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We first met with Outsized a few months ago. Apart from being a great bunch of people, we instantly believed in their mission – to bring together the best boutique consultants in a way that enables large companies to access unique talent and expertise that they might otherwise struggle to access. Of course we have massive respect for the big consulting firms, there’s no competing with them on research capacity and pure scale of abilities. But there’s a certain value that comes from working with boutique consultancies who can offer high-level expertise in a specific field, a fresh perspective for every client, and plenty of face time with directors and founders.
The problem for companies in hiring a boutique consultancy is finding the right one for their needs and being able to blindly trust in its ability to deliver. That’s where Outsized comes in – by working personally with hundreds of small consultancies and undertaking background checks on previous clients and projects, they are able to offer a suite of pre-vetted options to large clients, specialising in financial services.
We love a bit of innovation and were quick to work out how we could collaborate with the Outsized team. Our founder Laura wrote this piece for their thought-leadership forum in July and we are excited to announce the launch of a bespoke service product in the CSR space. Called “Right Track”, it’s designed for clients who currently don’t have a holistic CSR vision, or want to align their CSR activities more tightly with business objectives.
You can read all about the new “Right Track” service product here.
By Sanya Arora
Sanya is studying Fashion Marketing at the Pearl Academy and is interning with DOT for the summer. Though the primary focus of her internship is on ethical fashion, she is interested in exploring the power of brand to create positive social change. Some great campaigns by great companies!
As consumers have started becoming more aware of the inequities around them, a lot of brands and companies are putting social and environmental sustainability at the heart of their business. They are standing up for something bigger, something good, something which entails more attention than just products and services. This rise in socially conscious consumers has made it essential for brands to nurture an emotional relationship with their customers by championing a cause. Here are some of the best.
Vistara & Salaam Baalak Trust - #FlyTheNewFeeling
Vistara airlines collaborated with a NGO called ‘Salaam Baalak Trust’ which supports street children in Delhi and Mumbai. The airlines invited 12 kids from the NGO to be part of their very first flight. The complete joy of flying for the first time was captured and made into a short film titled ‘Fly the new feeling’. The brand not just marked their new journey but also fulfilled the dreams of 12 kids while connecting with its audience with a promise of ‘Fly the new feeling’. You can watch the film here
Ching’s Secret & Akshay Patra Foundation - ‘India Ke Hunger Ki Bajao’
The premium Chinese brand Ching’s Secret partnered with Akshay Patra Foundation, a non-profit organisation providing mid-Day meals to 1.5 million children in India every year. The aim of the campaign ‘India Ke Hunger Ki Bajao’ is to feed 1 million children across India. The brand has given an actionable voice with the help of its brand ambassador Ranveer Singh who drives this CSR campaign. Ching's strongly feels that by positively contributing to the community with this initiative, they will drive nation towards better future and progress. You can watch the film here.
Paper Boat & Parivaar Ashram #FloatABoat
A beverage brand, Paper Boat, teamed up with Parivaar, a humanitarian service organization, with the vision of improving the life of less fortunate children. Together they rolled out a campaign, ‘Float A Boat’, an initiative which involved making a paper boat, uploading a picture on their website or social media with a hashtag #FloatABoat. For every uploaded picture, the brand donated Rs 20 for children's education. The campaign helped the brand build on its proposition of ‘Drinks & Memories’. You can watch the film here
Dabur’s Sani Fresh - ‘700se7Kadam’
Dabur India for its toilet cleaner brand Sani Fresh, took out a campaign called ‘700se7kadam’ with a motive of taking steps towards creating better sanitation facilities for rural women in tier 2 and tier 3 cities. The campaign featured stories of many rural women in India who walk a great distance to relieve themselves and put their life and dignity at risk. The brand invited all its customers to support the campaign by creating a buzz on social media. For the sale of every product, the brand contributed Re. 1 towards building toilets with a hope to reduce the distance traveled by these women, from 700 steps to only 7 steps. You can watch the film here
Lenovo & YUWA - #PitchToHer
Lenovo in partnership with YUWA, a non-profit organisation that imparts football training to young girls, launched a campaign called ‘Pitch To Her’. The idea was to invite young minds to pitch innovative ideas that can impact the life of girls at YUWA through technology. The most convincing idea was awarded with a month long internship at the YUWA campus. In this way the brand helped the young girls at YUWA to experience the wonders of technology, pushing them towards a smarter and better world. You can watch the film here
Nivea India & Aseema Charitable Trust - ‘Mom’s Touch’
A skin care brand, Nivea, launched a social campaign in association with Aseema Charitable Trust, an organisation that works towards providing education to children from marginalised communities. The campaign touched millions of hearts by depicting stories of extraordinary mothers who go out of their way to make their children’s future secure. The first leg of the campaign was done in municipal schools of Mumbai, where mothers of students with 100% attendance were given 3 months ration as an acknowledgment to their efforts. This helped the brand to build a right image of ‘love and care’ with its customers. You can watch the film here
Lifebuoy- ‘Help A Child Reach Five’
Hindustan Unilever’s soap brand, Lifebuoy, created a unique social campaign to spread awareness about the facts on death of children under 5 due to infections like diarrhoea. This social initiative was done in Thesgora, an Indian village with various hygiene and handwashing education programmes. The campaign titled ‘Help A Child Reach 5’ showed positive impact on handwashing behaviour and health of the people living in that village. Since then the brand has become more ‘preferred’ among its audience. You can watch the film here
We are looking for a smart problem solver who’s excited about using research and data to create social programmes. The role would involve supporting our team of consultants by undertaking desk-based research to feed great knowledge and insights into our projects within affordable housing, ethical manufacturing, and road safety.
You’d be a critical part of the team, your findings would underpin all of our projects and you’d need to be ready to bring your own ideas to the table. You’d also be asked to assist with research for new client meetings, as well as assist with some project implementation.
Currently this is a short-term role with the potential to become a permanent junior consultant.
Initially a three-month role from August to October
Compensation will be discussed with short-listed candidates
Full-time, 9.30-6pm, Monday to Friday with additional time as required Graduate with up to two years of experience
To apply, write to us at firstname.lastname@example.org, with your CV, a cover letter explaining why you are the right person for the job, and answers to the following questions to give us some insight into how awesome you are!
What experience do you have in research and finding insights?
Why would you be interested in working for a consultancy that creates social impact through business?
If you had to create a plan to tackle road safety in India tell us the first three things you would try to find out?
By Gauri Sharma
Innovative CSR & sustainability managers are raising the bar of “traditional” corporate responsibility by leveraging it to solve pressing business problems, deriving business value while advancing the company’s sustainability performance. Employee engagement – which is vital to building a successful, future-facing company – is one such critical business challenge sustainability managers are learning to address. Good employee engagement strategies have been proven to lower attrition and absenteeism, and improve productivity, efficiency and work quality – creating an energy and reputation that attracts the best, innovative talent.
Now more than ever, it’s imperative to crack the challenge of disengaged employees. India will become the youngest country in the world by 2021, with 64% of its population in the working age group of 20-35, meaning that millennials will constitute the majority of a company’s workforce. Research shows millennials to be more socially conscious than any generation before, looking to work in companies that have a purpose beyond profit and where they can have meaningful impact.
Smart companies and sustainability managers are tapping into this trend by engaging their employees in their social and environmental purpose. It’s great to see how some companies are changing the game by crafting cutting-edge sustainability engagement programmes to make the business more responsible while creating a more engaged, productive and conscious workforce. Here are some of the best.
1. Dashboards – measure and amplify “doing good”
Innovative and easily-accessible dashboards are increasingly being used to spur and measure employee participation in sustainability initiatives. AT&T has been at forefront of this with its voluntary, company-wide portal called Do One Thing (DOT) which encourages employees to commit to regular, measurable actions that positively impact their communities, themselves and the company. From small initiatives such as recycling to edgy initiatives like developing sustainable technologies – AT&T has enabled it all by bringing engaging dashboards for sustainability.
2. Gamification – make sustainability fun
Companies are intelligently applying game techniques to motivate employees to opt for more sustainable practices, fast-tracking their overall sustainability improvements. In 2014, Sony Electronics (SEL) created an online Green Workspace Certification to encourage its employees to adopt more sustainable practices and engage in Sony Group’s larger goal of achieving a zero environmental footprint by 2050. SEL essentially turned sustainability into a fun game with a live stream of projects, team rankings and progress tracking, and divided the certification into four levels: Seed, Leaf, Tree, and Forest.
3. Green appraisal – integrate performance and sustainability
By adding a sustainability criteria to performance evaluation, companies are incentivizing employees to become change makers and actively participate in their sustainability agenda. To achieve its target of 100% employee engagement in CSR & Sustainability by 2020, Campbell Soup Co. assesses every employee’s performance on the basis of contribution to the company’s CSR and sustainability practices and goals. It has also integrated sustainability metrics into its executive compensation calculation. Similarly, in 2008, Intel made a bold move by linking a portion of executive and employee compensation to the achievement of the company’s corporate responsibility metrics.
4. Hackathons – disrupt the sustainability status quo
Hackathons have proven to be a great tool to crack business challenges. Dynamic companies are cross-utilizing them in sustainability by rallying employees to hack and pitch cutting-edge ideas that add social and environmental value to the business. 3M’s Innovation Power Pitch for Sustainability called on its employees across the world to pitch innovative ideas around potential sustainable products. The winning idea was given a research grant bring this product to life. The ever-inspiring Etsy, organized a Hack Day – bringing together 150 team members who came up with 22 ideas ranging from increasing women in leadership roles to a programme that tracks the company’s carbon footprint.
5. Volunteering 2.0 – utilise expertise for good
Companies are crafting smart and more effective employee volunteering strategies that leverage their employees’ knowledge and skill set for good. As a part of Godrej’s volunteering program, its employees capacity-build NGOs and work collaboratively with them to create long-term sustainable models. Pfizer’s Global Health Fellows program enables its employees to work with NGOs in developing countries for up to 6 months, addressing healthcare challenges in under-served communities. Skills-based volunteering not only deepens employee engagement, but also develops leadership, soft skills and professional expertise.
6. Conscious consumption – inspire positive change
Through exciting internal sustainability campaigns and offerings, companies are inspiring positive changes in their employees’ lifestyles. During World Water Week in 2012, Levis’ held a Go Water<Less Challenge asking its employees around the world to wear the same unwashed pair of jeans the entire week. By encouraging employees and even consumers to reduce their environmental footprint by using less water, Levis’ created significant buzz and also brought attention to its Water<Less collection. In 2011 SAP developed TwoGo a cloud-based carpooling app for its employees to reduce its carbon footprint and costs. In 2013, this app was launched externally, enabling other companies to leverage the same benefits. Very recently, Tata Consultancy Services (TCS), put up a message in their Bangalore office canteen, with an aim to cut down individual food shortage – “Take all you can eat, but eat all you can take”, tying into TCS’s overall waste reduction policy.
Progressive companies and sustainability managers around the world are aligning and integrating their CSR and sustainability vision with their employee engagement strategies. The result is that critical business challenges are being addressed as the business becomes more socially, environmentally and economically sustainable. It’s becoming increasingly evident that commitment to sustainability and CSR is no longer nice-to-have, but actually a great core business strategy.
Gauri Sharma is a Consultant at Do One Thing, a strategy and communications consultancy, driving responsible business in India.
This article was originally published on 25th May 2016 in The CSR Journal
Our Founder & MD, Laura Quinn, wrote a great opinion piece in the The CSR Journal, titled "Philanthropy To Purpose: India Inc. Is Finding Its Socially Responsible Feet".
The article describes India Inc's journey from corporate & family-led philanthropy, to the introduction of the CSR legislation and how that led to systems and processes being put in place to manage CSR compliance. After two years of the legislation, we are now seeing a surprising but truly encouraging trend - Indian companies integrating "purpose" at the core of the business strategies. Read the full article here
"It was obvious to me that I’d found my passion—and my next professional challenge—so I took the leap and decided to turn that passion into a business. Do One Thing is now over four years old. We’re a consultancy in Delhi that helps great companies find their purpose – through brand positioning, CSR, employee engagement, and communications – enabling them to drive financial value and social impact at the same time."
By Anant Shrivastava
It’s been an exciting couple of months with significant buzz in the world of CSR and sustainability. DOT brings you news from India and beyond with articles ranging from recommended changes to the Companies Act, benefits of impact investing and creating shared value to how luxury brands stepping up their CSR game. It’s becoming increasingly evident that strategic and well-integrated CSR is the way forward and is no longer a nice-to-have!
CLC recommends changes in Section 135 of the Companies Act
The Companies Law Committee (CLC) setup in 2015 to make recommendations to the govt. on issues arising from implementation of the Companies Act, 2013, has recommended several changes to the Act, including Section 135 of the Act pertaining to CSR. Recommendations on CSR have been made after considering the suggestions contained in the High Level Committee on CSR report that came out in October 2015. The complete CLC report can be found here. Recommendations have been made around the following points:
- Information on annual disclosure of companies around CSR should be compiled by MCA and made available in public domain
- The govt. should play no role in monitoring CSR implemented by companies and it will be the companies’ responsibility to systematically monitor their CSR activities
- Composition of CSR committee for companies not required to have independent directors should be prescribed as ‘having two or more directors’
- Clarity on computing net profits for determining whether a company qualifies for mandatory CSR spend
- Specific inclusion of requirement of foreign companies to comply with the CSR obligation
- Areas for CSR listed under Schedule VII to be interpreted as ‘subjects’ rather than specific activities – allowing companies to interpret them liberally
- No carry forward of unspent CSR fund to the next year
- Companies, including PSUs, to be given flexibility for some years to experience the implementation of mandatory CSR before any steps on unspent funds are taken
- Section 8 ‘not for profit’ companies should also implement CSR activities if they cross the financial threshold specified in the Act
The next steps will likely involve these recommendations being presented in the parliament in the form of a bill which could either be passed or rejected.
While some of the above recommendations are indeed helpful for companies in terms of ease of understanding the Act and implementation of CSR activities, this report missed any suggestion on a crucial issue – tax treatment of CSR activities. It’s high time the govt. provided clarity on the same as companies seem to be struggling to understand tax implications of CSR spends in various areas. A uniform tax treatment can prove to be really useful and prohibit a bias for activities that allow more tax benefits than others.
Leveraging social media for effective CSR communication
Social media is ubiquitous. People, companies, even governments use it in some way to communicate. Businesses have been using the power of social media to reach out to all their stakeholders but, according to a study, social media is heavily underused for communicating the social good done by companies. This Economic Times blog explores how firms can utilise social media to effectively communicate about their CSR and the numerous benefits it has to offer. Social media is a powerful but fast evolving tool and companies will need to build expertise if they wish to use it as a communications medium for CSR.
Going beyond CSR – creating shared value
Even though companies are embracing CSR and ensuring they undertake efforts that benefit society and/or the environment, CSR is still viewed as something that’s extra to the business. We’ve stressed before that CSR is beneficial for both the communities and businesses and plenty of studies exist to support that. Maybe, what’s needed to emphasise the point is looking at social responsibility from a different angle. This article, co-authored by one of the co-founders of the Shared Value Initiative India, attempts to do that. Shared value is an essential concept for businesses where they operate with the aim of creating a more equitable world, maximising shareholders’ wealth in the process. The initiative has seen some success in bringing together companies, government, and civil society organisations to adopt and share practices that allow creation of shared value through business. We hope more business leaders are listening and will work to align their firms in this direction.
A short refresher on what makes a good CSR programme
Every few months, we try to highlight articles that show what constitutes an effective CSR initiative. This article by Paroma Roy Chaudhary succinctly captures the essential components of CSR that benefit both the community and the business – alignment with business, brand impact, local relevance, robust monitoring and evaluation, and professional management. Perhaps the one vital component missing is effective communications around CSR. We’ll continue to provide such refreshers in the hope that more companies take note and do good by doing it well!
Impact investing – Need of the hour for India?
Impact investing is often mixed up with philanthropy, CSR, and other similar sounding terms. As a result, its true meaning is often lost. This article defines it from an academic viewpoint and goes on to discuss its benefits especially in the Indian context. Impact investing in microfinance has already benefited millions in India and has provided significant returns to investors. Being a tried and tested model in India’s developing economy, it is high time that companies and individuals focus their attention on it. This could be the answer to the currently limiting CSR legislation because it provides opportunities for innovation in the development space while giving social and financial returns.
Good news – More companies view CSR as a strategic process!
Findings from a survey conducted by FICCI show that an increasing number of companies consider CSR to be a strategic decision making process in the business. Around 150 companies participated in the survey which captured responses on management involvement in CSR, implementation and monitoring of CSR activities, clarity of Section 135 etc. It’s heartening to see companies making efforts in understanding and complying with the Act. However, companies also raised some concerns in terms of clarity of the Act (especially tax related regulations), finding credible NGOs, lack of CSR professionals to manage implementation etc. It’s clear that a collaborative effort by the govt. and corporate sector is needed to mitigate these issues and allow ease of planning, executing, and monitoring of CSR.
Are luxury brands doing their bit of social good?
Although a number of luxury brands across the world have been involved in social initiatives, they’re not synonymous with CSR to an extent that some other sectors are. The luxury sector has so far taken a very traditional approach to benefiting the community, mostly through charity. Strategic CSR is yet to be largely taken up. This may be changing. This article talks about the work that’s being done by brands such as Louis Vuitton, Gucci, and Chopard and while it may not exactly be “strategic CSR”, these brands are going beyond philanthropy and thinking of long-term social initiatives. A good move considering any business that works with customers who are socially conscious and judge companies on their social footprint stands to only gain through social responsibility initiatives!
CSR and sustainability as tools for attracting investment
Indian companies stand to gain in another area through robust CSR and sustainability initiatives – fund raising. This article by Singapore based investment consultancy CSR Works mentions that Indian companies need to step up their CSR disclosures and sustainability reporting if they need to tap in to the $21.4 trillion pool of Socially Responsible Investment (SRI) funds. Sometime back, we’d written about the poor quality of CSR and sustainability reporting by Indian companies and this news highlights how companies are missing out on investments as a result of it. Will firms take up this issue soon? We can only wish as we wait and watch.
Analysing the spend
Since April 2014, India's largest companies have been mandated to spend two percent of their average profit from the last three years on social development activities.
Final reports of the first year of mandatory CSR spending (FY 14-15) came in last summer and the Energy industry (Oil, Gas and Power) had the highest CSR spend obligation at INR 2181 crore. Additionally, ONGC, an O&G public sector company, had the second-largest CSR spend in India with INR 495 crore (the largest being from Reliance Industries). Thus, the sector has a huge impact on shaping CSR as whole in India. DOT works closely with British Gas (BG) India on their social investment and thus, we have a keen interest in understanding trends within the sector. We conducted a study on the Oil & Gas (O&G) Industry’s first year of CSR spend, with a focus on 12 of the top O&G companies in India.
Missed two percent but not by far
On average, the O&G industry spent 1.5% (INR 972.9 crore)* of its net profits on CSR, slightly missing its two percent target of INR 1296.7*. Three O&G companies (India Oil, HPCL and BG India) spent their exact CSR budget whereas Oil India exceeded its budget by 36%. Given the magnitude of funds the sector was obligated to spend, it was a great start, and a clear indication that companies are committed to CSR.
Some observed trends
Within the O&G sector, several key trends emerged regarding how their CSR budgets were spent, much of it in line with India’s top companies across industries.
- Most O&G companies invested in at least one large project aligned with government initiatives, especially Swachh Bharat and Skill India. This gave companies a strong direction, reputational benefit and a good social license to operate driver. However, spending large sums of money on government initiatives under CSR doesn’t seem to be in the true spirit of the law as it shifts accountability of money’s impact from the company to the govt.
- About 90 percent of the CSR expenditure was in four of the ten spend areas of Schedule VII: Education and Vocational Skills; Hunger, Poverty, Healthcare and Sanitation; Environmental Sustainability; and, Rural Development. This made sense since these are the most basic provisions and broadest categories on the list, but also meant investments in tech incubators, sports development, and reducing inequalities were disproportionately low.
- Roughly 60% of the O&G sector’s CSR budget was through implementation agencies rather than direct implementation of CSR activities, working with credible and transparent NGOs and organisations on large projects.
- However, O&G Companies deployed a greater number of projects locally around their areas of operation, meeting the needs of panchayats and local communities. Activities tended to be ad-hoc rather than strategic, focused on driving license to operate in areas of operation. Although some are worthwhile on a small scale it’s questionable whether some are truly compliant with Section 135.
- Overall, the CSR focus of O&G companies leaned towards social development rather than environmental sustainability as the latter tends to be integrated within business operations and covered separately in sustainability strategies and reports.
- Of the companies that didn’t meet their two percent target, many indicated their reasons for underspend were to on-board expertise and focus on creating strategic projects that will have a larger impact on society.
Going beyond compliance
Compliance-wise, FY 2014-15 has definitely been a good start for CSR in India. However, mere compliance doesn’t necessarily make for good quality CSR. On the one hand, it forces companies to spend hurriedly and focus on spend instead of impact. This was clear in some reports where companies clearly interpreted the law liberally, investing their CSR funds in ad hoc or misaligned projects like horse shows or parades.
At the same time, it was evident that companies were struggling to create innovative, long-term, impactful projects for their CSR spend. As such, we hope that in the coming years, the sector will focus on a more strategic approach that will deliver enduring benefits for communities.
Suggestions for improvement
More innovation: There is a great need for companies to create systemic change in the way development is done, rather than simply supporting the programmes that already exist. By combining monetary contribution with the skills and technologies at their disposal, O&G companies can enhance their social impact. For example, apart from spending on building and running vocational centres, companies can also channel their knowledge to come up with standardized mechanisms for impact measurement of these centres – monitoring enrollment, attendance, absenteeism, placement and quality of training. Such innovations can also be scaled across industries, multiplying the impact of the initial CSR investment.
Increased collaboration: There is significant similarity in the social investment initiatives being taken up by the O&G companies. By pooling their expertise and CSR funds, O&G companies can collectively work on more innovative and strategic interventions, potentially resulting in an industry-wide coalition to ensure high impact of the CSR funds in the O&G industry. For example, in 2013, Europe’s fruit juice industry launched the Fruit Juice CSR Platform with the aim of integrating CSR across complex supply chains via a collaborative sector-wide approach.
Beyond mere alignment with government initiatives: Considering a significant number of O&G companies are public sector enterprises, aligning with government initiatives such as Swachh Bharat and Skill India is in-line with expectations. However, if companies go beyond mere fund allocation and work with the government to identify specific gaps that can be filled by CSR funds, the O&G industry’s CSR investment could have a larger, nation-wide impact. For example, companies have spent a significant sum of money on construction of toilets under Swachh Bharat, whereas there is a dire need for investment and expertise in other aspects of Swachh Bharat such as, implementing waste management programs and reforming open-defecation behavioural patterns.
(*Aggregated on the basis of secondary data from the 12 O&G companies in India)
By Anant Shrivastava
BSE CSR platform ‘Samman’ to launch finally?
According to this Hindu article, the platform which has been talked about since April 2015 and aims to connect companies with NGOs to facilitate both parties in undertaking social activities using CSR funding will go live before the end of this year. It will certainly be useful for companies to find credible, transparent organizations and programmes of interest to be funded. However, NGOs that cannot/do not get themselves listed on the platform stand at a risk of not being funded. We hope companies are open-minded while looking for programmes to fund and don’t limit themselves to just the thousand or so organisations that will be listed on Samman.
Companies Act may be amended for clarity on CSR norms
Based on the recommendations submitted by the Government appointed Baijal Committee in September, certain rules as well as the Act could be changed to allow greater transparency around CSR spending. The panel is expected to submit the final report to the MCA in December. Changes are expected to provide greater clarity on many ambiguous areas of the CSR rules including the differential tax treatment of various forms of CSR expenditure as mentioned in this Business-Standard article. In the present scenario where the rules are vague in places and left open to interpretation, such an amendment should prove to be beneficial for all stakeholders in the game.
India ranks no.1 on CSR reporting (but there’s more to it in the fine print..)
India tops the world in CSR reporting with 100% of its top 100 companies reporting on their CSR initiatives. While this is good news, it is hardly surprising given that the government mandates companies above a certain size to report on CSR activities. What is worrying though is the quality of reporting – something where India lags behind many countries. According to this Livemint article, it’s clear that corporate India still has a long way to go before it starts to produce high quality responsibility reporting especially issues such as carbon emissions. Perhaps decisions taken in the ongoing CoP 21 in Paris will distill down to corporate India and make them realize the importance of accurate and high quality sustainability reporting. Only time will tell.
State govt. requests CSR funds for tribal development
Maharashtra CM Devendra Fadnavis requested corporates to utilize CSR funds for the benefit of the tribal population of Maharashtra. This is a good example of government identifying the challenges that can then be addressed by corporate India through CSR funding. However we’ve stressed this before and would like to say this again – participation in such govt. led initiatives should be voluntary and unwillingness on companies’ part to contribute for such initiatives should not come at a cost or penalization in any way.
Transparency for CSR funds should be a two way street
Companies often go to great lengths to ensure that the NGO partners they work with are transparent, ethical, and corruption free organisations. This involves a rigorous due diligence process and rightly so as there are many NGOs that are corrupt and end up utilising CSR funds for vested interests. But shouldn’t the companies be transparent as well when it comes to their expectations from NGOs, processes for grant giving etc. to help NGOs apply for funding? This article written by the development director of a hospital describes the tedious and unnecessary process NGOs often have to go through to just gather information about available corporate funding. We feel that just as NGOs need to step up their game and become professional in order to secure funding, companies also need to structure their grant giving mechanisms efficiently to benefit the NGOs and ultimately the society in the most efficient way.
Mark Kramer on why a philanthropic model of CSR has limited benefits
Mark Kramer, co-founder and Managing Director of consultancy FSG, stressed in an interview the limitations of a purely philanthropic model and talks about the need for a profit-driven business model for addressing social issues. We agree entirely that, although the traditional CSR model can help to address social problems, there is a critical need to look at social issues from a business perspective. A commercial angle brings greater accountability, professionalism, and often, better resources to tackle challenges than a purely charity-based approach.
Social mission and profit are not mutually exclusive, even for startups
India is on its way to becoming a startup hub (if it’s not there already). But not many startups have a clear social mission or ‘purpose’. The reason is often that they are too busy focusing on other vital aspects of business like, well, starting up! But social consciousness can and should be a part of business strategy for start-ups from day one. Plenty of studies exist to show that a social agenda adds to long term profitability of a company. The same applies to start-ups as well. This article tells the story of how Warby Parker, an online glasses retailer, was able to derive success by being a socially responsible company from the beginning.
Tying CSR with climate change
The climate change conference in Paris in November and December, aimed at helping around 196 nations make decisions on mitigating climate change, is expected to be followed by significant policy changes at national and global levels. Implementation of such policies will come at an added cost that will be borne by multiple stakeholders including governments and the corporate sector. How can the government and companies work together to utilise the mandatory CSR spending to ensure maximum positive environmental impact? A Didar Singh, the secretary general of FICCI, provides insights in this article.
PSUs fare better than private sector in Oxfam’s IRBF 2015 index
Oxfam Foundation released the India Responsible Business Index in October that measures the BSE top 100 companies’ on voluntary disclosures and policy commitments against the National Voluntary Guidelines (NVGs). According to this index, PSUs are doing better than private sector on criteria such as non-discrimination at workplace, community development, respecting human rights and employee dignity, and involving the community as stakeholders in business. The only area where private companies fare better is instituting sustainable policies in their supply chain. We think that initiatives like this that put out such information in the public domain have an effect of motivating companies to do more on sustainability and reporting front. For complete information on IRBF, visit http://www.responsiblebiz.org/
Last week, Payal, our director of social investment, wrote a great opinion piece for Mint on the role that India Inc. can and should play in helping India reach the post-2015 Sustainable Development Goals. Market-oriented solutions, investing in innovation, skilling the workforce and closed-loop manufacturing - a good read on a Monday morning! Get the full piece here.
By Anant Srivastava
Grameen Bank founder on the need to create social businesses from CSR
Muhammad Yunus, Economist and founder of Grameen bank speaks briefly on utilising CSR funds to create and support social businesses. It is something we’ve always agreed with. For-profit social enterprises are a great way to ensure that social causes become sustainable in the long run. Presently, CSR funds can only be invested in a technology incubator at a government approved institute. The urgent need of the hour is to expand the scope of impact investing through CSR funds. We can only hope the government is listening.
Strategic CSR – using CSR to build your brand
The only way to do good CSR is to do it strategically. As companies continue to learn from their mistakes and challenges faced in the first year of mandatory CSR and realign their CSR strategies for the future, this Economic Times article provides a fresh take on an old, sound business advice of using CSR to benefit perhaps a company’s most valuable asset – its brand.
Incubators evoke little interest of corporates for CSR money
The first year of mandatory CSR spending proved to be dismal for incubators hoping for CSR funds. 85 of the top 100 companies on Bombay Stock Exchange for which data is currently available, spent just Rs 6.23 cr in total on incubators, that’s less than one percent of their total spend of Rs 6,500 cr. The reasons as mentioned in detail in this Livemint article range from lack of awareness and closed mindedness of companies on considering what counts as CSR to inadequate information on the government approved incubators that can receive CSR funding. It has to be seen if with time, companies’ understanding and perspective on CSR improves and funding incubators becomes a part of mainstream CSR.
Mandatory CSR at the cost of effectiveness and broader sustainability?
From the annual reports being filed, it’s clear that around two-thirds have complied with the government mandated CSR spending. This percentage can be expected to go up in the coming years as companies mature in their understanding of the mandate as well as their internal capacities to undertake CSR activities.
But is this happening at the cost of effectiveness of the activities being implemented? Are companies doing CSR only to comply without bothering about the actual social impact? It may be too early to tell. Thorough impact assessment of CSR initiatives can only happen 2-3 years after the implementation but it is important from the beginning that companies design and follow robust monitoring and evaluation mechanisms to assess impact.
Compliance with the law can also come at an added cost of companies losing focus of broader sustainability principles as pointed out by Shankar Venkateswaran, chief of Tata Sustainability Group, who has been a part of the drafting committee for the National Voluntary Guidelines (NVGs). In our view, this can be prevented if companies take a strategic approach to CSR and consider it as a subset of their broader sustainability practices.
MCA appointed Baijal Committee publishes recommendations on the CSR legislation
The 6 member committee headed by Anil Baijal to come with guidelines on the effective implementation of the CSR legislation as well as monitoring and evaluation of the activities has come out with its first report.
Some important recommendations made by the Committee which could be followed after the government’s approval are:
- Companies (especially smaller ones) should get leniency for the first 2-3 years in complying with the legislation
- Differential tax treatment for various activities under Schedule VII should be curbed to prevent companies forsaking societal benefit for tax saving in choosing CSR activities
- Companies that need to spend more than Rs 5 cr on CSR should take a programme based sustainable approach to CSR while companies spending less than 5 cr can take a less intensive project based approach
- Private companies like public companies should be allowed to carry forward the unspent amount to the next year to be spent in addition to a fresh spend requirement of 2% of the profit.
- Administrative overheads cap can be increased from 5% to 10% of the overall CSR spend. Also, expenditure on capacity building should not count as overhead
- Instead of a govt. vetted databank of implementation agencies, the onus of due diligence before selecting an agency should rest with the board and the CSR committee of the company. Similarly, for monitoring and evaluation of CSR activities, the boards and CSR committees should develop and follow methodologies instead of relying on the government and are free to leverage external firms if required
Hubristic CEOs less likely to spend on CSR than narcissistic CEOs
As absurd a headline as it is, it’s actually true! A study of 464 companies conducted by faculty members from premier universities including the world renowned INSEAD business school found out that hubristic (those full of self-confidence) CEOs are less likely to engage in CSR activities as they attribute the success of their firm solely to their ability and actions rather than external factors. Thus, CSR as a means of engaging and benefiting stakeholders’ just isn’t necessary for them. Narcissistic CEOs, on the end, tend to do better at CSR as they crave for external validation often fulfilled by CSR in the form of good publicity for the company and leadership. Perhaps a little narcissism isn’t all that bad...
By Laura Quinn
A confusing place to be
Imagine an annual budget of Rs. 20,000 crores managed by 80 managers, none of whom ever speak to each other. Now imagine it’s actually 8,000 managers overseeing that budget, without ever meeting or sharing a word. And turn those managers into three to five-person management committees instead of individuals. Oh and tell each of the 8,000 committees to produce and submit its own, separate annual report. Now think about analysing each of those reports individually because that’s the only way to know how the Rs. 20,000 crores was actually spent. And finally try to make sense of what was achieved, what the impact was, or what was missed out entirely.
Impossible? Correct. Welcome to the world of Indian CSR.
Since the Companies Act, 2013 came into force last April, around 8,000 companies have been mandated to spend two percent of their average net profit from the past three years on Corporate Social Responsibility, within some ambiguous yet fairly restrictive rules set out in Section 135. Estimated as a total CSR budget of around Rs. 20,000 crores per year, the opportunity is tantalisingly close to being incredible. It’s the first legislation of its type in the world - no other country has ever even attempted it - and a funding injection of this scale could represent a critical turning point for India’s development sector, which was variably estimated to have annual revenues of only Rs. 30-35,000 crores before the legislation came into effect. But this funding can only make a difference if it is managed well and directed effectively.
Unfortunately, the reality after the first year of the mandate is quite the opposite. In fact, it’s all a bit of a mess.
- In the best cases, funds are being managed by a CSR manager or team that understands the development sector. But in most, CSR falls under the remit of Corporate Communications or HR departments without the necessary skills and resource to assess NGO partners or measure impact effectively.
- Companies aren’t talking to each other meaning the same mistakes, inefficiencies and failures are getting repeated hundreds of times over from company to company.
- Grey areas in the legislation, and lack of collective experience in interpreting it, are creating a sense of risk-aversion that’s stifling innovation, boldness, and the progress of new ideas for tackling development issues.
- Those social causes which are most attractive (to employees, investors, the Government, and media) are getting a glut of funds - with the Government’s pet missions attracting inflated investments with big tax incentives.
- Tried-and-tested, grass-roots programmes with simple metrics, immediate impact on-ground, and annual funding schedules, are seen as safe options while long-term, more experimental initiatives that have the potential to be real game-changers, are seen as too risky to attract the investment they need.
Ultimately, 70 percent of companies failed to meet their spending targets within the rules of the CSR legislation in 2014-15.
An incredible opportunity
However, as messy as it seems - and it really is - companies are in fact trying. Across the board corporates are struggling with similar issues, trying to interpret the rules, looking for the best programmes to support, and broadly wanting to make a difference. And it’s critical that they do; the CSR ecosystem needs companies see the value of their social investment in order to create a virtuous circle of increasing spends for the long-term. But despite this, the CSR scenario in India right now is inefficient, old-fashioned, eager for easy wins and, perhaps most distressingly, the enemy of innovation.
These are not the qualities of great businesses, and it’s certainly not how to go about changing the world. If Indian CSR continues in the direction it went in 2014-15, India Inc. is going to waste a truly incredible opportunity to transform this great nation.
What we need is a collective strategy, and we need it now.
Let’s imagine the best-case scenario. Try to envisage the collective brainpower of India’s 8,000 most successful companies and all the skills, talent, technology and capabilities they hold. Think about efficiency; think strategy; think “lean” approaches and cloud-based monitoring systems. Think of business-based, financially-sustainable solutions that enable people to lift themselves of out poverty. Think of companies combining forces without the concerns of competition. Imagine being free to invest Rs. 20,000 cores a year in social development without the burden of the public purse. Think of all the innovation and technology that’s at the forefront of one of the world’s biggest markets being directed towards solving its greatest social problems. It's dizzying to even think about the positive impact it could have. And it’s not even that far from being possible.
It’s time to tidy up
Sorting out the CSR mess isn’t going happen overnight. But this opportunity – the first of its kind in the world - is too important to fail. So we, as the CSR “industry”, need to start tidying it up now, and not rest until we make it something to be truly proud of. And there are three simple places to start.
1. Measure and manage
Before we can even begin to figure things out we need a simple way to know what’s being spent, where, with whom, and for what (social) return. ROI is one of the basics of doing business and we must make it a basic of CSR too. A simple, customisable, low-cost, SaaS system would enable companies to measure the effectiveness of their spend, and enable a macro analysis of where money is going, what’s most impactful, and how improvements can be made. We need a Tally for CSR, simple to use and open to all.
2. Share learnings and benchmark programmes
Even after just a year of the CSR mandate, the more able companies are already reassessing their CSR investments based on learnings so far. But most companies don’t have a CSR specialist, and the job of selecting NGO partners and monitoring programmes is left to another function to manage, without past experience in social impact. Inexperienced teams aren’t sure what to look for, or even which questions to ask and the result is hundreds of companies all wasting time (and money) learning the same lessons and funding potentially inefficient programmes. By creating platforms where companies investing in the same CSR space can share best-practice, discuss failures, build on mutual ambitions and eventually pool funds, we can ensure that investment is being directed to the programmes and ideas that will prove to be most effective in the long-term.
3. Inject innovation into impact
One of the great seductions of enterprise is its demand for innovation. Finding the cracks in what’s been done before, combining disconnected ideas into something ingenious, taking leaps of faith that others say it’s foolish to even dream of, is the lifeblood of any great entrepreneur. And social development isn’t so different. But taking a leap of faith, finding an unlikely new macro-solution, or simply thinking differently, are all impossible when your brief is to stay safe and not attract any unnecessary attention. We need to build a critical mass of companies who are ready to take risks with CSR spending and apply the pioneering nature of business to their CSR strategy. If we bring smart companies and great private sector leaders together in innovating CSR and social impact, there’s almost nothing they won’t be able to achieve.
Do One Thing is an impact consultancy based in Delhi that applies strategic thinking and innovation to corporate responsibility.
Here's our topical round up of the most important CSR stories in India throughout June and July.
Two-thirds of companies miss the CSR spend targets
Apparently two-thirds of companies have failed to meet the two percent spending mandate including some surprises such as HSBC and Axis Bank. Reasons for failing to comply aren’t yet clear but here we elucidate on how issues with the legislation itself may have contributed.
But it’s not all bleak news for CSR initiatives
Even though the corporate sector on the whole failed to spend the required amount on CSR, the IT sector did quite well. The cumulative spend on CSR by TCS, Infosys, Wipro and Mahindra was almost five times its previous year’s value. Thus, not all is gloomy and we’re hopeful that as companies build their understanding of the act and recognise the needs of the social sector better in the coming years, channelising of funds in social programmes will grow as will the impact created.
Government launches ‘Skill India’ initiative, plans to use CSR funds
With talent shortage being identified as a concern across all sectors, the Government seems to be working towards a resolution. It recently launched the Skill India initiative on the World Youth Skills day (15 July). The National Skill Development Corporation plans to work with corporates on utilising CSR funds to fulfil this objective. Considering NSDC’s standardised curriculum and certification, youth trained through NSDC’s programmes stand a higher chance of gaining employment and, if implemented well, this initiative could provide companies with a talented workforce and gainful employment to possibly millions of youth across India. However, the impact of NSDC’s work on the ground and its ability to work effectively with CSR funders, still remains to be seen. We for one have tried and failed to engage with them more than once.
Ratan Tata calls for a robust monitoring mechanism for CSR spending
Tata Group’s Chairman Emeritus, Ratan Tata, called for strong need to monitor companies’ CSR spend fearing it may be wasteful or siphoned off for other purposes. We agree that compliance with the mandatory CSR spending is in its nascent stage and a robust monitoring mechanism is needed to ensure optimal utilisation of funds. Perhaps the government’s proposed platform for monitoring CSR projects will do what’s required. The six member panel in the MCA headed by Anil Baijal is expected to come out with its initial recommendations on the monitoring and evaluation of CSR programmes sometime in August as mentioned in this Economic Times article.
Regulations around FCRA may be hurting the CSR ecosystem
The Government has mandated that companies with over 50% foreign shareholding have to carry out their CSR initiatives through NGOs, trusts, or foundations that have FCRA clearance. As examined here, both the corporate and the social sector feels this limits the social good that can be brought through CSR funding. With the govt. tightening the regulations around FCRA clearance and the complexities involved in getting the clearance in the first place, this move is proving to be prohibitive than encouraging for companies to do CSR.
Gujrat to set-up CSR authority to channel CSR funds for state development
The Gujarat govt. has set up a CSR authority which will ask companies for their CSR funds so the same can be used for development across sectors where the need is highest. This could be a good thing, provided there is transparency and accountability around the use of funds and the impact created which, as we know, can be a big ask from government departments! Even though the govt. is giving corporates the option of contributing CSR funds directly to NGOs instead, could this move instil fear in companies of antagonizing the govt. if they don’t channel funds through the new authority? If that happens, there is a chance that some smaller but interesting social projects that could have benefited from CSR funding might lose out to large-scale development initiatives favoured by the government.