The CSR revolution in India

The CSR revolution in India

A British Asian Trust executive reflects on the power of corporate social responsibility (CSR) to transform lives in India.

CSR in India is certainly not a new concept, but in evolutionary terms it is more important than ever for leveraging social impact. With companies increasingly integrating CSR into their sustainable business strategies, serving local communities is paramount for any forward-thinking and innovative organisation. Setting new benchmarks in India, the British Asian Trust is your partner of choice to help business take the CSR ecosystem to the next level.

Though rooted in traditional ideas of philanthropy, corporate social responsibility today requires a highly strategic approach, which filters down through all day-to-day operations. Three commonly-adopted words are “Profit, People and Planet” - and CSR has a unique advantage of positively impacting on each. In adopting this principle at every level of business, investors can make a real difference and help change the future of India and its people.

Over recent years, the nature of philanthropy in India has shifted dramatically. In 2014, the country became the world's first to enshrine corporate-giving into law. The change mandated every firm operating in India with an annual turnover of more than Rs 10 billion to contribute 2 per cent CSR. Cementing India's position as a leader in corporate engagement, the move fostered a new commitment to eradicating hunger, improving education and environmental sustainability, and promoting gender equality.

Crucially, this wider adoption of CSR has driven a move away from traditional “giving”, with companies now viewing poorer citizens as customers that can be served for the benefit of all. Such thinking stems from C.K. Prahalad's famed 2004 book, 'The Fortune at the Bottom of the Pyramid', which argued that the world′s poorest 4 billion people - two-thirds of the global population - are an untapped market with colossal buying power. Any company that could learn to serve them, he said, would not only make money but help them escape poverty too.

Microsoft founder Bill Gates memorably called the theory “an intriguing blueprint for how to fight poverty with profitability”, while Prahalad - who died in 2010 - was dubbed a “business prophet”. His theory did indeed prove prophetic; for many firms have successfully navigated the “bottom of the pyramid”, while simultaneously reducing the burden of poverty. Enter Unilever, which has historically managed to generate half of its sales within developing markets - in entirely ethical ways. Focusing on domestic products such as single-use shampoo sachets and water purification systems, Hindustan Unilever Limited's pioneering Shakti initiative trains local women as rural sales agents to sell its products door-to-door.

To date, Project Shakti has created and empowered more than 72,000 micro-entrepreneurs, and it has been extended to include men. “The question is, 'do you run this for society or not '” muses Paul Polman, Unilever's CEO. “The real purpose of business has always been to come up with solutions.”

A form of inclusive capitalism, serving the bottom of the pyramid brings business growth, profit and an immeasurable “give-back” to humankind which helps narrows the gap between rich and poor. Those areas of India which lack infrastructure have also become testing grounds for environmentally sustainable technology and products that enrich the wider world. In the same vein, BT, one of the British Asian Trust's partners, is at the forefront of using digital technology as a tool for empowerment. Our work together involves developing long-term investment in education and training and lifting children out of the poverty trap by equipping them with IT and engineering skills.

The transformative power of social impact investment is also highlighted by our upcoming $10-million Development Impact Bond (DIB), designed to improve learning outcomes for more than 200,000 marginalised children in Rajasthan, Gujarat and Delhi. In partnership with UBS Optimus Foundation, Michael & Susan Dell Foundation, DFID, Tata Trusts, BT, Comic Relief and the Mittal Foundation, the performance-based initiative aims to catalyse a system change that could transform the lives of millions of young people in India.

As international philanthropist and social innovator Sir Ronald Cohen stated: “What the British Asian Trust is doing in social finance is truly ground-breaking: it is capable of delivering vital social improvement at scale.” Elsewhere, other corporates are shaking up CSR in India through supply chain management. For example, clothing retailer New Look consults workers at every level to identify their needs, while also encouraging communication between employees and management. Furthermore, comprehensive staff training has improved skills and teamwork in its Indian factories.

In this way, CSR allows companies to build brands that staff - as well as customers - believe in. As employees play a vital role in day-to-day operations, internal engagement is just as essential as external impact. In the words of Sir Richard Branson: “It should no longer be just about typical 'corporate social responsibility' where the 'responsibility' bit is the realm of a small team buried in a basement office. Now it should be about every single person in a business taking responsibility to make a difference in everything they do, at work and in their personal lives.”

Being at the heart of the community is a fundamental guiding principle for any successful CSR strategy. The British Asian Trust works closely with the John Lewis Foundation, which in 2016 funded our Feasibility Study into issues contributing to child labour in Rajasthan. Following recommendations from the report, the John Lewis Foundation is now funding the business transformation component of our “Hotspots” programme, which aims to eliminate child labour in the city of Jaipur through targeted grassroots interventions. In addition, they have been supporting India's KATHA School of Entrepreneurship. Here, women, young people and other marginalised groups receive access to income generation schemes through vocational training and employment support.

While little attention has previously been paid to the CSR practice of consultancies and legal firms, this is another big area of change. Reed Smith LLP - the British Asian Trust's counsel and development impact partner - has won several awards for its CSR programmes, and Senior Partner Michael Skrein points out that his company has an “ethical responsibility to the communities in which we work, our clients, our personnel and the world in which we live, and want to live”. Legal expertise itself is a highly valuable commodity, which allows a company to stand out.

Drawing on all of the above, it is clear that a long-term, innovative CSR strategy is a business imperative which should not be overlooked. No longer can any firm afford to simply “tick boxes”. Now more than ever, consumers are drawn to companies that champion employee welfare, community progress and environmental sustainability. With businesses now forced to work harder to earn customer trust and loyalty, it is no coincidence that swathes of millennials are choosing to support those who act on their social and environmental responsibilities.

It is our firm belief that business and philanthropy can work together harmoniously in India, and as our Chief Executive Richard Hawkes, states: “At the British Asian Trust, it is in our DNA to think beyond traditional approaches; to be entrepreneurial and creative in our approach to achieve impact at a larger scale.” For this reason, partnering with the British Asian Trust in India, not only makes smart business sense, but also contributes to the greater good, today and for generations to come.

Abha Thorat-Shah is Executive Director (Programmes and Partnerships) at the British Asian Trust.

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