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CSR is becoming mandatory for India Inc. Precisely why innovative thinking is needed if it is to work effectively
The issue of Corporate Social Responsibility (CSR) has assumed added significance in India with the Companies Bill and its groundbreaking stipulation that large companies of a certain size must spend two per cent of their profits on CSR activities. But what's more important for India Inc is the need to define what CSR really means and how to go about measuring it. And, perhaps, to effectively facilitate the building of a mechanism by which a vital link may be established - where those who want to help are put in touch with those who will benefit the most from such help.
In the first case it is imperative for CSR in India to align itself with global standards, not to mention the most abiding global vision of just what CSR needs to do. This should ideally flow from the United Nations Global Compact (UNGC), which urges big business to address pressing global concerns and help find new solutions. This is why it was linked to the UN's Millennium Development Goals (MDGs). India has agreed to be a part of both, so it's clear that we need to work towards greater alignment with these comprehensive guidelines. Besides, such alignment with the UNGC and MDGs will enable India to become globally visible to more investors and also help drive competitiveness.
The need for CSR, though, is even greater in a vast land of unexplored opportunities. If a corporate entity sells its goods and services in an area, however remote, equally, it has a responsibility to contribute to sustainable development in such an area. Yet CSR in India is currently too dispersed or overly diverse. All kinds of initiatives are being undertaken by corporates but so many add up to nothing. They're just found as perfunctory lines in so many annual reports and chairmans' speeches. But good work is still done in many parts. One way to help scale up this process is to look to harness the power of IT to do one very simple thing: connect the participants better.
Corporate houses are ever willing to 'seek' opportunities, while on the other hand several NGOs and trusts are ever willing to help communities in need 'soak' up that giving. If we could precisely identify and plot the spread of such 'seekers' and 'soakers' on an electronic platform across all our states, districts and blocks (the small administrative units within districts) it would hugely catalyse collaboration;and help deliver a good CSR package that would be better than the sum of its parts.
It is here that there is a need to set up an online CSR registry or database, perhaps under the ministry of corporate affairs. Such a registry will help give big CSR initiatives both a deeper and a wider scale, not to mention greater scope.
To quote but one example, on a visit to Puducherry, I saw hundreds of unused boats littered on the beach at Mammalapuram on the east coast road from Chennai to Puducherry - a post tsunami result of well-meaning but ineffective CSR.
It isn't difficult for those of us that have gone there in recent times to imagine that fishing villages that may have had a hundred fishermen and ten boats earlier may have only ten fishermen now with hundred boats gifted per charity by several individual entities. There was a clear case of gross mismatch. It happens due to no good metrics or measurement factors being available. Most donors in such cases are happy at having done their bit, and rarely go beyond the act of contributing to study the impact of their wasteful CSR.
This is why an e-registry would be a very good idea to consider. It would also help identify those 'seekers' who can lead initiatives. They can also enlist the support of an important cog in the development machinery of the state: the BDO (block development officer). If a BDO is encouraged to identify deficiencies in each block - also using the UNGC's MDGs as a backdrop of sorts - and uses a CSR e-registry to identify resources, there is a good chance that, say, a primary school with five classrooms can be quickly created in a remote part of the nation with support coming from companies that sell cement, steel, computers, generators and even tiles and knobs.
And it follows logically then, that there could be several seekers and soakers working in each block even in disparate streams oblivious of other seekers' and soakers' presence, all keen to collaborate but blissfully unaware of each other. This is where the government, by setting up such a mechanism, should do what it's meant to: act as a judicious and effective facilitator.
In addition, it's not all just about the equitable distribution of CSR. An e-registry will also make measurement and accounting of CSR much better. Indeed, if two per cent of India Inc's profits - which some experts are pegging at $1. 5 billion over the next two years - have to be dovetailed with CSR activities, effective accounting mechanisms are essential to helping all that money go the right way. Pushing the case for big CSR was a bold move on the part of the government. It needs bold initiatives to make it work effectively now.
The writer is director-strategic engagement, Microsoft Corp India. Views are personal
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