The concept of Corporate Social Responsibility has evolved with changing times and needs, what began as family charity has now come of age and is increasingly being recognized as a responsibility towards owners, investors, employees and society at large. For social responsibility to yield the desired outcomes, however, the CSR contribution needs to be meaningful and sustainable.
The challenge (in making a significant contribution to society) is that all companies do not have the required wherewithal to take up large-scale and impactful projects. Additionally, the Companies Act 2013 has changed the CSR landscape in the country considerably whereby,
a. new (and small scale) companies now fall within the CSR ambit.
b. Even those companies that implemented CSR programs traditionally need to streamline their spending.
In either case, there is the requirement to maximize CSR spend by either scaling up existing initiatives or commencing pilot projects. However, certain organisations that are new to CSR have limited exposure and experience while others have budgetary constraints. Small and Medium Enterprises (SMEs) often face staff, time and financial limitations as the key impediments to their broader engagement in CSR. Apart from this, issues like lack of information, difficulties in employing trained workers and receiving support from officials also limit SMEs from active participation in CSR activities.
Many such companies find it simpler to contribute to the Prime Minister’s Relief Fund – a popular ‘quick-fix’ solution. Data shows that CSR spending as contribution to the Prime Minister’s fund witnessed a 418% rise between 2014-15 and 2015-16. The good news however is that there are still several corporates that believe in ‘owning’ a CSR program, because it is not only a fulfilling experience but it also allows them to spend their CSR budget the way they want to i.e. on a cause that they believe in. The question is how do they ensure utilisation of their CSR contribution in impactful and sustainable projects despite above-mentioned constraints?
The answer perhaps lies in the age old maxim ‘Collective wisdom is better than individual wisdom’; associating with compatible corporates could be the way forward to ensure meaningful impact. Creating a consortium to execute CSR programs is potentially a ‘win win’ situation for partnering corporates; they will be able to generate a larger pool of resources which in turn will create a ‘multiplier’ effect and enable them to implement large scale and impactful programs rather than piece-meal projects. Secondly, the collective expertise of multiple companies will be ‘on the table’ for all to utilize i.e. partners will be able to share ideas, knowledge and skills.
Corporates, especially those new to CSR, will have the added plus of tapping the experience of partners to identify and effect the most suitable projects. Collaboration also leads to utilization of the comparative advantage of each partner in terms of their respective core competencies. Apart from this, implementing CSR through a consortium will enable better outreach both sector wise and geographically i.e. co-owning social programs will enable a larger footprint for each of the partners.
Outcomes of such collaboration have been observed to range from rapid action (through sharing of information) to development of ‘mega’ initiatives. Coca-Cola, NDTV and many large Indian and multinational corporations came together under the ‘Support my School’ campaign to create a holistic learning environment in Indian schools. Together they revitalized about 500 schools (between 2013 and 2017) thereby impacting about 150,000 students across 22 states. The campaign provides a host of amenities in schools i.e. water filters, toilets, rainwater harvesting methods, playground equipment apart from planting trees and educating children on how to live healthier lives. Likewise Covestro (leading supplier of polymers), alongwith renowned partners like PACE (Podar Advisory & Consulting Enterprise) and Habitat for Humanity, has taken up the task of not just building 10 lakh toilets in India by 2022 but also creating awareness of the efficacy of healthy sanitation practices to ensure better utilization and higher adoption.
Such instances indicate that consortium CSR could indeed provide a practical option not just to SMEs but even to larger companies to effectively and holistically address the myriad social ills in the country through their CSR programs.
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