Identifying sustainable cause for CSR: A corporate prerogative

Sustainable CSR projects are those which have a direct link to your business. These can be measured and their output encourages companies to invest further in these social programs. For e.g. if a Company is in the business of making toys then the allied social projects could be an association of their products in the area of child development… motor functions mental acumen,instilling civic values, to an extent education. Likewise for a pharma company working on critical health issues becomes sensible and sustainable. Lifebuoy’s association with hygiene, Stayfree’s with women’s health and sanitation, Surf Excel’s with water conservation and Tata Tea with waking up came very naturally and could be continual due to their connect with the product.

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ITC’s E-chaupal is one of the finest examples of social commitment program being embedded in the business. L&T has established a Construction Skills Training Institute (CSTI), which imparts free of cost, basic training in carpentry, masonry, bar-bending, plumbing and sanitary, scaffolder and electrical wireman trades to a wide spectrum of the rural poor. Gram-IT, the rural BPO initiative by Byrraju Foundation, set up by Satyam Computers, has come a long way in providing rural unemployed youth an opportunity for a decent livelihood. Tata Steel’s collieries and mines ‘Save Forests’ campaign, a benchmark in environment management and “Green Millennium” campaign are only couple of the numerous CSR initiatives undertaken by them.

To make a meaningful start, companies could seriously consider Cause Marketing. This concept ensures that they carefully choose the subject under stipulation, build it into their business model and drive the cause together with growth of their business.

The Companies bill makes the biggest blunder of ignoring the sustainability aspect and trying to list activities which the corporates should take up to spend their mandatory 2% on CSR.

Schedule VII of the Companies Bill provides activities which may be included by companies in their CSR Policies

Activities relating to:—

(i) Eradicating extreme hunger and poverty:

(ii) Promotion of education:

(iii) Promoting gender equality and empowering women:

(iv) Reducing child mortality and improving maternal health:

(v) Combating human immunodeficiency virus, acquired immune deficiency syndrome, malaria and other diseases;

(vi) Ensuring environmental sustainability:

(vii) Employment enhancing vocational skills;

(viii) Social business projects;

(ix) Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government or the State Governments for socioeconomic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women; and

(x) Such other matters as may be prescribed.

Delving deep into these stipulations may make us wonder as to how many companies could really associate their corporate brand or their products to any of these prescribed areas. ‘Not many’ is the answer and that makes us fall in the maze of identifying the right path to deal with the much hyped CSR.

Identifying the right cause as per the sustainability norms set by international standards or just sticking to the list provided by the Government to make them happy and save our skin. Well, if it is mandatory, we might be forced to take the second route whichcould turn out to be un-sustainable and finally lead to another scam- this time ironically “THE CSR SCAM”.

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Talking of Eradicating extreme hunger and poverty, can the Ministry of Social Welfare, Ministry of Health & Family Welfare look at some fresh ideas here?? Do they have plans to address the food grains being wasted every year at the Government go-downs, due to lack of cold chains and required infrastructure?

Loopholes in the PDS system facilitate black marketing of food grains by the shopkeepers. Shouldn’t we fix these issues before asking the corporate sector to join the bandwagon? Any thoughts on how the PDS can be restructured into PPPmodel? Rather than starting afresh can the corporate sector look at adopting the PDS sector in their areas of operations?

India is one of the leading countries in the world as far as food wastage is concerned.42% of our children under 5 are underweight… this is twice the number of Sub-Saharan Africa!!

Everyday some 3000 children die on account of illness related to malnutrition and yet countless heaps of rodents infested grains rotting in the fields of Northern India. Official estimate 6million tonnes of grain worth $ 1.5billion will perish. We do not have space to store and conserve the fresh production of 19million tones this year.

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Similarly, the umpteen number of education programs have only been partially effective. Some schools have no teachers and the ones that are appointed manage to bribe somebody in the system and attend school once in a month to collect the salary. Is the Government asking the private sector to run a parallel education structure or does it want them to contribute to the dilapidated state of educational system-the guidelines and intent remain unclear. In the area of education, where we required good quality primary education on a very large scale a PPP model could be considered.

A few successful examples; UltraTech’s Vikram Cement is a successful example of a Watershed Project being implemented in a PPP mode in collaboration with the Rajiv Gandhi Watershed Mission and the Water and Irrigation Department of the Government of Madhya Pradesh. Bharti Foundation has set up senior secondary schools under PPP mode in collaboration with the Punjab Government to ensure sustainability. Maternal and Newborn Survival Initiative (MANSI) is being implemented by Tata Steel Rural Development Society in 167 villages of Jharkhand in collaboration with Department of Health & Family Welfare, Government of Jharkhand.

Asking for contribution to the PM’s fund and other such funds is strange, in an atmosphere where each individual is concerned about his hard earned tax money being laundered in variety of scams. Would companies like to take a chance with their “good cause” money?

Companies need to demand a transparent reporting system with regular update from the Ministry of Social Welfare if they were to contribute their 2% towards Prime Minister’s National Relief Fund or any other fund set up by the Central Government or the State Governments for socioeconomic development. At the very least, investment in these funds could be brought under an industry Watch Dog that can be created under the aegis of CII or FICCI.

Conclusively, as I see it the solution theme’s that can be offered by the Govt. Rather than pushing down mandatory rules and norms down the companies’ in the name of social good, the Government should

ü  Work on systems, procedures, transparency and accountability in its schemes

ü  Give Companies the levy to choose CSR activities linked to business objectives to ensure sustainability rather than prescribing a rigid list

ü  Encourage CSR in Public Private Partnership mode which will ensure priorities of the Government and efficiencies of the private sector

And last but not the least

ü  If investments are made in PMs fund and other such funds, these should be brought under an industry Watch Dog created under the ageis of CII or FICCI or any other private body…. led by the industry.

“CSR is not a replacement for the rightful role of democratic governments to set regulatory frameworks for the benefit of society”- UNIDO.

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