CSR as Shared Value from Indian context
In 2014, India introduced CSR law being the first country in the world to make it mandatory. The corporate sector was initially taken by surprise and many of them perceived this as an additional tax burden. India also saw a new government in 2014, which was under pressure by Industry Bodies and Associations to overturn the law. Instead, the new government wanted the corporate sector to play an active role in the development of the nation, and encouraged companies to start thinking in the direction of nation building through CSR. Government initiatives like Swachh Bharat Abhiyan were promoted under CSR and active efforts have been made to make it a public movement considering sanitation issues concerns everyone.
As the realisations dawned on companies that the CSR law is here to stay, companies starting looking at CSR positively experimenting with different initiatives and partners in the last three years. One of the most interesting development which we are seeing now is that CSR is being talked seriously at board room level and active discussions are happening on how to make it more strategic and meaningful. Companies have started looking at innovative ways on how to utilise the budget so that it benefits the community and also the company in the long term.
Last month, we had Prof. Michael Porter of Harvard Business School talk to the Indian Inc. about Shared Value in Mumbai and Delhi and how is different from philanthropy. Large conglomerates have started creating a subsidiary or division on how to make doing good sustainable and integrating with the business case.
CSR and Shared Value can co-exist. In a recent visit of SoulAce to New York for the Global Shared Value Summit, many MNCs wanted to understand whether in Indian context does Shared Value exist considering CSR law is in place. It came to their surprise that companies are already looking at Shared Value approach within CSR law though they might not be terming so right now.
Shared Value is where we can create win-win scenario for both the community and the company from long term perspective. The concept of Shared Value will be different for each company based on its products, geography, customers, suppliers etc. Each organisation would need to look inward on where it can see synergy with community goals and decide. Listing down some of the possible ways in which companies can look at integrating CSR & Shared Value:
- Companies can look at creating alternate sustainable supply chain by understanding the suppliers and the alternate opportunities available. For example, a hotel company can eliminate the middlemen by directly working with weavers, by procuring high quality apparels for its employees instead of the contractors. It can work on capacity building and better working conditions for the weavers, which would help them increase they livelihood. In the process, the company benefits as it gets better quality at reduced price
- It could be part of the larger industry wide shortage of skilled manpower and working on building capacity of the youth who could in future join the work force.
- It could be working with the communities in and around the company factory location which would also benefit the company in the long run in terms of better employee productivity, becoming a preferred recruiter, reduced disturbance and better working environment etc.