THE EVOLUTION OF CSR
All the universally accepted definitions of CSR underscore the impact that businesses have on communities and environment.
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Evidently, the concept of CSR has evolved from welfare activities (such as philanthropy, donations, charity, relief work and others) to the one that now incorporates corporate citizenship, strategic philanthropy, shared value, corporate sustainability and business responsibility.
GLOBAL STORY
1950- 1960s
The focus was on businesses with good deeds for societies at large. The drivers of changes were events, people, and ideas who were instrumental in shaping the emerging social changes.
1970s
Thinkers such as Archie Carroll propagated the change in thought which argued that ‘firms have responsibilities towards societies including economic, legal, ethical and discretionary.
1980s
Thomas Donaldson and Thomas W. Dunfee highlighted the ‘tactic social contract between the firm and society’ characterized by an enhanced responsiveness towards stakeholders.
1990s
CSR became a strategic issue focusing on
Freeman’s stakeholder theory. It started correlating with the definition that viewed it as a concept ‘whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders’.
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INDIAN STORY
CSR in India has traveled through different phases, such as community engagement, socially responsible production and socially responsible employee relations. It was more about philanthropic endeavors that were performed but not deliberated and documented.
Prior to Independence, it had a national character encapsulated within it that extended support to India’s freedom movement. CSR in India has now matured and incorporates global knowledge of CSR in its discourse.
Before 1947
The concept, through charity, was carried out by businessmen and philanthropists with a strong religious sentiment. CSR was deeply influenced by family values, traditions, culture, and religion, as also by industrialization. The wealth of businessmen was spent on social welfare, by setting up religious, educational and healthcare institutions.
Post 1947
The Gandhian philosophy of trusteeship was popular. Industrialists set up trusts for colleges, and research and training institutions. These trusts were also involved in social reform, like rural development, education, and empowerment of women.
Post 1991
Economic liberalization opened the floodgates for foreign investment. Entry of global players kick-started competition in the market and the global CSR standards motivated the local players to enhance their brand values and meet consumer satisfaction.
Post 2000
Global information sharing allowed the Indian government to incorporate the best practices that gradually made India the first country to mandate CSR. In addition to financial resources, the undertone has been focussed on partnership and the triple-bottom-line of engagements.
Post 2014
After the enforcement of new Companies Act, there has been a significant inflow of contributions by businesses towards socio-economic and environmental initiatives. Education, healthcare, livelihood and skill development remain the areas receiving a majority of the CSR funds.
Some major developments:
7,334 firms spent ₹8,803 crore towards CSR in 2014-15. In 2015-16, 5,097 companies spent ₹9,822 crore on social initiatives.
The idea of CSR has been brought to the forefront among the Indian business community by Section 135 of the Companies Act, 2013.
The Schedule VII of the Act places the community at the heart of all the activities and advocates integrating CSR into the core operations of a company while it also promotes transparency.
SUSTAINABILITY
Sustainability is a comprehensive approach for a business that aims at creating and maximizing long-term economic by keeping a balance of social and environmental aspects in a longer run.
CSR and SUSTAINABILITY are interchangeable concepts
Convergence of CSR and sustainability form the core of The Companies Act, 2013 (Section 135). The concept focuses both on shareholders and stakeholders through the social, environmental and economic objectives of a business. Traditionally, CSR is being increasingly used by corporations as a tool to address social and environmental issues, whereas sustainability focuses on a strategy that prioritises the long-term survival of a business connected to ecological, social and cultural systems.
Transforming a business completely sustainable may not be feasible for many. However, a mixture of CSR and sustainability can definitely deliver a measurable impact. Perhaps, the need for more strategic, systematic and structured approach for an integrated development can be addressed through an amalgamation of sustainable and socially responsible practices by the businesses.
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INCORPORATING SUSTAINABILITY
While aiming long-term business growth, integrating sustainability into business enables an organization to mitigate future risks and adopt scientific processes. A sustainable strategy enables environmental principles and socially responsible behaviour for all business decisions and is a central theme of a successful business. Businesses that fail to incorporate sustainability are unlikely to endure.
Most of the findings indicate the relevance of ‘stakeholder analysis and mapping’ among primary and secondary categories of stakeholders with a collaborative process of research, debate, and discussion from multiple perspectives to determine a key list of stakeholders across the entire stakeholder spectrum.
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