Sustainability and CSR’ is the new mantra in boardrooms across the globe. The causes maybe be good, but how many pay attention to the effects? Moreover, how are consumer brands, which are present in almost every part of consumers’ lives, using this opportunity to speak about their CSR initiatives, which could also help strengthen their presence and growth? With the help of experts and a few do-gooders, Simran Sabherwal takes a look at what goes into the creation and implementation of a solid CSR initiative
At the recently concluded Global CEO Conference on ‘Navigating a VUCA World’, Paul Polman, Global CEO, Unilever, spoke about the Anglo-Dutch giant’s ambitious vision to double its size while reducing its overall environmental footprint and increasing its positive social impact. He also said that when businesses are run with a deeper purpose, consumers look to share your vision thereby helping the business grow. This line of thought and the special emphasis on Corporate Social Responsibility (CSR) has gained credence in companies across the world as they look to grow their business and sustain it by involving the environment around them.
But what does CSR mean?
The European Union definition of CSR in the business and social context is, “a concept that an enterprise is accountable for its impact on all relevant stakeholders. It is the continuing commitment by business to behave fairly and responsibly, and contribute to economic development while improving the quality of life of the work force and their families as well as the local community and the society at large…”
While many Indian companies engage in social welfare projects, the Clause 135 of the Companies Bills 2012 encourages companies to spend 2% of their Profit After Tax (PAT) on CSR. Though spending this amount is not compulsory, this clause makes it mandatory for the Board to give reasons why the amount has not been spent on CSR.
Getting it right
Sustainability — this is the keyword when it comes to CSR. But are companies and brands getting their CSR strategy right? Are they communicating effectively about their efforts to their concerned stakeholders, particularly their end consumers? “Sustainability involves creating and maintaining a product, service, or business identity that reflects special added value in terms of environmental and social benefits,” says Ashish Mishra, Managing Director, Interbrand. In this context, we take a look at the five key parameters companies should ideally follow when they devise their CSR strategy.
1. Building the brand connect
This is the first and most critical aspect to be kept in mind while deciding on a CSR initiative. However, some companies take up an issue based on current emotions (education, women and child welfare), instead of their core competencies. Priya Naik, Founder & Joint Managing Director, Samhita Social Ventures, which advises companies on their CSR initiatives says, “We tell companies that as long as you are able to identify a CSR strategy that is completely aligned with your organisation or your products and services, it’s all good. That is the first rule in establishing brand connect.”
The main focus of Edelweiss Financial Services’ CSR programme has been in the field of education, livelihood and women’s empowerment. “Our approach to a better livelihood consists of focusing on programmes which help raise the economic and social strata of people living below the poverty line,” says Vidya Shah, CEO, EdelGive Foundation of Edelweiss Financial Services. “We also focus on seasonal migration of workers, better governance, access to credit and financial literacy and inclusion.”
Experts also say that brands need to involve their community, especially labourers, as part of their CSR activity. NR Group, the makers of Cycle Pure Agarbathies, has a dedicated team who train women in agarbathi rolling and bamboo splitting in rural areas. More than 50,000 women have been trained so far. “Another initiative, Project Unnati, promotes schooling of the workers’ children of the NR Group with low family income. The project takes complete care of the educational needs of these kids,” says Arjun Ranga, Managing Partner, NR Group.
2. Treat it as a business vertical
Experts also say that CSR should not be looked upon as charity but as an opportunity to grow businesses. “Many corporates are trying to develop it as a different business vertical,” says entrepreneur and CSR Professional Harsha Mukherjee. “It is not about donation, but growing the community with your business.”
This key business objective needs to be identified at the very beginning before a CSR strategy is even planned out. Godrej, for instance, believes in the concept of share value which looks to undertake activities that are not only valuable to society, but also for Godrej and its stakeholders in the long term. Dr Rakesh Sinha, Chief Operating Officer, Godrej Consumer Products Ltd, says, “If we undertake any activity or develop any product, (for example, to prevent malaria), it should be profit making for Godrej, or atleast not loss making. Unless there is value to Godrej, it is difficult to sustain in the long run.”
Namita Vikas, Senior President & Country Head, Responsible Banking & Chief Sustainability Officer, YES Bank says, “For YES Bank, CSR and sustainable development are not just ethical imperatives but a sound business decision. Since inception, the bank has been focusing on mainstreaming CSR and sustainability within its business operations and products and services. Our emphasis has always been on establishing innovative approaches moving away from philanthropy-based CSR, and focusing on the triple bottom line ethos of People, Planet and Prosperity to create enduring value, comparative advantage and CSR and sustainability leadership.”
3. Forming partnerships
Engaging the community also means collaborating with other organizations that function in the vicinity of your operations. Therefore if three or more companies join hands, each taking on complementary intervention based on their core competencies, which adds value not only in the comprehensive work done but also in the pooling of resources. However, while experts bat for collaborative engagement most corporates look at playing a solo game on the premise that while collaborations would work on specific interventions, a long-term collaboration would not be feasible as each company has their own CSR agenda.
4. CSR communication for better brand visibility
While Indian companies have adopted various CSR initiatives, stakeholders especially the end consumers, are unaware of what companies are doing on this front. This information is, in a majority of cases, restricted to internal stakeholders, employees via emails, internal communication, found in the annual report or spoken about in conferences.
The reason for not communicating about these efforts is attributed to the Indian ethos/culture of not talking about the “good work” done. Experts however feel, that this is a critical piece in the CSR jigsaw puzzle that is missing and effective CSR requires effective communication to all concerned stakeholders. The significance of this can also be gauged by the fact that when your core competency is linked to a needbased initiative, this could have a direct impact on the brand positioning. This lack of information extends even at the industry level, as at times companies within the same industry have no idea what their counterparts are doing.
Harsha Mukherjee says, “Informing your stakeholders of the actual CSR activities is a way of assuring them that you are a clean company. A consumer may not want to be associated with a company that is seen otherwise. By educating people you look to attract tomorrow’s consumers to your products and services. ”
This is also reiterated by Naik who adds, “When companies don’t talk about their CSR initiatives, the alignment with the brand doesn’t happen. This is a cardinal sin as aligning CSR activities with brands enhances companies reputation significantly. If you start communication early on, it is a great brand-building strategy, because from the very beginning you are getting key stakeholder participation and if you build in some form of integrated branding with CSR, it is even better.”
However, many brands that choose not to speak about their CSR directly, may do so indirectly by focusing on their products and services; such as being energy efficient, ecofriendly, safe etc. In that case, care must to taken to ensure that brands use this platform wisely, without harping too much about their achievements that might work against their favour.
Now-a-days, Public Relations (PR) agencies encourage clients to speak about CSR with the focus being on the cause and showcasing human stories that result from the programme. “A well-thought-out CSR programme is very ‘PR-able’, but it would be in bad taste to tom-tom it,” says Jaideep Shergill, CEO, MSLGroup India. “A well-implemented, sincere effort leads to great PR organically. When it comes to showcasing CSR, brands must walk a thin line. If the commitment to a cause is true, its energies must be focused on the cause rather than on covering themselves with glory. Yet CSR is a strong brand-building tool. I think brands and agencies are still learning to walk that tightrope.”
It has also been noted that brands which innovate are finding ways to reframe trends, turning potential growth inhibitors into competitive advantages. This is particularly seen in the auto industry where the focus is on addressing changing user needs like safety features, fuel efficiency and being eco-friendly, helping auto companies make a difference, particularly to the environment, while boosting their bottom lines.
Interbrand’s Ashish Mishra says, “In our research around consumer perception of brands’ sustainability efforts, we’ve found that it’s a small but significant influential factor that, all other attributes being equal, a perception that a brand is a good employer, good to the earth, practices what it preaches, and otherwise displays the characteristics of a good corporate citizen, it will be chosen versus a competitor. At the end of the day, having the power to influence choices translates into money.” He adds,“The key to that power is the brand, its image, reputation, and the multitude of messages, gestures, and efforts that build the collective perception of who it is, what it stands for — and how trustworthy it is. Today, it’s no longer enough to be “less bad” than competitors.”
5. Tying up loose ends
This is another aspect that is overlooked by most brands. Brands have been known to sought public aid (donations) to support a certain cause and then failed to revert back to the public on what has been the outcome. This creates a huge gap and experts say that once brands reach out and engage with consumers, they need to communicate on whether the objectives have been met. This is the loop that brands usually tend to not close. Communicating to all stakeholders at every stage helps in enhancing the brand image.
BRANDS THAT LEND MORE THAN A HAND
Feedback: simran.sabherwal@exchange4media.com
