Why India Needs A CSR Index

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Why India Needs A CSR Index

WITH Corporate Social Responsibility a legislated part of India's Companies Bill, it is time for two-way traffic and Corporations in India now to mandatorily spend money on people. So the next question that follows, is, how should they best do this when there are so many ways to spend money in the world?

There are guidelines in the Indian Bill that provide some instruction on the ‘where’ and the ‘who’ of money being spent as CSR activity. They cast a wide net, generally indicating that corporate social responsibility lies primarily in the areas of providing health, financial security and opportunities towards self-sufficiency for those in need.

While efforts are being made to track this activity from a numbers perspective and there are numerous awards handed out by peer groups and trade bodies, we are yet to develop an Index to assess the impact from a beneficiary perspective. Given that we are mandating corporations to spend money on us, we as a society would be better off if we had a way of measuring it.

Scales of measurement

Could we, for example, apply the Triple Bottom Line approach, which looks at “People, Profit, and Planet”, and was developed to measure ‘the impact of an investment on economic vitality, natural resource stewardship, and community well-being’? To adapt it for CSR would mean understanding what is the ‘profit’ in a CSR activity, because it’s easy enough within the guidelines to pick an activity for a group of people that can also be planet-friendly. Let’s say that the intended profit is to make them feel good and appreciate the corporation, then how can that happiness be measured? (Yes there are ways now with technology but that’s probably not going to be that useful to invest in just for the sake of CSR).

There are continuous and ongoing efforts in the world to create a Happiness Index to measure how happy we are, relatively, from time to time, and is it distributed equally, and who’s not performing as a provider of happiness within governance and business.

Taking stakeholders along

It’s complicated, and gets even more so in the case of CSR because apart from the Corporation (employees & shareholders) and “those in need”, there are other two stakeholders - the Government, and Us, the people-at-large, part of the Social, who may or may not be in need right now. The four of us together ideally have a say in whether or not a CSR activity is commendable, and now how can our inputs be put together to create a ranking?

Consider Sarvajal, a water ATM project that meets the Companies Bill provision of ‘making available safe drinking water’, was founded in 2008 by the Piramal Foundation with the aim of providing clean water to a village in Rajasthan. Sarvajal is now a for-profit social enterprise (still in start-up phase) where franchisees are able to provide clean drinking water at 30 paise a litre facilitated by digital payments and using cloud-based technology to monitor volumes. As scarcity and ‘resource awareness’ become more and more a topic of discussion in the world “Water ATMs” could be the invention that gets normalised for us in the future as a way to access clean water without overpaying for it - in remote, rural or urban areas that are connected by technology. So while this CSR activity might not be saving the world completely right at this very moment, it has created a small-scale model, as an investment you could say, of a world that no longer needs saving.

Combating tokenism

If ‘bringing happiness’ and ‘opportunity to innovate’ are two indicators of positive CSR activity then on the dark side there would be tokenism, a perfunctory gesture that only has a small impact, or when CSR is used as just another opportunity for brand extension - in the form of an engagement platform, usually a contest and at times a TV property - that has little measurable result in terms of what happens after the event or broadcast is over. Yes, there's enjoyment and transfer of knowledge but it is hard to determine that impact's effectiveness in delivering the goal of the project. For example, would a PSA on domestic violence on prime time television empower or terrify someone who faces domestic violence, or would it titillate an abuser and make them feel empowered instead. Human minds and emotions work in all ways, and advertising gurus sometimes see a PSA as an opportunity to win an award so forgive the cynicism at my end.

If you’re going to spend, make sure it’s spent well

In both these cases all four stakeholders needs are not being met collectively. Us, the world-at-large, the fourth stakeholder, is being treated like the audience for the CSR activity being undertaken. Of course there’s no harm in a little frivolity and I am not blaming our troubles on media (heaven forbid) but as Corporations probably understand far better than regular folk money does not grow on trees and if you are going to spend it make sure you spend it well.

CSR activity that includes the world-at-large as a genuine stakeholder in the outcome (because Governments automatically benefit when people benefit) would result in the creation of a society that is closely knit and better prepared for the resource crunch of the future we all currently hold some fear about, and which quite frankly prevents us from enjoying ourselves and living our lives freely and non-aggressively. Measuring that in a CSR Index is equally important as fulfilling needs of the needy and engaging brand presence, and perhaps lies at the heart of deciphering what is good CSR.