On April 1, 2014, Corporate Social Responsibility was legally mandated by law under Section 135 of India’s Companies Act. While deliberating on the Bill Sachin Pilot, the then Corporate Affairs Minister, stated in no uncertain terms that, the idea of a CSR program should not only be to contribute to one sector of society just because the law mandates it. The CSR initiative should attempt at nurturing society over a well thought out period of time. What the Minister described is the basic tenet of a successful CSR initiative as we know it today. It also brings to the fore the question, ‘what sets my company’s CSR initiative apart from the rest’? The answer to which is; a noteworthy CSR initiative surpasses mere tokenism and looks to position the company as a leader on the social issues it works for and sets out to build a programme that is sustainable over the years.
Building a sustainable and effective CSR Program may seem daunting. Here are five pointers to remember that may help you as you embark on re-thinking your CSR approach:
1. ALIGNMENT: When one is charting a CSR plan, it is important to build the strategy around the core competency that the company offers. A company’s unique selling proposition, knowledge and solutions can bolster a social cause?’ A great example of alignment can be seen in the way Relaxo Foundation, a leading footwear brand in India, contributed twenty five thousand pairs of slippers to Delhi sanitation workers at the peak of COVID-19 in India. It not only addressed a key area of hygiene and sanitation for front-line workers, but also elevated the brand which specialises on slippers. Ramesh Kumar Dua, President of the Relaxo Foundation said, “Due to the nature of their work, it is critical for them to have easy-to clean and comfortable slippers”.
2. VALUE: While millennials are becoming more and more brand conscious, widespread digital connectivity has also made customers extremely aware of social rights and socially responsible brands. This hyper conscientiousness has made it all the more imperative for a company to re-affirm the core values of both the customer and employees. A great example of a company aligning its CSR approach with the values of its consumer base is that of Ikea. As of 2019, IKEA is the seventh most valuable retailer in the world. Owing to its exceptional CSR strategy, IKEA’s example is one for the books. Their customers pointed out how old furniture and other home goods were being discarded apathetically and ending up in landfills, something that can have dire consequences for the environment in the coming future. IKEA decided to swing into action and initiated the ‘Sell-Back’ Program, that allowed customers to return their old furniture and homegoods, that would otherwise be discarded, to be recycled. This Program displayed to the average environmentally conscious customer that IKEA actively seeks to improve its global footprint, thus, making them the most obvious choice over their competitors.
3. SENTIMENT: A recent survey conducted by PwC titled, ‘Millennials at Work- Reshaping the workplace,1’ states that more than half of the millennial workforce world-over are attracted to employers because of their CSR position. 56% said that they will consider leaving an employer that did not have the values they had expected. According to a CECP led ‘Giving in numbers2’ study that focuses on corporate social strategies, it was found that the role of employees in CSR is on the rise. This changing sentiment amongst the workforce around the world warrants the question, “Will my CSR Strategy enhance important business activities, such as employee recruitment and retainment?”
4. CREATIVITY: While looking to work on a strategy, it is also helpful to keep in mind that the blueprint we set out to introduce inculcates design thinking and seeks to answer the question, ‘does my strategy include elements that are innovative?’ This simply means that your company’s definition of corporate giving needs to expand to embrace new tactics that go beyond the ‘run-off-the-mill’ ideas. Your company can see CSR as an innovation driver and invest in initiatives that are cutting-edge while being leading agents of change in the fields of research, development and implementation. Most recently, the one example of a company using design thinking as a part of their CSR program can be seen in IBM India. Switching their CSR program to include virtual volunteering as the COVID-19 pandemic hit India proved to be a gamechanger for the tech company. This simple switch to virtual volunteering to adjust with the unprecedented times saw an increase of over 60% additional IBM employees volunteering their time towards the company’s CSR mandate that works towards improving education in India. With most schools switching to online education, these volunteers actively created audio books for the blind in 4 languages- English, Hindi, Kannada and Tamil.
5. ANALYSIS: The final point to remember while forming a sustainable strategy is to develop a framework that measures your impact. To put it simply, it should seek to answer the question, “how will I quantify the impact of my CSR strategy?”. An effective method to measure the ROI of the CSR Program is to remember the 5 R’s; namely- Revenue, Reputation, Recruitment, Retention and Relationships.
· Revenue: The key driver for Revenue or strategic alignment as it is called measures how your CSR program has driven cost savings, witnessed new customer acquisition as well as customer retention.
· Reputation: The key driver for Reputation while measuring ROI on CSR is how the program has enhanced the company’s reputation and brand awareness.
· Recruitment and Retention: The main goal of Recruitment is to talent acquisition and seeks to measure how the CSR program attracts top talent to work for the company. In the same vein, the key driver for Retention is internal engagement where the main goal of the CSR program should be to improve employee retention, engagement and satisfaction.
· Relationships: Lastly, to measure the impact of the CSR initiative, studying the partner collaborations and the meaningful business relationships that it has brought about is a good measure of success.
A successful CSR Program may be hard to build, however stepping away from mere lip service and aligning corporate efforts with revenue-generating activities will ensure that the CSR program is strategic, effective and sustainable.
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