Why has corporate social responsibility (CSR) become so important for Indian businesses? Many believe that the recent tweak to India’s corporate law – companies that earn more than Rs 500 crore (roughly $75 million) or are worth more than Rs 1,000 crore ($151 million) must now devote 2% of net revenues to CSR programmes – has ushered in this change. I disagree.
Many large Indian corporations have devoted significant resources and energy to social causes well before the change in the law was even suggested. What has happened, I believe, is that Indian businesses increasingly understand that they must have a motive beyond profit. This, many say, is often critical for the attainment of the corporate objective.
I got thinking about all this during a recent trip to Bangalore – India’s information technology capital – which I had undertaken to apprise clients of MSLGROUP India’s content, and research and insights services. I met clients across a few sectors: technology, infrastructure and financial services. I was struck by how many of them spoke to me of their CSR work and their need to communicate it better to the beneficiaries, of course, but also to their employees.
Education, health and women’s empowerment were some of the themes of the CSR projects. I had been briefed about similar projects just days earlier in Mumbai by a potential client, one of India’s largest corporations.
As it turned out, I was invited by one of Mumbai’s leading B-schools to judge a CSR plan contest on the day I returned from Bangalore. It was surreal to go straight from conversations about CSR with clients to Mumbai University’s convocation hall, where participant after participant urged businesses to take up social causes and presented plans they could implement.
The coincidences didn’t end there. The chief guest at the event was Meera Sanyal, who was CEO and chairperson of the Royal Bank of Scotland in India and who had contested India’s parliamentary elections in 2009. She had taken the decision to do so after the November 26, 2008, terror attacks in Mumbai. Dismayed at the political reaction to the terror strikes, she said there was an urgent need for people who cared deeply about society to enter public life and take up social causes.
To me, it’s clear that businesses will not be able to separate themselves from the challenges faced by the communities in which they operate. Their social contribution – and I don’t mean the amount of money they give away – will be an important factor in their business success.
When I spoke at the event, I mentioned what our clients had been telling me and said I was glad that, as future managers of India Inc, the students thought CSR was important too. I
recently discovered that PurPle, MSLGROUP’s global offering that connects community and business objectives, is partly inspired by the CSR movement in India. This only underscores my belief that CSR will be a major opportunity in my country. And I don’t mean in the distant future. To use a much abused cliché, the future is now.