Corporate Social Responsibility is a time-tested mean of addressing social challenges afflicting the society through corporate intervention. It is generally undertaken by corporate houses to create value in the society. To accomplish the same, companies often embed a CSR strategy in their business operations. A comprehensive CSR Strategy is a robust framework on which a corporation lays the foundation of its CSR activities.
The enactment of Indian Companies Act – 2013 brought a paradigm shift in the way CSR activities in India were carried out. The law made CSR a permanent and mandatory fixture of an organization’s business activities. However, at the same time, it incorporated an element of flexibility that allows corporations to design a CSR strategy that is in alignment with the business domain of their organizations.
Companies can select from any of the pressing issues that they can relate to in any way and channelize their funds accordingly. The issue chosen can either be related to their core business or something different. However, the ways in which organizations implement their CSR activities in India have also changed substantially. Besides earmarking and doling out funds for societal welfare, corporations have also started promoting voluntary services by their employees. While the ground realities necessitate that CSR activities largely remain intact, the emphasis now is to garner long-term value for the organization and the society.
So, what are the factors that should be the guiding factors for the overall CSR Strategy? And what impact will they have on the long-term results for the organization and the society? Let’s check.
Compliance The primary requirement of a CSR strategy is to adhere to the rules and regulations laid down by the Companies Act – 2013. Compliance ensures that the organization doesn’t contravene the law and that its funding for the social welfare follows statutory regulations including environmental laws, social laws, and other government norms. Moreover, abiding by the standard parameters makes sure that funds are effectively utilized for CSR implementation.
SocialCause The main aim of mandatory CSR for organizations fulfilling minimum eligibility criteria is to address social issues and grievances. Organizations have the liberty to select the social cause they want to address depending on factors best known to them. They can also choose to coordinate the initiatives based on their CSR Strategy with other national and international assistance programs.
StakeholderEngagement When drafting a CSR strategy from scratch, organizations must lay emphasis on three main stakeholders – Workforce, Target Community, and Customers. These organizations should encourage their employees and motivate them to get involved in the ongoing social interventions. Also, the organizations can lay emphasis on the communities in the vicinity of their premises and try to bring about a positive change in their lives. This way they will be able to forge a strong bond with the locals. Moreover, companies should try to create a positive brand value by involving their customers or clients in their CSR efforts. A good start can be made by pledging a percentage of income from sales to a social cause.
Business Organizations should place emphasis on value that is created through the social endeavors. The value is created on the back of four factors- Product Innovation, Skill Enhancement, Value Chain Enhancement and Market Value. Via these factors, organizations can take advantage of their technical capabilities to manufacture products that resolve a particular social problem. For example, for sanitary equipment manufacturers, this could be an inexpensive bio-toilet that will go a long way in solving the problem of lack of sanitation facilities in the countryside. Similarly, organizations can engage youth and increase their skill sets, which in the longer run, will also improve their prospects of decent livelihood.
Companies can leverage the benefits of these factors of CSR Strategy by creating essential services such as sanitation, health care, clean drinking water, education and financial literacy. There are immense opportunities in the CSR domain for the corporates. Their timely interventions in the social sector will also go a long way in improving the situation on the ground.
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