A few weeks back, I participated in a panel on the theme of CSR: The Way Forward at World CSR Day in India. The panel was headed up by one of the most prominent pro-CSR thought-leaders in India, Dr. Bhaskar Chatterjee, Director – General & CEO, Indian Institute of Corporate Affairs. Dr Chatterjee has a long and illustrious career, having held several positions of importance in the Indian government, and as Secretary in the Department of Public Enterprises (DPE), he led game-changing reform and change among Indian State Owned Enterprises laying special emphasis on Corporate Governance, revitalization of the MOU system, Human Resource Management, Sustainable Development and CSR.
The DPE released CSR Guidelines for Public Sector Enterprises and run workshops to assist companies in implementation, which includes an allocation of net profit of up to 5% for small companies and 2% for larger companies. Although CSR in this context refers to "CSR activities" which "may be planned in parallel to the business plan, looking at every possible opportunity to link and integrate business plans with the need based social and environmental concerns", rather than a more integrative model whereby CSR becomes the way of doing business, the heightened awareness and contribution to sustainability is important in this fast-growing economy and no doubt has a positive impact.
In the few minutes I had to present my own views on CSR: The Way Forward, I listed five key points: (you might call this The P.R.I.C.E. of CSR :-))
P is for Partnerships: The world's problems extend beyond the capabilities of any single company to solve. Supporting global or regional solutions to sustainability issues is important for businesses which wish to thrive for the long term. Partnership across sectors, and within industry sectors, offers a collective way forward which benefits companies and their stakeholders. The level of partnership activity is increasing - and this will continue.
R is for Reporting: Paul Scott, MD of CorporateRegister.com expects, after all the 2011 reports are logged, to see between 6,000 and 6,500 CSR/Sustainability Reports covering the year 2011 on a global basis. This doesn't include reports written in non-latin languages, of which there are also many (Chinese, Japanese reports etc), so, in reality, there are far more reports. Several countries are including sustainability disclosure in regulation (such as Denmark) and Stock Exchanges are starting to demand disclosure as a condition of listing (such as South Africa JEC). Reporting - business transparency - is here to stay and will become even more important as part of the way forward. While there numerous Indian companies now reporting on sustainability performance (watch out for the India Transparency Index 2012 - coming soon!), reporting as a way of life for Indian corporations will need to move into a higher gear.
I is for Integrate: CSR can no longer be a "project" based activity. It is no longer about philanthropy. CSR means creating sustainable business strategy in which CSR is embedded as part of the organizational culture and drives all activities. CSR is relating to the needs and aspirations of stakeholders and identifying business risks and opportunities in a holistic and fully integrated way. Indian business needs to make this shift as part of its way forward.
C is for Creating Shared Value: While the now ubitquitous notion of CSV is gaining ground - some say, too much ground, (see Dr Sustainability's opinion on CSV), because the concept is being diluted to mean almost anything that a corporation sells that people want to buy, CSV can offer win-win's for business and society. Kevin Moss of BT wrote an interesting piece about what CSV is and what it is not. However, CSV at its core is an outcome of integration of CSR principles into business strategy, and offers a positive prism through which to drive sustainable business practices. Take a look at the Nestle CSV case study website for practical examples.
E is (of course) for Employees: With employee engagement in sustainability having gone viral, and for good reason, corporations today must understand that CSR begins at home. Companies which invest in the compensation, safety, diversity and inclusion, wellbeing, development, environmental awareness and community involvement of their employees are winning the War for Talent, the War on Climate Change and the War for Long Term Sustainable Growth and Profit. As they win, we all benefit. CSR is not just about being good to employees; it's the development and systematic adoption of Human Resources policies and practices which lead to the transformation of corporate impacts ON employees to the sustainability impacts OF employees on all stakeholders. Read more about this at CSRforHR.com.
So that's The P.R.I.C.E of CSR. However, it's not a one-way road. A corporation that pays the P.R.I.C.E. of CSR delivers many dividends - and not only for the corporation. In fact, the P.R.I.C.E. of CSR has positive returns beyond standard investment ROI approaches. An article in Marketing Week quotes Marks and Spencer as having contributed an additional GBP 50 million to profit in 2010 as a result of Plan A, while Coca Cola made $100 million savings due to packaging reductions.
CSR: The Way Forward also includes attention to many other important aspects of doing business sustainably - such as good governance, the use of technology, especially in the race to a low-carbon economy, implications of regulation, investor demands, supply chain outsourcing, disaster and emergency relief and even the way CSR is managed in organizations. The fascinating presentations by my co-panelists and ensuing discussion highlighted many of these issues.
World CSR Day in Mumbai was a welcome opportunity to continue spreading the message. I get the feeling that with people like Dr. Baskhar Chatterjee, and Dr R.L. Bhatia, founder of World CSR Day, at the helm, India may just be finding The Way Forward.
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