Still struggling, CSR after 5 years of the mandate
Five years ago, India became the first country to bring about one of the most revolutionary legislation in the Indian constitution. No other country had come up with a law asking corporations to spend on social development activities till date.
With the legislation passing the corporate sector became a critical stakeholder to country’s social development. The legislation envisages that companies will now leverage their enterprising fervour, efficient management skills and innovative outlook and to transform the social development efforts.
On one hand the numbers on CSR look impressive with 47,201 crore has been spent on CSR activities during the period from April 1, 2014 to March 31, 2018, we should also focus on critical challenges that need to be addressed and how to resolve them, will determines the future of CSR in India.
Here are a couple of challenges enumerated below:
Corporates finding it difficult to spend the money
1913 companies met the criteria for mandatory CSR spending, in the year FY 18-19. Out of the 1913 corporates 510 companies did not completely spend the CSR prescribed amount. This is an issue of great concern being 5 years ahead of the law being passed. Corporates generally seek to invest in the Prime Minister Relief Fund. Companies not spending on CSR gave multiple reasons such as non-finalisation of location of the project, technical difficulties and inability to build a team to implement and manage these programs
Maximum CSR spends limited to a few states
One of the most practical and technical issue corporates are facing is the concentration of CSR funds in the more developed states of Maharashtra, Gujarat and Karnataka. They are also biased towards certain cause and focus areas such as education, healthcare, water and sanitation. Areas such as technology incubation, supporting sports, veterans, arts & culture remain towards the bottom of the list of causes supported through CSR by Corporate India.
Smaller NGOs not able to manage expectations
The implementation and NGO side is facing difficulties matching the corporate’s expectation. Corporates expect tangible results in a shorter timeline, which might always not be possible due to the nature and external dependencies in the space. NGOs have failed to convey the complexities and time-intensive nature of social development process. NGOs are expected to report in the required format and keep track of every single penny due to the strict laws in the legislations. This leads to corporates sorting to bigger NGO players with a more evolved organisational practice. This is making grassroot level of NGOs be further away from CSR funding
When we look at these CSR challenges, while it needs time to evolve; companies are already warming up to the idea of including CSR as part of their strategy; technology and data driven efforts will be the catalyst for a sea change needed in the way CSR is implemented in India
Contemporary world is not just working with data analytics but also taking help of this analysis for better decision making. However, the CSR space still is more intuitive in nature and is still practicing cumbersome paperwork or excel sheets, and transform the way CSR is being practiced, planned and managed right till the execution level.
CSR can be streamlined in its process and make it more paperless and make it more impact and result driven. Technology can be leveraged at different levels of the CSR lifecycle, which will help in making it a transparent process and reach the last mile with every penny spent.
Corporates should leverage technology at all levels, by not just restricting itself to reporting but also planning, implementing, monitoring and impact assessment of their CSR interventions.
Introduction of technology in the sector will also help smaller, ground level NGOs to benefit them, make them more accessible and accountable to the work taken up by them. This in turn also builds trust and confidence with the corporates to invest in newer geographies and areas that need funding. There needs to be a change in the way people think about CSR.
We have a long way to go in the Indian CSR and Sustainability sector, the way it is growing it’s an exciting journey that the sector will embark in the coming few years. If we get this right, the sector has a promising future and lead India to be a thought evangelist in the sector and a pioneer in encouraging corporates give back to the society for the greater common good.