- Comments on the Mandatory 2% contribution to CSR
Companies, governments and communities live in a symbiotic relations and there is need for all the three to understand this and respect each other’s contribution to the whole system. Limited liability companies get many benefits from the community through the government in the form of subsidized allocation of natural resources, policy incentives like tax breaks, preferential treatment in supply of electricity, water, financial services and many others. So, it will be less than honest to say that all profits should belong exclusively to the shareholders. If things go wrong due to actions of companies, the liability laws limit the exposure of executives and shareholders and the communities take the hit, say in the case of an oil spill, or a fire in a factory or for example the Bhopal gas accident. So, all things considered, I do not see anything wrong in mandating a 2% structured CSR spend by companies in a certain bracket. In fact, I feel this law helps them indirectly and now they can plan it better and collaborate and improve the whole ecosystem and the benefits will come back to all stakeholders.
2. Sustainable Development the concept and practice: your comments please
In my opinion only sustainable practices are eternal. The non-sustainable ones are driven by short-term greed or fear. Each one of us is blessed with inner eye. Even companies have this eye. Hence when they make excessively exploit people or environment, they look for some way of redemption. I feel there are four types of organisations – the Robin Hood types who take from some and give to some others; then there are Bill Gates types, who play hard in one period and then give heartily in another; some are what I would say are ideal types who run sustainable businesses as a way of life ( I would put TATAs largely in this category); and lastly the ones that only take and live in mistaken contention that their role is to singularly be driven by monetary returns to the shareholders and have no responsibility towards stakeholders and community. This 2% regime is beautiful way to provide a painless corrective path to such organizations.
3. “Inequality will be a driving force for new thinking about greater commitment to ethics, morality in business decisions and capitalism itself”: Please comment.
Dr Margaret Chan, the Director-General of the World Health Organization in her Keynote address to the Regional Committee for the Western Pacific at the Sixty-fifth session in Manila, Philippines on 13 October 2014 was forced to exclaim in response to the ongoing Ebola crisis in West Africa, “Globalization has made our lives richer in many ways; now it presents us with the horrors of the poor, and prods us, for our own safety as much as for our conscience, to respond with all our expertise and courage.” The strife around the world has its roots in inequality and lop-sided capitalistic development that has left a huge proportion of the population way behind in development. An equitable and inclusive development is the only sustainable way forward. This is an historic opportunity to correct a widely prevalent undesirable corporate practices.
4. The next generation of leaders will be more socially concerned and committed as employers, consumers and investors : Your comments please
I am very encouraged by the increasing proportion of young people around the world today that are seeking money and meaning together in their career options. I had the opportunity to lead a fellowship program for youth from around the world. Hundreds of young graduates decided to forego lucrative opportunities at Microsoft or Oracles of the world and decided to take up one year of fellowship program to work with a social enterprise in India for a sustainable living stipend only. They were seeking business solutions to social and environmental problems
5. Principles of Responsible Investing: has a commitment of over 20 Trillion USD, will this affect Indian companies? And how?
Responsible investment comes in various shapes and forms. Called variously as impact investment or sustainable investment or fair trade and so on, it basically says that purely financials driven capitalism or charity on the other extreme are failed concepts as far as inclusive and sustainable development is concerned. With increasing momentum in responsible investing, if the Indian companies do not change their behavior and become more responsible, the market forces will punish them in times to come
6. Sustainable development demands a change in processes, policies and products of a company: is this an opportunity or a threat for Indian corporates?
Any change brings with it an inertia and also risks. Slowly, but steadily the world is moving towards accountability and consumers are demanding citizenry of the corporate. So, I feel it is a huge opportunity for companies. The 2% CSR regime provides an easy way for organizations to meet their social obligations while they learn to learn the ropes to institutionalise sustainable business practices as the new normal.
7. What opportunities do you see for education institutes in the growing field of CSR and Sustainability
The market forces and the growing body of sustainability thinkers in both investors and consumers category will make sure the top management of the companies realize the importance of sustainability and CSR. But, the educational institutions have a big role to play in producing employees, workers and thinkers for tomorrow that understand the need for good citizenry and inclusive development practices for a happy, equitable, humane and progressive nation.
a. As in knowledge management, consulting and policy development
Large number of corporates do not know or do not have internal capabilities on meeting the new CSR regime commitments. They will need reputable partners in not only developing internal policies and systems but hand holding as well. This represents a valuable business and nation building opportunity for educational institutes.
b. Developing new programs
Tremendous capacity building opportunities will be thrown up for top, middle and lower level staff in organizations. Also, the marketplace will see some unscrupulous entities joining the bandwagon. This is where a leadership opportunity presents itself for an organisation to set the standards, come up with benchmarks, certifications etc and CASI has taken the lead in this direction.
8. “Companies that create employee-driven CSR programs help workers feel a sense of greater purpose; helps attract and retain top talent; and provide strong platforms for employee leadership and development. In today’s world, employee volunteer programs are an essential component of a company’s CSR approach, one which unquestionably benefits employees, the community and the company.”
a. What is your opinion on the same? Please give a descriptive answer
Community orientation of mindset of talented staff is a widespread reality. People are not no longer driven by money, they are also seeking meaning in their work. Organisations that will make room for volunteering, community activities and initiatives that are beyond straight sales targets will help them retain the talent. It is common sight today that people are resigning well-paying jobs and starting an NGO or farming venture. If organisations think of a creative way of combining the professional talent with an opportunity for their passion, it will mean a win-win-win outcome for the individual, the organisation and the community.
9. In your opinion,
a. What is the opportunity for CASI in India?
CASI can set standards, bring global best and next practices to India, build capacities at all levels and help put to proper use the opportunity of the new CSR regime. Otherwise, the opportunity can very easily be wasted by clever intermediaries helping organisations meeting just the letter but not the spirit of the Act.
b. Being a Global Brand, CASI has a terrific reach, which strata of the society do you think we should reach out to further?
The daily unearthing of scams on one end and the social strife around the world and especially in India, are symptomatic of the failure of the systems and capitalism in its current form. CSR and Sustainability thinking has the potential to stem the rot. But, as the need is for a systemic change, all stakeholders need to be addressed. In my opinion, a concerted effort broken down into short, medium and long term needs should be the CASI plan and all these have to start now. In the short term, the policy makers and top managements can be addressed, for the medium term impact, the employees and youth entering workforce need to be addressed and for the long term, the schooling system has to be addressed.
c. How do you think senior management practitioners would benefit from CASI certifications?
In my opinion, more than certificates at this level, the capacity building on how to create impact that ultimately benefits the organizations and its stakeholders is of greater value. Certificates are more important for those entering works force.
10. CASI works with academicians in consulting assignments, please give your comments on how do we make this a continuous and improvised process
There are academicians and there are academicians. The new space requires early champions who are more than just capable of using the right buzz words. So, I would suggest a core committee of true CSR and Sustainability champions select and train and unleash an army of champions to spread the cause. Breaking down the whole ecosystem into building blocks and setting the process of getting these building blocks right will be key and then the whole will take care of itself. If not, it will al crumble.
11. What is the business case for CSR? Is it the same in developed economies as in emerging markets? Would you please describe a specific environmental, social or governance issue from a business case for CSR perspective, comparing and contrasting the business case for CSR perspective of the specific issue in a developed economy and in an emerging market
The whole value investment movement, or fair trade movement portends to which direction the consumer is moving in. Yes, in a developing economy where it is generally a sellers’ market, organizations can survive on borrowed time, but as the economy moves towards being developed, business case for CSR becomes clearer.
12. Please describe a CSR activity you have been involved in
I have been in social enterprise space for over many years now. At CII, I was leading the New Ventures India initiative, which identified scalable enterprises involved in sustainable businesses throughout India were selected, mentored and facilitated for funding. And this funding generally came from impact investors and value investors. I am currently with international agricultural research for development organisation called ICRISAT and most of our activities are funded by corporate CSR.
13. Please describe how your company or a company you are closely aware uses the concept of sustainable development to create better products or services
An inclusive development and a market driven development together form what I call really sustainable development. If a development is not inclusive, it will lead to haves and havenots leading to social strife as seen today. If it is not market driven, then it will not last. I lead a program called Inclusive Market Oriented Development (IMOD) at ICRISAT which bring together the concepts of inclusiveness and market orientation in all our activities so the impact is greater.
14. Any word of advice for Management Students….
The employers of tomorrow will be looking for technically proficient and socially aware employees. The graduates who can think sustainable business solutions to the social and environmental problems facing the world, will find themselves in high demand.