders.
Today, the scene has transformed in to a demanding group of stake holders, demanding to know the impact the corporate is making on the social and environment canvas. Empowered by ICT, the stake holder groups are able to scrutinize HOW business is conducted. Any negative impact of the business process on the society or environment has the serious Risk on the business. The cases like ENRON, SATYAM and BP OIL SPILL speak for itself. CHARITY approach was relevant in the era environment of limited or absence of external scrutiny: by any stake holder including Government, Civil Society, Financial institutions, Capital markets, Media and consumer rights activists etc. Today, the CORPORATE is exposed to scrutiny of all these groups. Thus it is not for the INTEREST OF BUSINESS, to be limited to CHARITY or CORPORATE GIVING. Recent Mumbai High Court Judgement against a power company and in favour of RTI Activists is evidence of the trend. BUSINESS has to appreciate this trend of rising awareness and expectation of the stake holders, who hold the capacity to damage its interest, directly or indirectly. Through a simple SWOT analysis, it would be clear that external threats has to be appreciated and internal process change to be initiated to respond to external threats by augmenting internal strengths and controlling internal weaknesses.
Today, BUSINESSES all over the world including India are facing the challenge of change of internal processes, demanded by an unprecedented change in the business environment, which has made United Nation rise to the occasion and create a special agency, called, UN Global Compact (UNGC) to promote Responsible Business practices. Number of standards of measure of CSR performance and CSR reporting has evolved in different parts of the world.
While, this is obvious that the RISK-THREAT factor induces the business to Comply, it also, by default provides an opportunity to prosper. The businesses have to appreciate this opportunity hiding in this game of Responsible Business, CSR, Sustainability etc, and encash the opportunity through matching strategic maneuvers.
This is easier said than done. In India, Public Sector Business, who remained in the clutches of their parent Ministries for very long have developed CULTURE OF COMPLIANCE, which makes strategic changes very difficult. The Indian arms of global MNCs have their parent CSR policy to follow with the level of freedom to adapt to Indian condition. The Indian private sector companies are open to the new business opportunity created by SUSTAINABLE BUSINESS environment. Thus, it is left for action by the individual business leaders and his creative vision and commitment to act.
In summary, sustainability and CSR environment, provides an opportunity to be free of business RISK and provides OPPORTUNITY for innovative businesses along with improvements in the economic bottom line through,
- Improved relations with the investment community and better access to capital
- Enhanced employee relations that yields better results respecting recruitment, motivation, retention, learning and innovation, and productivity
- Stronger relationships with communities and enhanced license to operate
- Improved reputation and branding
- Stronger financial performance and profitability though operational efficiency gains
Thus, CSR need be viewed by businesses as a form of investment that helps to encash the new OPPORTUNITIES and mitigate potential RISK.
The facts presented above clearly speaks of the need for highly knowledge oriented professsinals with insight in to trends of the development systems in India and the world along with the realities of the corporate Systems with an aptitude for creativity and innovation. Against this background, what is being observed in India, after four years of mandatory CSR law is that the corporate out of their limited understanding of CSR as a corporate subject have passed it on to the hands of NGO managers as a development or social sector subject. Now CSR Domain is manned large extent with managers from NGO sector with few years or many decades of NGO Experience, limitting the possibilities and the potentials of CSR & SUSTAINABILITY DOMAIN.
Generally, CSR Managers with NGO background are limiting the growth of CSR domain by virtue of their limited knowledge on CSR and disinterest to learn and create solutions for development applying the strengths of a corporate, which they do not comprehend. As their understanding is limited to few development domains, they might have worked. And thus, they focus on their known areas of development done in the past and unable to connect with corporate systems and also are unable to innovate creatively design new development projects matching with the needs of time and engaging with the core competence available with the company. Essentially the NGO managers in their CSR Avatars are unable to connect with corporate systems and cultures and prefer to stay limited to their hands n grassroots experience of few projects without trying to extrapolate and comprehend the larger -holistic scene.
This incompetence of NGO managers are greatly affecting the ROI of the CSR investment of Companies and the companies generally not getting motivated to spend for CSR in absence of innovative CSR Projects with promise of high reward in terms of good will.
CSR domain has unfortunately become MONEY focused and not KNOWLEDGE focused in the era of knowledge and creativity losing potential benefits CSR.
Its high time CSR Eligible Companies, groom their own corporate managers who understand and appreciate corporate cultures to be trained in CSR and Development Subjects and also expose their top management to CSR Training and learning in the areas of Strategic CSR, Sustainability management etc. and duly exhaust the legal provision of 5% of CSR earmarked for CSR Education and training.