By Jocelyne Daw
This past September I had the privilege of accompanying my husband on a business trip to India. Incredible India lives up to its billing. India is modernizing and is dynamically and rapidly becoming a force for social innovation. India is a new CSR leader. Why and how has this happened?It’s been a little over a year since the Corporate Social Responsibility (CSR) law came into effect on April 1, 2014 in India. The law requires all companies doing business there, with at least $1 million in profits, to allocate 2 percent of the average net profit over three years against key social and environmental programs. While the issues are diverse – education, water and sanitation, financial inclusion, hunger, poverty and malnutrition amongst others – the intent of the Act is clear: to achieve significant impact at the grassroots level.CSR Law Thoughtfully CraftedThe law carefully sets out key infrastructure requirements that in other countries around the world have taken decades to develop. They are critical elements in the creation of strategic and impactful public-private partnerships for social good. The law also formally introduces CSR to the Boards of thousands of companies who may not have understood nor practiced the concept and outlines specifically focused activities. (See PwC's excellent handbook on CSR in India).Among the key actions the law requires is the establishment of a governing CSR committee of three senior members (one independent from the company) with responsibilities to oversee CSR policy setting, its framework, implementation, measurement and reporting. The measurement and reporting requirement has been particularly important in sparking new innovation that truly drives positive social value and impact. AND when done well can also drives positive business value. (More on measurement and reporting innovation in the next blog!)In addition to the law, Prime Minister, Narendra Modi is challenging Corporate India to undertake bolder and more innovative social action and is personally committed to advancing India’s poor by focusing on two key areas – access to banking and sanitation. In his Independence Day speech he challenged the country to “walk together, we move together, we think together, we resolve together and together we take this country forward.”Strategically Embracing the New LawAs a result, within a short period, the entire landscape of CSR in India has radical shifted. Companies have embraced the law and scaled up initiatives that they already had, replicating their solutions and benefits to a wider population. As well many have chosen to look at new areas and pilot some initiatives in the first year.This process has led to the rise of a new breed of leaders in the corporate landscape who are learning more about corporate social responsibility as part of the CSR committee and adapting themselves to not just complying with the law but also going beyond their comfort zone to streamline and assess what was until recently a cheque-book charity concept in their companies.As well, with a large millennial population that’s increasingly vocalizing its preference for brands that do good, and mobile phone penetration nearing 80 percent, companies see the opportunity is ripe for action and benefit for them!The new law holds the potential for what is estimated to involve 8,000 companies, investing more than $2 billion in social programs. Yet, I see even more potential. Companies are starting to understand the value of aligning their CSR commitments with business strategy, adding more resources from their companies, including key products, services, human resources and communications to programs. Incorporating these resources could expand the impact two or three fold. Leading Examples:Here are some leading social innovation & shared value examples:
Mukund Rajan of Tata Sons successfully led a business coalition movement to ensure that skilled volunteerism hours counted as part of the 2 percent requirement.
Jeweller Tanishq, celebrates a taboo Indian subject: remarriage. Described by Adweek as a “bold and revolutionary campaign,” Tanishq’s ads immediately sparked social media conversation and found honour among one of the world’s top women’s empowerment ad campaigns. Watch the ad and learn more about the campaign, here.
The Mahindra Group stimulates social innovation through its “Spark the Rise Fund” a digital platform for individuals or groups to submit concepts to develop innovations. Project ideas are considered in technology, energy, agriculture and rural development, infrastructure, transportation and social entrepreneurship. Those selected for funding are aptly called “sparks.”
Companies are recognizing the power of volunteerism, with the Times of India hosting multiyear campaigns to encourage citizens and employees to engage in literacy training for children and most recently English training.
With a population of almost 1.5 billion and more than 700 million living on $1 per day, the CSR mandate under the Companies Act should stimulate strategic engagement with social issues. Corporations can comply at the very basic level of the law or use this historic moment to innovate for the betterment of India, its people and economy. I am convinced it will be the latter!
This blog is the first in a series about my key takeaways from a recent trip to India. CSR is a dynamic, evolving field and I was inspired by the innovative approaches taken by leading Indian organizations. Read the second installment here!