Why CSR is good for business

It needs to be a more holistic idea than, say, charity or philanthropy

Mohan Singh | November 16, 2020


#development   #Coporates   #CSR  
This school in Dahanu, Maharashtra, has benefitted from CSR activities (Photo courtesy: Sterling and Wilson)
This school in Dahanu, Maharashtra, has benefitted from CSR activities (Photo courtesy: Sterling and Wilson)

The United Nations Industrial Development Organisation (UNIDO) defines Corporate Social Responsibility as “a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders”. The eventual goal of any effective CSR policy is to balance the economic, environmental, and social imperatives that a company faces while it strives to address the expectations of its various stakeholders.

In that sense, CSR needs to be a more holistic idea than, say, charity or philanthropy. While the idea of ‘giving’ also lends a more compassionate character to a corporate brand, it is a narrow prism for a business to envision itself in the larger scheme of things.

This is where CSR comes in. Through a much wider scope of engagement with participants in the ecosystem – employees, suppliers, customers, shareholders, communities, and the environment – CSR tends to be more strategic in its approach. Compared to charity-based approaches, CSR helps businesses achieve profitability, in a sustainable and responsible manner.

No wonder the interest in CSR among companies in Indian has only increased over the years. While the understanding of the value that CSR can deliver is a factor, new governmental mandates have played a vital role in CSR spends.

According to KPMG India's CSR Reporting Survey 2019, 76 percent of the top 100 listed companies by market cap had reported spending the minimum stipulated amount or more on CSR related activities during 2018-19. This was twice the number reported during 2014-15. The aggregate yearly CSR spending by these companies rose from Rs 5,115 crore in 2014-15 to Rs 8,691 crore in 2018-19.

CSR when done right can have a positive net effect on the business itself. A well-conceived and executed CSR framework is increasingly becoming the most critical marker of a company’s ability to be inclusive, responsible, and well-intentioned in its strategic intent. So, for example, a company that is seen to be supporting good causes is likely to attract top-tier talent; employees who are eager to make a difference in the world are more likely to identify with a company that demonstrates similar traits through its CSR strategy and people practices.

Our experience
At Sterling and Wilson, doing business is as much about integrating social, economic and environmental obligations as it is about creating value for ourselves. We take pride in being accountable to our shareholders as we are towards the well-being of all our stakeholders, from employees and vendors to the world at large.

As stewards of our shared resources, we take the utmost care to use them as optimally as possible by reusing and replenishing them where we can. This reflects in our CSR philosophy. For instance, community-based development has been an important part of CSR activities, which include education, skilling, health, and hygiene/sanitation projects. We focus on a hybrid approach that integrates company-led projects, employee volunteer work, and partnering with NGOs.

The i-Care initiative, for example, saw our differently abled employees joining their colleagues to take part in the first Breaking Barriers Olympics held in April 2020. Employees also turned out in large numbers to help clean up Mahim Beach in Mumbai, distribute school kits to underprivileged students, donate sports equipment to an orphanage in Matunga, Mumbai, etc.

During the past four years, the CSR activities of the company have grown with a continued focus on communities, education, health, and the environment. The education sector is supported by the construction and maintenance of school infrastructure, provision of toilets and drinking water supplies, computer and science labs, and libraries. We empower schools through teachers’ training sessions, supplementary classes for students, distribution of free course material as well as remedial classes and personality development workshops. On the healthcare front, we continue to support the government’s anaemia reduction programme, providing free baseline HB testing and iron folate tablets for adolescent girls.

Putting CSR at the heart of the company’s strategy can help achieve profits more sustainably and responsibly. The momentum on CSR has picked up in India, and companies have been making efforts to integrate CSR into their business operations. CSR has emerged as the binding force that not only attracts different stakeholders to the company brand but also feeds into business performance in the long run.

Mohan Singh is Group HR and CSR Head, Sterling and Wilson Pvt Ltd.

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