CSR Can Contribute To Sustainability
Given the CSR requirements within the 2013
Companies Act, corporate India will be playing a more active role in addressing
India’s social concerns in the coming years. While it is still too early to
evaluate the utility of such a progressive law, it is clear that companies have
the potential to be a major force for good. There are several important reasons
for this.
Companies Act, corporate India will be playing a more active role in addressing
India’s social concerns in the coming years. While it is still too early to
evaluate the utility of such a progressive law, it is clear that companies have
the potential to be a major force for good. There are several important reasons
for this.
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| Dr Ruth Shapiro |
First, of course, is the reality that 2 percent
of after-tax income will now go towards certified CSR activities. According to finance minister Arun
Jaitley in a March 2016 Economic Times
article, companies spent Rs 8,347.47 crore in the last year. Those reading this newsletter and thus are
probably in the social sector will know that a fair amount of these funds are
being spent inefficiently—or even questionably. But it is clear that the bottom
line is massive and will trickle through to increase the impact of many social
delivery programs throughout India.
of after-tax income will now go towards certified CSR activities. According to finance minister Arun
Jaitley in a March 2016 Economic Times
article, companies spent Rs 8,347.47 crore in the last year. Those reading this newsletter and thus are
probably in the social sector will know that a fair amount of these funds are
being spent inefficiently—or even questionably. But it is clear that the bottom
line is massive and will trickle through to increase the impact of many social
delivery programs throughout India.
Second, companies do have a vested interest in
contributing to clean, stable environments where they can find and keep
well-educated and productive employees.
While there are examples of short-sighted companies that act contrary to
this idea, many are interested in long-term health and sustainability and
recognize the need to invest in a conducive operating environment. We look to the extraordinary example set by
Tata Sons, which lists its purpose as being “committed to improving the quality
of life of the communities we serve.”
contributing to clean, stable environments where they can find and keep
well-educated and productive employees.
While there are examples of short-sighted companies that act contrary to
this idea, many are interested in long-term health and sustainability and
recognize the need to invest in a conducive operating environment. We look to the extraordinary example set by
Tata Sons, which lists its purpose as being “committed to improving the quality
of life of the communities we serve.”
The third reason and the one that our Centre is
particularly excited about is the role that companies can play to build
capacity in the social delivery space. Social delivery organizations may be
non-profits, but they need to think more like businesses. To maximize their impact, they should be
concerned with transparent accounting, financial forecasting, strategic
planning, organizational management and development and a whole host of other
skills that have traditionally been labeled as business skills. These skills are in ample supply within the
private sector. What we need to do is
establish systems that allow technology transfer from companies to social
delivery organizations which will help to build capacity. While illustrative examples of this type of partnership
are in short supply, there are some that point the way forward. Here are two examples, one in India and one
in Malaysia.
particularly excited about is the role that companies can play to build
capacity in the social delivery space. Social delivery organizations may be
non-profits, but they need to think more like businesses. To maximize their impact, they should be
concerned with transparent accounting, financial forecasting, strategic
planning, organizational management and development and a whole host of other
skills that have traditionally been labeled as business skills. These skills are in ample supply within the
private sector. What we need to do is
establish systems that allow technology transfer from companies to social
delivery organizations which will help to build capacity. While illustrative examples of this type of partnership
are in short supply, there are some that point the way forward. Here are two examples, one in India and one
in Malaysia.
Dilasa Sanstha has been working with farming
communities in Vidarbha from the mid-1990s with the goal of helping farmers to
be more productive and earn stable livelihoods. Several years ago, Dilasa
entered into a strategic partnership with the Axis Bank Foundation (ABF). ABF helped Dilasa set up funding mechanisms
that expanded their ability to provide rural credit. They also worked with them to strengthen its
internal budgeting and accounting system, and supported the creation of a
monitoring and evaluation system—for the first time, Dilasa could collect
critical impact data on beneficiary income, household assets, migration level,
education levels, diet, investment plans, and insurance policies. The
partnership with ABF enabled Dilasa to operate at a much larger scale and help
a great many more farmers and rural communities.
communities in Vidarbha from the mid-1990s with the goal of helping farmers to
be more productive and earn stable livelihoods. Several years ago, Dilasa
entered into a strategic partnership with the Axis Bank Foundation (ABF). ABF helped Dilasa set up funding mechanisms
that expanded their ability to provide rural credit. They also worked with them to strengthen its
internal budgeting and accounting system, and supported the creation of a
monitoring and evaluation system—for the first time, Dilasa could collect
critical impact data on beneficiary income, household assets, migration level,
education levels, diet, investment plans, and insurance policies. The
partnership with ABF enabled Dilasa to operate at a much larger scale and help
a great many more farmers and rural communities.
Another example of this kind comes from Malaysia. Mercy Malaysia was created by a small group
of doctors in Malaysia who wanted to help when natural disasters occurred such
as the tsunami in Southeast Asia in 2005.
Mercy struggled with creating the systems necessary to be nimble and
effective when responding to disasters in real time. They partnered with
Khazanah Berhard, Malaysia’s sovereign wealth fund. Khazanah helped Mercy develop management
systems that help Mercy manage people and resources and deploy them efficiently
to a disaster zone. The partnership has
helped Mercy become a serious and internationally acclaimed provider of
disaster assistance around the world.
of doctors in Malaysia who wanted to help when natural disasters occurred such
as the tsunami in Southeast Asia in 2005.
Mercy struggled with creating the systems necessary to be nimble and
effective when responding to disasters in real time. They partnered with
Khazanah Berhard, Malaysia’s sovereign wealth fund. Khazanah helped Mercy develop management
systems that help Mercy manage people and resources and deploy them efficiently
to a disaster zone. The partnership has
helped Mercy become a serious and internationally acclaimed provider of
disaster assistance around the world.
In both of these cases, the companies provided
financial resources and technical resources.
They committed to the social delivery organizations for the longer term,
developing the trust and the relationships necessary to make the partnerships
really work.
financial resources and technical resources.
They committed to the social delivery organizations for the longer term,
developing the trust and the relationships necessary to make the partnerships
really work.
I hope that over time, we see more examples of this
type of partnership emanating from India. This will require leaders from the
business and social sectors to think more deeply about how companies can
contribute to social good in India, beyond the financial commitment required by
the Companies Act.
type of partnership emanating from India. This will require leaders from the
business and social sectors to think more deeply about how companies can
contribute to social good in India, beyond the financial commitment required by
the Companies Act.
By- Dr. Ruth Shapiro
Dr.
Ruth A Shapiro is the Chief Executive and Founder of the Centre for Asian Philanthropy
and Society (CAPS). CAPS is committed to increasing the quality and
quantity of philanthropy and social investment in Asia.
Ruth A Shapiro is the Chief Executive and Founder of the Centre for Asian Philanthropy
and Society (CAPS). CAPS is committed to increasing the quality and
quantity of philanthropy and social investment in Asia.
CAP can guide you through your corporate social initiatives. Do contact us at connect@capindia.in