Beyond Corporate Philanthropy: How CSR makes a Meaningful Impact

“CSR is not a one-time program, but a culture and a way of doing business that will generate a lasting impact.” – Paul Polman, former CEO of Unilever

Corporate Social Responsibility (CSR) has gained traction in recent years and has come a long way since its inception. Companies back then began donating to charitable causes demonstrating their commitment to societal issues. The purpose then was to encourage businesses to take a more proactive and responsible approach to leave a lasting impact on society and the environment. This involved initiatives such as philanthropy, environmental conservation, ethical sourcing, and employee welfare programs.

Today, CSR has evolved into a broader concept that includes sustainability, diversity and inclusion, responsible governance, and other areas that have a significant impact on society and the environment. The transition has been 360 degree and has undergone a complete overhaul. What started as a philanthropic endeavour by companies has now become an essential part of business strategy, encompassing social and environmental considerations in addition to economic goals.

While there are many different approaches to CSR, ultimately, the goal is to create a positive impact on the world. This impact can take many forms, from reducing the carbon footprint of a company’s operations to improving the lives of the communities in which they operate. Ultimately, the impact of CSR is what sets it apart from traditional business practices, making it a powerful tool for creating a better world.

According to the Ministry of Corporate Affairs, the total CSR spending by companies in India was Rs 25,714.65 crore in the financial year 2020-21 in comparison to last year spending, which was Rs 24,954.78 crore which represents a round about 3% increase in spending. The top sectors that received CSR funding in India in 2020-21 were education, healthcare, rural development, environment, and disaster management.

It presently has become the talk of the town and is looked upon as a significantly relevant concept in businesses even today. It is company’s responsibility towards the community beyond its core business operations. In fact, some companies are going beyond the mandatory 2% spending and allocating more funds towards CSR initiatives to create a greater impact on society. One such example was Mr Jamshedji Tata. In 1892, he established the JN Tata Endowment, which provided scholarships to Indian students to study abroad. He also donated funds for the establishment of the Indian Institute of Science in Bangalore. He established the Tata Memorial Hospital in Mumbai in 1941, which is now one of India’s leading cancer treatment centres. His vision for corporate social responsibility was well ahead of its time and he proved that the sole purpose is just to make an impact.

CSR is often viewed by businesses as a compliance mechanism due to regulatory pressures, which can be counterproductive to its intended purpose. When companies perceive CSR solely as a legal obligation, it shifts the focus away from creating meaningful impacts on society and the environment. This approach defeats the purpose of CSR, which is to encourage businesses to act as responsible and ethical actors beyond their profit-making goals. It is essential to recognize that voluntary and proactive CSR initiatives can bring about significant social and environmental benefits, and regulatory compliance should not be the only driving factor. By viewing CSR as a compliance mechanism, corporations are limiting their ability to create lasting positive impacts on the community and the environment.

Investing in programs that support education, healthcare, and environmental sustainability, companies aided in improving the quality of life for residents and help build stronger, more resilient communities. Some classic examples of CSR initiatives in India that left a lasting impact:

• Tata Group’s Clean Drinking Water Project: Tata Group, one of India’s largest conglomerates, initiated a project to provide clean drinking water to underserved communities in rural India. The project has installed over 8,000 water purifiers across the country, providing access to safe drinking water for more than 6 million people.
• Wipro: Wipro’s initiatives include the Wipro Cares program, which supports education, healthcare, and other social causes, and the Wipro Earthian program, which promotes environmental sustainability. It also launched several innovative CSR initiatives, such as the Wipro Applying Thought in Schools program, which aims to improve the quality of education in India.
• Reliance Foundation’s Rural Transformation Programme: The Reliance Foundation, the philanthropic arm of Reliance Industries, has launched a Rural Transformation Programme aimed at providing comprehensive support to underserved communities in rural India. The programme focuses on areas such as healthcare, education, livelihoods, and infrastructure development, and has impacted over 12 million people across 15,000 villages in India.
• Infosys Foundation’s Healthcare Initiatives: The Infosys Foundation, the philanthropic arm of Infosys Limited, has launched several initiatives aimed at improving healthcare outcomes in India. These initiatives include the construction of hospitals and clinics in underserved areas, the provision of medical equipment and supplies, and the training of healthcare workers. To date, the foundation has impacted over 2 million people across India through its healthcare initiatives.

CSR is a crucial aspect of modern business, with the aim of creating a positive impact on society and the environment. Companies that prioritize CSR are not only contributing to the betterment of society but also building strong yet resilient relationships with their stakeholders, enhancing their reputation and ultimately, creating long-term value for their business. From the examples we have seen, it is evident that CSR has the potential to create a significant impact on the communities and society at large. The impact shall reflect the changing expectations of society, as well as the challenges and opportunities presented by the global economy and environment.