Should social impact be baked into how business is conducted?

'The best a man can get’. From a branding tagline created 30 years ago, Gillette has today turned this into their vision for social responsibility that reads ‘The best men can be’. In their words “…as a company that encourages men to be their best, we have a responsibility to make sure we are promoting positive, attainable, inclusive and healthy versions of what it means to be a man… Gillette is committing to donate $1 million per year for the next three years to non-profit organisations executing programmes in the United States, designed to inspire, educate, and help men of all ages achieve their personal ‘best’ and become role models for the next generation.”

Impact, more than spend, has become the changing face of CSR across the globe. What does that augur for India Inc.? Let us cut back to 2011. The Ministry of Corporate Affairs released National Voluntary Guidelines (NAG) for the social, environmental and economic responsibilities of business. Its focus on inclusive growth and equitable development is what constitutes the CSR clause of the Companies Act 2013, today.

This raises an important question. Should CSR be a regulatory mandate on how profits are managed after they have been generated? Or should organisations voluntarily factor a triple-bottom-line approach of people, planet and profits? In other words, should social impact be baked into how business is conducted?

Into its sixth year of CSR compliance, Indian businesses have spent close to a total of $8 billion on development projects. This is a significant amount that requires sound leadership and governance, and deep impact analysis. Initiatives must be driven by teams highly proficient in CSR – and not as ‘tick-in-the-box’ exercises. Companies’ CSR programmes must address the scope of their agenda and build effective models of engagement with existing community institutions to co-create impactful programmes.

‘Educate, Empower and Enrich’ – this is the raison d’etre of WNS Cares Foundation (WCF), our dedicated CSR arm. We have co-created numerous educational, career-focused and personal development initiatives to better the lives of more than 100,000 lesser-privileged children and youth globally. The WCF Treasure is aligned closely with the vision of ‘Digital India’ through computer literacy reading and real-life skills programmes with mobile libraries, and academic support through our knowledge hubs.

I firmly believe that social responsibility is an ethical framework and corporates have an obligation to act for the benefit of society. Literacy, food, environment and infrastructure must feature in their CSR activities and investment list. A more focused approach to action is needed to integrate society’s needs, government programmes and CSR funds.

The government’s plan for a social exchange to fund local initiatives is a welcome move. So are the efforts to bring transparency to the deployment of CSR. However, punitive measures on non-conformance to CSR mandates could be confused by practitioners as new mandates seeming to focus more on spending than on impact. We need to embed social metrics around the return on investment of CSR into CFOs’ accounting reports – metrics that cover employee engagement, client collaboration, corporate goodwill and more. Only then will the voluntary aspect of CSR find true meaning.

Imagine if we could focus all corporate action on a few high impact areas and actually see the landscape changing due to the impact of $8 billion spent on those areas.

In recent years, CSR has moved from simple philanthropy to assuming social responsibility for an equitable society. Take PepsiCo and Coca-Cola’s investments in water treatment facilities and in creating zero-waste footprints for their products. Or how Raymond has created 30 lakh work hours of employability for khadi artisans. Or how Hindustan Unilever’s water conservation project now stretches across 51 districts. There are many examples of companies spending more than the mandated two per cent on CSR programmes to make a profound impact through shared values.

Business-driven CSR programmes also engage employees to become the organisation’s biggest advocates. Millennials will comprise the majority of our workforce in the coming years. For them, how their employers improve the world around them – and being part of this social value creation trumps monetary considerations. Environmental, Social, and Governance (ESG) rank as a priority for shareholders and they look for robust social programmes that create long-term value. McKinsey estimates that India’s market for purpose-driven finance could touch $6-8 billion by 2025.

We need to take stock of what has been achieved and what can be done in the future for maximum impact. Social ventures also hold the promise of future career choices for next-gen professionals. Undoubtedly, India has the potential to lead the world in creating new standards and social metrics for CSR.