CSR is not a new concept to MNCs that have been carrying out CSR activities in India for quite some time now. However, CSR was not a familiar concept to most Indian companies prior to the enactment of the Companies Act, 2013. The act has brought about sweeping changes to the laws governing the corporate sector in India. Several novel concepts have been incorporated in the Companies Act. One of these includes Corporate Social Responsibility (CSR). The new law has made CSR a mandatory obligation for corporates fulfilling certain criteria.
The rationale behind the incorporation of mandatory CSR activities can be attributed to several factors. Businesses have certain responsibilities towards the societies, environment and communities where they operate. Although Indian corporates have carried out philanthropic activities since pre-independence era, but the need to add CSR ideas and implement the same to bring real change on the ground was always felt.
Unlike their western peers, most Indian corporations have been reluctant in fulfilling their social obligations. One only has to take a close look at the CSR portfolio of prominent Indian companies prior to the implementation of the Act. They often didn’t have a full-fledged CSR Strategy in place. They failed to take into account the needs of the target constituency, monitoring of the initiative or the impact of the initiatives.
India is home to 1.31 billion people, some of whom live in acute poverty and face myriad of problems. The government has been trying for years to eradicate the problems afflicting the holistic growth of the country. However, the experience so far well illustrates that it is impossible to bring about radical transformation without the active participation of the corporate and the private sector. Examples of social responsibility that corporations can carry out to bring about a positive social change include efforts aimed at tackling hunger and malnutrition, creating awareness about preventive healthcare, improving access to education and skill development, creation of employment opportunities, bridging gender inequality, measures to empower socially and economically backward groups, promoting environmental and ecological sustainability etc.
The enactment of the law is only a stepping stone. A lot depends on the will of the corporations to execute the plan into actions. The target constituencies should be encouraged to take benefits of the CSR initiatives. The government should also work hard to remove any obstacle that the corporations might run into. The resolve of companies and government will play a crucial role in the success of the CSR strategy of the Act.
We, at Fiinovation, believe that corporates, CSOs and governments should pursue out of the box CSR ideas and align their forces around a comprehensive national CSR strategy to bring about real change on ground and set examples of social responsibility for other SMEs to emulate.