The article explores these different typologies and how they have structured their CSR projects, depending upon the nature of the industry – manufacturing/ retail/ service etc. their turnover and Profit After Tax (PAT), their vision and mission of CSR and the impact that they wish to create.
Corporate Social Responsibility in India has witnessed a surge in community spending over the last three years. The official data reveals that companies have spent nearly Rs 28,000 crore on social welfare activities.
A closer scrutiny suggests that companies have adopted different methodologies in planning and implementing CSR interventions. While most would associate themselves with not-for-profit agencies and social enterprises in implementing CSR projects, some of them have their own corporate foundations where they are either directly implementing or partnering with a local NGO.
There are other corporates (very few Indian ones) where social initiatives are in alignment with the business and therefore are being implemented by both business and CSR teams, along with other organisations.
The article explores these different typologies and how they have structured their CSR projects, depending upon the nature of the industry – manufacturing/ retail/ service etc. their turnover and Profit After Tax (PAT), their vision and mission of CSR and the impact that they wish to create.
TYPE 1: An Integrated Community Development approach near the corporate facility
Manufacturing or extraction-based industries will necessarily like to have their CSR programmes in and around their facilities, typically focusing on multiple thematic areas for holistic development of communities. Some of them may pick up specific focus areas such as education/ healthcare/livelihood close to their operations.
These are long-term programmes, which give them social license to operate in the region. The programmes are primarily implemented by NGO partners (local) who have expertise in the thematic area and monitored by CSR teams. In the absence of a CSR team member, it is monitored by local HR/ Admin/ EHS department.
In most cases, the project models are defined by implementing agencies/ non-profits basis local needs of the community. Adoption of villages around the vicinity of their plants and working on village development issues would fall under this type of CSR intervention.
TYPE 2: Need-based interventions across geographies
Large corporate houses having their own trusts or foundations are not necessarily bound by geographies in defining the area of intervention. The focus is on the identification of a core need of a community and aligning it to the thematic area defined by corporate foundation or trusts.
The project-models are defined by either large foundations or trusts themselves (wherever they are directly implementing) or along with local non-profit agencies. The foundation’s team members monitor the project along with the local partners.
These projects are driven by the moral obligation of giving back to the community and ensuring their social welfare.
Within this type, a sub-type that exists is one which comprises large foundations whose thematic area of social welfare will match the business of the company.
For instance, a pharmaceutical may have a foundation focusing on healthcare initiatives. If these foundations belong to large conglomerates, then it will be guided by the core social need in geographies and will work on scale in various geographies.
TYPE 3: Aligning interventions with core competency
These organisations are driven by providing value to communities by leveraging their core strength or business expertise. This model is typically suited for a services industry where geographies do not necessarily bind interventions.
Typically seen in IT/Telecom and Financial Services industry, these CSR projects also involve capacity building of not-for-profit agencies or implementing organisations.
An example of it may include an IT company that, as part of its CSR activity, develops the IT systems of the implementing organisation, while the main programme may be providing digital literacy to school children.
The projects are need-based, where models are co-created with implementing organisations. The implementing partners can be either large NGOs that have either a state or national level presence, or a local ones having expertise in a particular thematic area.
The projects are monitored by the CSR team with the business team also involved in capacity building.
TYPE 4: Creating Shared Value
Some Indian companies have been innovative when it comes to integrating CSR within their business value chain. They believe that the pursuit of profit is not antithetical to long-term, economic, social development of the nation.
As per the classic definition of as proposed by Michael Porter and Kramer, shared value projects involve:
Re-conceiving products and markets, Re-defining productivity in the value chain, or Enable local cluster development which includes functioning infrastructure and effective legal system.
Here the programmes are implemented by business teams with or without the CSR teams and ensure that maximum impact both regarding creating economic and social value. Geographies do not restrict them.
This model ensures sustainability of the initiative as it is directly linked to business and therefore is of prime importance to the corporate. Globally a lot many companies are working using shared value approach as a business strategy to get customer acquisition and expand market presence, while simultaneously addressing socio-economic challenges.
Such programmes also (but not necessarily) see collaborations between companies, implementing organisations, UN organisations and multilateral and bilateral funding organisations.
In conclusion, the four typologies outlined in this article may not be all-inclusive types that companies may adopt. In some cases, they may use a mixed approach.
It can be argued that for developing CSR projects as long-term and sustainable, a shared value approach would be an ideal. However, it will be a gradual journey for most Indian companies to move to this approach.
One way to enable them to leapfrog into taking these initiatives could be a nudge by conscious investors/shareholders and customers where they insist that before investing in companies they want to see the interventions that companies are taking for communities and environment.
Another could be a boost, which can be in the form of support by the government where it encourages and appreciates Indian companies already investing in such initiatives.
Till the time the right stakeholders don’t ask the right questions to companies, the CSR interventions will remain confined to social welfare activities for the base of pyramid primarily driven by the diktat of minimum investment into CSR.
Therefore all stakeholders of the companies- shareholders, investors, customers, employees, communities, regulatory bodies, media etc. need to re-look at CSR as a vertical that can and will contribute to the welfare of all stakeholders and will add value to the bottom line.
It is this change in mindset that can ensure long-lasting impact on both the business and society at large.
(Written by Richa Pant and edited By Vinayak Hegde)
Article Source: The Better India