"I hope good things will happen with mandatory CSR"

jasleen

Jasleen Kaur | May 20, 2014




A full-time philanthropist, Rohini Nilekani has over the last few years contributed to a wide range of sectors including education, environment and water. She sold a part of her stake in Infosys for '164 crore to fund individuals and institutions that work for similar causes. In a candid interview with Jasleen Kaur, Nilekani talks about her expectations from and apprehensions about the new CSR regime.

What is philanthropy for you?
Philanthropy means love for human kind, and to me this essential meaning remains the same. In my personal context and in today’s media context, people refer to philanthropy as an act of strategic generosity done by wealthy people. With the kind of rapid wealth creation that is happening in society today and with narrowly gained value from the economic chain, I think philanthropy has also gained currency as a way of redressing the economic imbalances.  

What is the difference between philanthropy and corporate social responsibility (CSR)?
They are two different things and should be treated separately. Because when an individual decides to give his or her wealth away it is a personal decision that they take as a moral compass and for the need of the society around them. But when companies do it, it’s much trickier. First of all they have to get the consent of a lot of people, as it is collective money and how it is deployed should be decided in a transparent manner. Others should be able to contribute in the decision-making process. This is my personal belief but we now have a law and I think we should gracefully accept it. We have to make sure that within the framework of that law companies put up on their website what their CSR policy is and how they actually spend that money, and they should monitor it to see it is actually doing social benefit.

How do you see the new provision of mandatory spending by companies on CSR?
We have been arguing against it since the policy was being formulated and the draft was being put up. I was opposed to it. I don’t think it should be mandatory because it seems the government has outsourced its own functions. It would never work as an alternate tax. It would not accrue the kind of social good that we would want to see if it is done in a compulsory way and under the ambit of a system that might not be able to check against any abuse. I think if the government would focus on ensuring that companies ply with the existing laws, if companies inside their fence have special focus on reducing harm to the environment and improving benefit to people all along their chain, that would do far more good than this two percent tax on profit.         

So how do you see CSR contributing to the society?
I think they have a huge role to play, primarily in the way they conduct themselves within their fence. This is their primary duty and responsibility that they are adding value not just to their shareholders but to the society as a whole. Companies should have fair employee practices, should become more and more environmentally conscious, prevent pollution and so on. But in any case that point is moot now because CSR is a law. We have to move our focus to ensure that this two percent is going to be transparently used and is useful to society.

What kind of changes do you think the corporates will have to bring in their policies?
The changes will come because now the rules have been framed in a very tight manner. So companies are forced to work under these rules. For instance, if they want to do something completely out of the box, they would have to be much more cautious. They will have to fit their CSR work within the rules: for example, if they want to use this money to help smaller companies reduce their water pollution, would the law allow it?
Companies will certainly have to change their approach. They will be very much accountable for the CSR money and, I hope, accountability will be held in the right spirit. I am already hearing stories about unnatural pressure being put up on companies. I hope they can withstand that pressure and do useful work.

Do you think it would be challenging for corporate houses to change mindsets and understand that wealth creation and distribution are meant to go hand-in-hand? 
Once we all start engaging with the community around us, we realise it is such a rewarding activity that it will benefit companies and their employees a lot as it gives people a very positive feedback. And if their employees are also allowed to get involved in such activities, that itself can create a good movement. Today, one thing we know is that employees want to work for companies that they believe are doing good work. Nobody wants to work for a company that is doing harm to the society or environment. In that sense it also gives an opportunity to the companies to show that they are ethical. I hope that positive change will come out of all this.    

Are you hopeful for the future of CSR in India?
We will really have to wait and see but I have very much hope that good things will happen. 

Companies have been talking about lack of proper channel through which they can spend money on social welfare. What do you have to say about that?
The new Act is going to require a lot of new institutions, intermediaries and platforms to come up because it is very hard for companies to be able to find a right NGO. It requires actual company attention as no one would want to give away money and forget about it. The new Act has an exit option by allowing companies to give money to the prime minister’s relief fund year after year. But if they choose to do something differently, they will have to set up a team within the company; and outside they will need new institutions to come up to match the CSR money with the right recipient. Already some such intermediaries have started coming up.

While some corporate houses like Tata Group have been doing CSR for long, how do you see others taking up this activity?
They will just rise up to this aspect of business; there is no choice but they will have to go and do it. And many other companies have been doing good work in the past anyways. It’s just that now it is under this law.

Bangalore has of late emerged as a hub of philanthropy. What are the reasons behind it?
There are various reasons: the technology companies have created enormous new wealth, both in the companies and in the hands of private shareholders. I think there has been a culture here for philanthropy because there is a very different reaction to the wealth. Also, the climate around the idea of what business should actually be doing has really changed all around the world. Much more is expected from the corporations than before. And Bengaluru quite naturally fits into that new ethos that business should accumulate not just monetary wealth but should create diverse value for society; I am not surprised that there is so much of outreach and CSR work happening through companies in Bengaluru.

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