Importance of Professionals in Corporate Social Responsibility – Fiinovation

The advent of corporate social responsibility (CSR) in India opened new avenues for employment for people belonging to the social development sector. The mandate under the Companies Act, 2013 made it a more focused area for the businesses which might look at CSR in a strategic manner. Hence, the effectiveness of CSR initiatives lies in the hands of CSR professionals who are well versed about the concept and can utilize the initiatives for benefiting the organization.

It has been observed that in most of the businesses, there is still no CSR department, rather it’s the Human Resource department or the senior management which takes care of such initiatives, that too because of mandatory compliance. When called to enquire regarding the CSR department, most of the times the calls are answered by the HR and not by the CSR committee members. This brings us to the question that, are the businesses really serious about giving back to the society or considers CSR as a tick-box exercise?

The presence of CSR professionals in the organization is definitely an indicator of the seriousness of the initiatives. There are several benefits attached to having a CSR professional within the organization. Not only it provides chances to improve the social return on investment, but also improves the communication of CSR initiatives to the stakeholders. As a brand, businesses look to increase their consumer base and market outreach. CSR definitely provides an opportunity to boost the brand value, and the CSR professionals do play a significant role in devising implementation strategies.

Globally, leading CSR professionals have moved one step ahead and are looking not just to initiate ‘give back’ projects, rather incorporate the concept of being a responsible organization across the value chain. They help the corporate communications department to put a number on the value that has been created through the CSR initiatives. It is always recommended to not to give the job of handling the CSR manager position to someone in the HR or any other department, so that there can be a complete analysis on the social return on investment.

With increasing competition among the businesses, CSR could be an innovative mechanism to differentiate a brand from its competitors. The increase in effectiveness of the CSR programmes due to the presence of CSR professionals is definitely a motivating factor for the socially responsible investors. It is also due to the increasing demand of CSR professionals in the businesses and business foundations that several b-schools have started offering degrees in CSR. It is expected that in the years to come, the businesses which doesn’t have CSR professionals will look to recruit them to optimize their social return on investments. Hence, for a CSR professional the future seems to be bright in terms of employment opportunities, but their definitely will be more pressure on them with greater responsibility towards the organization and society at large.

 

By Rahul Choudhury

Media & Communications, Fiinovation

CSR Contributions – Is it a Burden for the Companies?

Despite global turmoil, India continues to emerge as one of the fastest growing investment destination in the world. The Indian government’s efforts towards ‘policy reforms’ and ‘ease of doing business’ are major steps directed to meet the demands of its citizens. Socio-economic growth of the nation is directly linked to profitability of businesses. Without growth, the domestic consumption is not likely to increase. This is one major reason for the businesses to invest their share of profits in activities that are aimed to benefit the marginalised sections of the society.

Although, Corporate Social Responsibility (CSR) is mandatory in India for businesses falling under the CSR ambit, yet the attitude of the Indian companies have not changed much. Businesses are mostly interested in earning profits even after realising that businesses can sustain only if communities prosper. Fiinovation, a global CSR consulting company suggests that companies who are mandated to contribute towards CSR are merely focusing on compliance, rather than impact of the initiative.

In such a situation, when there is not much visible impact, the companies tend to believe that funds have gone wasted. Hence, CSR becomes a burden for them.

It is understandable that while the CSR spending went up from Rs 8,330 crore in 2014-15 to Rs 9,882 crore in 2015-16, the utilization of funds and overall social outcomes have not been quantified or reported. As per experts, it is important for businesses to understand and measure the impact and return on investment of CSR initiatives. Research has also suggested that the rise in contributions by the larger businesses is related to partnership with implementation agencies, mainly CSOs for execution of the CSR programmes. It is noteworthy for the companies facing challenges in CSR to understand that partnership with CSOs help boost compliance of the law.

Effectiveness of the CSR programmes can also be determined through monitoring, evaluation and impact assessment studies. The companies must understand the purpose of CSR and actively engage in its implementation. It is not a matter of compliance, rather it’s about their survival. Companies should be looking to leverage the initiatives to build their brand image. Through CSR, the government is also trying to push the rural development agenda to spur economic growth. As per the Union Finance Minister Arun Jaitley, the CSR process which is perceived as burden by the businesses in India can help double the income of farmers. Hence, in this collective effort to eradicate poverty and boost socio-economic growth, businesses should play a pro-active role through collaborations with the civil society organisations.

 

By Rahul Choudhury

Media & Communications, Fiinovation

Corporate Social Responsibility – In Context of 2017

The year 2017 brings new hopes in the social development sector with more businesses contributing towards improving the standard of living of the people. With praises across the country for their contributions, the businesses are now more focused on strategising CSR rather than doing charity. However, there are several questions which are not answered as CSR projects are not good parameters for judging societal welfare. Today, it is unclear whether CSR spending by businesses have increased or not as compared to the days before the mandate, with not much available information.

However, data from the last two years suggest an increase of CSR funding with Indian businesses spending INR 9,309 crore in 2015-16. This is INR 163 crore more than what was required by the law and INR 703 crore more than 2014-15. The major focus areas for businesses have been Education and Health and they are likely to remain one of the most favoured sectors for CSR investments.

Understanding the present situation, Fiinovation, a global CSR consulting company analyses the trends in CSR for the year 2017.

1. Environment – After the successive droughts that nearly crippled the rural economy, it is expected that businesses will look to invest their CSR funds in projects that mitigate the climate change risks. Keeping focus on water, businesses will look to implement CSR projects for natural resource conservation, rain water harvesting, safe drinking water, watershed development and irrigation. Organic agriculture, climate smart agriculture, grain production with new innovative methods, etc. will also receive adequate focus. Several companies are looking to reduce their harmful environmental impacts.

2. Education – Several businesses will rather not look to diversify and stick to their CSR projects in education. It is expected to remain the favourite sector when it comes to CSR expenditures. Although, there might be a shift towards digital literacy, digital education and higher education to meet the current demands of the nation.

3. Health – Similar to Education, investments in health projects is likely to continue even this year. Focus will be on preventive healthcare along with healthcare infrastructure facilities including ambulances, digital check ups, diagonistic centers etc. Several businesses will also look to invest in public health in a public-private partnership model working in tandem with the government initiatives.

4. Skill Development – The Indian Government is currently committed towards providing skill development trainings to the youth. The government also provides additional support for entrepreneurship of the SC, ST and women. The government has also urged the businesses to contribute their CSR funds towards skill development trainings to ensure that the emerging workforce is formally skilled. It is expected that businesses will also look to boost infrastructure in the ITIs and Training Institutes to support the government. There are several businesses who are also investing in Sustainable Agriculture projects by providing trainings to the farmers.

5. Other Sectors – It is also expected that several other sectors will receive CSR funding but not at a very large scale. Swachh Bharat, Clean Ganga, Digital Literacy, renewable energy, etc. are some areas which will receive contributions.

The impact of the CSR law can be better understood after the end of this year, when experts review the first three years after the enforcement of the law.

By Rahul Choudhury

Media & Communications, Fiinovation