'To earn CSR, a business must go beyond mere compliance with law’

"In the case of market for carbon credits, on which is modeled the concept of CSR credits, a business has to comply with all environmental norms and then go beyond that by adopting processes and technology that will reduce emissions.

Similarly, the concept of CSR credits implies that a business has to comply with all social and environmental norms and then do something extra to create social value.

In other words, a business has to go beyond regulations in order to create value for the society and earn credits.

It’s not possible for many small companies to earmark anything but very small amounts on CSR activities. A market for CSR credits will allow these companies to buy credits from the market and contribute their mite to the social good.

I understand that such a market will require defining and quantifying social good. There is large agreement on what needs to be done in the areas of education, health, livelihoods, and infrastructure improvement, but we still need some way of measuring the social good.

I am sure our economists can come out with some ingenious mathematical models to measure social good.

In the context of disputes over what creates social good, it’s important that all stakeholders – government, corporates, NGOs, and the local communities – meet openly, not behind closed doors, to decide how a project can help the community.

Lack of trust between these stakeholders will never allow us to determine what creates social good.

In conducting CSR activities, what we need is a regular engagement process with government and local community.

To my mind, CSR credits and their trading is a concept that needs be discussed more and fine-tuned."

Dinesh Agrawal is the general manager of CSR and NTPC Foundation at NTPC.