Posted by Celin Thomas
By Celin Thomas
Consider myself lucky to be able to be a participant in a CSR conclave orgnanised by Yes Bank & IICA in Mumbai on the 8th June 2012 at the Nehru Centre.
Hon. Min. Veerappa Moily was present and gave his valuable inputs and feedback on the topic of discussion. The one good point which was nicely brought out was the trust deficit primarily triggered by irresponsible business practices that lead to the global financial meltdown in 2008, which was bravely accepted by the Minister himself in his speech.
Peoples loss of faith in corporations and government was primarily due to the fact that they were being perceived as greedy and least considerate about business practices, environment and community welfare. According to Mr. Moily, businesses can bridge the trust gap by adopting effective CSR initiatives. CSR is Corporate Social Responsibility. Which is often confused as charity by many even today.
Considering the global industrial scenario, CSR which was also the main topic of discussion in the conclave- is considered or rather was projected as the saviour by the eminent panelists.The panel consisted of noted academicians, experts from consultancies, IICA, planning commission & ministry. The best part of the conclave was the knowledgable panelists who belonged to some of the reputed firms and industrial houses such as Deloitte, Tata, Jindal, Godrej, ITC, etc.
Financial contribution to CSR fund debate
I began to wonder if Mr. Moily and IICA were lobbying with the corporates here in Mumbai through this conclave to promote the 2% of PAT contribution to CSR agenda. Which is BTW being successfully implemented by PSUs in India.
This topic bought upon funny and intriguing revelations. Like how does one go about spending 2% of the PAT and into what? Define CSR activities or whatever that may fall in the gamut of CSR initiatves? There was talk about necessary CSR guidelines that would answer all the queries which were raised.
I guess the only concensus that the conclave agreed upon was to work amicably on a set of guidelines that set the precedent for spending on CSR and how to go about the implementation of activities.
Creating social value
CSR is definitely the new mantra to revive businesses and their reputation whilst reinstating faith of people in their government. For extractive industries, CSR is huge mandate. Earlier product and businesses revolved around inducing demand and upscaling lifestyle. But after the recent economic meltdown, everyone is slowly coming to senses that available natural resources need to be used judiciously and that very soon there’ll be hardly any means to live luxurious lifestyle.
Pretty soon, having a luxurious life may seem like an outdated concept or worse could even be fined just as the largely debated carbon tax, there could also be a lifestyle tax. So things that are additional or excess may soon turn into baggage or liabilities.
Here is where social entrepreneurs and corporates can find the purpose and the future trend. Which implies in a simple manner that, produce or provide a service that adds value to life. Instead of creating a buzz and demand, therby plundering natural resources. It is better to switch your business model to suit future requirements. I think in the long run, only those companies will survive that have capacitated themselves with processes that support products and services that generate value rather than support Greed!
Two decades ago
Companies never had corporate governance or any structured policy and value system. But today a corporate functions like a huge family tree, with the head of a family and several stakeholders. The onus lies amongst the senior most to decide and act upon responsibly for the wlefare of the vulnerable stakeholders. Instilling values mid-way will be very difficult, it is always better to begin with a good set of values; however having no values can leave a company clueless about its stand on certain matters that may have legal & regulatory implications.
It is of utmost importance, to map out each and every process of the company and also its supply chain for all the applicable norms and check for compliances, here is where one can always start & never go wrong. Policies and guidelines, charters, laws, acts, regulatory bodies have sprung up to monitor and gauge performance & compliance. Performance & compliance are the first mandatory steps.
The real measurement of the company’s life comes from its social investment. This investment can be in terms of its policies,practices and processes that lead them to produce products and serve their stakeholder accordingly. Social investment or responsible businesses essentially generate value in the long haul. They command respect for the organisation and its representatives.
Certain developmental inititaves have reflected government and corporate apathy. These initiatives have given birth to naxalism, maosim even terrorism. While there have been certain inititaves and policies on the regulatory and corporate level that have bought about social awakening and reforms such as diversity & inclusivity, equal opportunity, affirmative action, etc.
It is clear that corporates play a big role in abolishing and at times even creating social evils. Needless to say, it is imperative that the corporations must have values based on ethical systems that would provide the necessary impetus in influencing profits, people and eventually the planet.