A leading media company is using its storytelling expertise to change sanitation and hygiene behaviours of beneficiaries in Mumbai slums; a transport finance company is training men and women to become truck drivers, providing them with livelihoods opportunities; an Indian conglomerate is implementing systemic socio-economic empowerment programs in villages around its factories. These are just some examples of how companies are implementing Corporate Social Responsibility (CSR) in India today.
10 years ago, few companies apart from large conglomerates participated in CSR consistently, let alone from a strategic perspective. CSR activity remained largely ad-hoc, leadership remained un-invested, or dictated spending based on their preferences.
In 2014, this changed with the Indian Government passing the Companies Act, 2013, that mandates CSR spending by companies (2% of profit of companies that meet certain criteria)[1].
Driven largely by compliance, CSR spending touched $1.4 billion in Financial Year 2015, and later in Financial Year 2016, 19,000 companies collectively spent $2 billion on CSR in India.
Now, the CSR sector in the country is undergoing another transformation.
The next phase for CSR in India
At Samhita, we have been working with companies over the last 8 years to plan and execute impactful interventions across India. Based on our experience in CSR consulting and execution, and various research exercises, there has been a seismic shift in the way many companies, especially larger ones, are viewing CSR.
Provisions in the Act have made CSR a board-level agenda item and companies have taken the mandate as an opportunity to approach CSR strategically. They are now focusing on deepening the impact of their social sector investments. The CSR mandate has also enabled governments to engage corporations in national priority causes like sanitation, skilling, and education.
Companies are cognizant that by themselves, they may not impact millions of lives through CSR and so, are open to collaborating to reach scale, innovating to better serve beneficiaries and to create deeper impact, and learning from sector stalwarts to make the right decisions.
However, despite the CSR law unlocking substantial funding for programs, there has been limited investment in this ecosystem’s building blocks – few opportunities for collaboration, low-risk appetite for innovations or untested innovations, low implementation partner capacity, and lack of access to best practices and actionable knowledge.
A call to action to invest in ecosystem-building
Funders and intermediaries are increasingly coming together to reorient their own activities and priorities and leverage their experience, to help companies make the right decisions and achieve breadth and depth of social impact through CSR. However, these efforts need to be scaled up.
For example, along with the Tata Trusts and Bill & Melinda Gates Foundation, we created the Samhita GoodCSR technology solution designed to help companies and social organizations connect and achieve higher efficiency and impact in their projects. Such technologies can significantly help in standardization of programs, scaling up reach and impact, and improving efficiency of delivery.
The Government, through its Swachh Bharat (Clean India Mission), has attracted widespread participation by companies to execute Hygiene and Sanitation programs. However, the focus has largely been on toilet construction rather than other aspects like behaviour change and fecal sludge management.
Taking an ecosystem approach, we have designed a Grand Challenge to source and pilot innovations across the sanitation value chain, especially in gap areas, in one district of Maharashtra. Companies are playing a big role in this Challenge, funding and enabling execution with the government, foundations and social organizations as key stakeholders. To illustrate, undertaking effective behaviour change communication (BCC) at scale is currently a key gap faced by the government. Hence, we roped in a media company that can nurture the BCC elements of the Challenge.
We are also working with GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit) to create corporate partnerships, social enterprises and incubators, to create a formal engagement channel and bridge the information asymmetry. A stronger ecosystem around incubation centers supports early stage start-ups and social enterprises providing them with mentorship, financial support, infrastructure support, go-to-market opportunities and so on.
The CSR law created a launchpad for companies to play a larger role in the social development of the country. However, it has also created an opportunity for other players such as governments, foundations, multilateral and bilateral agencies, and philanthropists to come together, leverage their expertise, and invest in creating an enabling framework that can amplify the impact companies can create.
This helps companies overcome their challenges, and scale up the CSR opportunity. Companies, by leveraging their core competencies, strategic disposition, and rigor, have the potential to create long-term impact at scale. With these building blocks in place, the Indian CSR ecosystem can prove to be a guiding light, a thought leader in strategic engagement with the social sector, globally.
[1] https://www.mca.gov.in/Ministry/pdf/FAQ_CSR.pdf