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Why CSR Is As Vital To A Company As Sales Or Marketing

29/05/2016 12:59 AM IST | Updated 15/07/2016 8:27 AM IST
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This happened 10 years ago when I was heading corporate communications for a company, and CSR or Corporate Social Responsibility was slowly attempting to penetrate our plans. The CEO said, "We need to project the company as environment friendly." The suggestions that followed included giving away hundreds of saplings during events and on World Environment Day. One of the apprehensions that I was brave enough to voice was about sticking to this plan year after year, instead of abandoning it as unviable after a couple of attempts. I said, "CSR isn't just about a willingness to give. It is all about making sure that we do it year after year. It is all about choosing the right social media platforms to communicate adequate information about these efforts." I added later, "Don't play with CSR."

Many critics have noted that CSR tends to be a secondary activity where most companies search for areas where simple funding will suffice.

I informed the panel that the country was struggling with multiple challenges, including unemployment, an ever-increasing population and little access to basic needs such as water, sanitation, education, health services, gender equality, and more. At that point of time, CSR in India was a buzzword that was just beginning to find its way to medium and smaller sized companies. Laws to give CSR initiatives direction were not yet formed.

It was years later that things started moving at a clipping pace... and I must say that a lot of companies today take this responsibility seriously. It was in August 2013 that the Indian Parliament passed the Indian Companies Act, 2013, replacing the Companies Act of 1956. The amendment of 1 April, 2014 is all about the imposition of compulsory CSR obligations upon Indian companies as well as foreign organizations operating in India. The law states that companies with a net worth of at least ₹5 billion or a turnover of at least ₹10 billion or net profits of at least ₹50 million need to be active in their CSR efforts. To make things clear, the law stipulates that "no less than 2% of its average net profit for its preceding three financial years" must be spent on CSR activities. The law in force also states that all CSR funds must be spent in India.

CSR needs to evolve -- from being detached from the battlefield called sales, it must become one of the platoons deployed in action.

Let me mention the case of Credit Sudhaar, a leading credit health management company. Their CSR team started out with modest initiatives, and just in January this year, they were doing things like distributing sewing machines to farmers' families in Wardha district of Maharashtra. I am writing about them because they have now graduated to bigger CSR plans and this needs to be talked about. Their latest attempt is "aimed at improving the educational infrastructure in the country's rural areas, a requirement that is central to the growth for any community". The epicentre of this initiative - to digitize rural schools -- is Pimpri, located in Yavatmal district of Maharashtra. What is worth noting is that the population of this village does not exceed 500 individuals, and a significant chunk of the population - more than 15% -- comprises children between the ages of 0 to 6 years. Most people are literate, but the company identified the need for computers, printers, and projectors. This was done in presence of the village sarpanch, village head, the school management committee (comprising school parents) teachers and students on 11 May 2016.

CSR needs to be viewed as a philanthropic step that has the potential to raise the overall equity of a brand -- which is what everyone wants.

What is important in this case is the focus on identifying a real need. Many critics have noted that CSR tends to be a secondary activity where most companies search for areas where simple funding will suffice. I think that, ideally, the company should adopt the entire village and initiate activities that lead to cleanliness, adequate water and electricity, the construction of more toilets, and means for conflict-resolution at a village level. What matters are activities that have the potential to generate meaningful employment for the locals, and an interaction with the social matrix so that social harmony and economic prosperity put an end to the exodus to towns and cities. A worthy beginning has been made with this initiative, but while digital literacy is essential it is not the end of all woes.

The truth is that more companies need to step out of easier CSR initiatives that are focused on the urban poor and try and make our villages self-sufficient and attractive enough for their inhabitants to stay on. Developed villages are what are going to give India the strength it needs to step out of its "developing nation" profile.

In this age of increased internet penetration... the role of CSR is as vital as whatever the sales and marketing guys happen to be doing.

Everyone who holds a business card is inextricably a part of marketing and CSR cannot stay aloof. The sad truth is that CSR targets are considered to be a necessary evil to be adopted because the babus in the government may not like it to be otherwise. Not many, barring sales teams, trudge along with the responsibility of targets and some try to hide behind softer jargon such as "brand-building". But sales targets and brand-building work in tandem and evolve only when the entire organization shares accountability. CSR needs to evolve -- from being detached from the battlefield called sales, it must become one of the platoons deployed in action. After all, everyone wears the same fatigues and everyone advances or retreats together.

CSR, however, cannot be dismissed as a mere farce. As I said, it needs to be deployed in action and also be eligible for the same bravery awards, so to say. This part of the organizational strategic plan is not about charity alone... in fact, there is no charity anywhere. CSR needs to be viewed as a philanthropic step that has the potential to raise the overall equity of a brand -- which is what everyone wants. CSR is not a one-off activity that one does and steps away... the tempo is built over a period of time and the sustained effort is what pays dividends. In this age of increased internet penetration and the rise of myriad social media platforms, the role of CSR is as vital as whatever the sales and marketing guys happen to be doing.

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