The Approach To CSR Is Transactional, Not Transformational: Sudhir Sinha, CEO, CSR Inc.

In the current CSR landscape of India, we see a glamorisation of CSR and CSR being done just for compliance’s sake. There is a need for CSR to be internalized and integrated into the organizational structure of doing business responsibly. On that note, Sudhir Sinha, CEO of Centre for Sustainability and Responsibility Inc. launched CSR Satyagraha on 2nd October from Sabarmati Ashram to save CSR from fatality. In an exclusive interview with BW Businessworld, Sudhir Sinha, CEO of CSR Inc. discusses this transformational movement and the problems which underlie with CSR being practiced today.

What are the fallacies and faults with the current ways CSR is being pursued by Corporates?

CSR in India is dying if not dead. The current understanding and practices in CSR, by and large, are not in sync with the ‘Spirit of CSR’ which should principally benefit the poor, the marginalized, the vulnerable and the weakest section of society. It won’t be improper if I say, “CSR is practiced irresponsibly”. The main reason behind all of it is the lack of serious ‘intent’ for CSR among corporates. And, since the intent is lacking, CSR has not been internalized yet and integrated into the organizational culture of doing responsible business. However, post-April 2014 since CSR has been made mandatory by law, companies, in general, are found directing their CSR responses confined to either comply or explain mainly.  

The approach to CSR is ‘transactional’; not ‘Transformational’. It’s working thoughtlessly. CSR in practice is mostly a demonstration of an unstructured philanthropy. CSR, in a nutshell, is found insincere and lip singing more than making or creating a lasting impact.

The ‘CSR spend’ is unfortunately considered the main yardstick for the measurement of CSR performance. Basis spends, companies are rated and awarded by media and some independent agencies. In fact, a majority of these agencies are running a separate business out of it and causing harm by fabricating false hype and hopes for & around CSR in India. Glamorisation and commercialization of promotional initiatives of CSR by any means are wrong and deceptive as they have been found to be often misused, rather abused at times.

But, the fact of the matter is that companies alone can’t be held responsible for let CSR die. Other stakeholders such as governments, consultants, big NGOs, CSR leaders/managers and agencies (rating, awards, and reporting) are equally responsible for causing harm to CSR.

However, there are some companies which are really good and genuinely trying to discharge their social responsibilities while addressing the core issues and pressing needs of communities. But, the number of such companies is very less. This is true for other stakeholders too.

What is CSR Satyagraha and what is its importance?

I am pained and can’t see CSR dying. There are many people like me from across the spectrum who too feel it and resonate the same concern. Being a humble follower of Mahatma Gandhi, I took inspiration and courage from Bapu and took a resolve to initiate a reform process for making CSR work to its core values and principles. This is the genesis of CSR Satyagraha. It was launched this year from Sabarmati Ashram on 2nd October. 

CSR Satyagraha is a Gandhian way to ‘secure’ an overall ‘Transformation’ in the ways CSR is currently understood and practiced in India. Satyagraha is an effort to save CSR from fatality. It is a quiet but an assertive movement for bringing positive change in the mindset of stakeholders of CSR for adopting improved principles and approaches to CSR that enable CSR to meet its core objectives and make sustainable impacts. Satyagraha is a peaceful and non-violent war against insincerity, glamorization, and commercialization of CSR. Therefore, Satyagraha for CSR is nothing but seeking all stakeholders to holding steadfastly to the core principles of CSR, doing right things only and doing them right each time and every time.

What does CSR Satyagraha hope to achieve?

Satyagraha will influence the policymakers and assert for required changes/modifications in the Act/Rules to make the Act comprehensive, become user-friendly and work better. It will do advocacy for replacement of “either comply or explain” policy of the Act with “to comply” only. Further, there is no one definition of CSR in India. Satyagraha shall, therefore, work for getting CSR properly defined in the Act for a uniform understanding and mandating the spirit of CSR to work only and only for the poor, the deprived, the underserved and the underdeveloped communities. Satyagraha will work for stopping the ‘misuse’ and ‘abuse’ of CSR of all forms.

Since CSR in India is largely ‘transactional’, Satyagraha will get this model discarded and replaced with ‘Transformational CSR’ for making lasting impacts that enable communities to become ‘resilient’ and ‘sustainable’.

Satyagraha will discourage and eliminate the growing ‘Five-Star’ culture from CSR which has infected the domain very badly. It will constantly work against the glamorization or commercialization of CSR. Satyagraha shall stand for ‘true values’; shall take a firm stand against unprofessional consulting firms and unscrupulous agencies (awards, rating & reporting). It will balance the dominance of big NGOs; work more for grassroots NGOs, engage with them, increase their capacity to partner with companies on CSR.  

CSR Leaders/Managers are critical stakeholders of CSR. They need a different orientation, commitment and direct connect with communities. Satyagraha will engage with CSR leaders/managers and help them make CSR a true passion than a profession for them, and let their passion drive the profession. 

What are the core values and principles towards which CSR should work for?

As the fundamental principle, CSR must work as ‘catalytic agent’ for securing a permanent change in the ‘conditions’ that are responsible for poverty, hunger, disease, illiteracy, unemployment, erosion of socio-cultural capital and socio-economic inequality and injustice. Convergence, partnerships and exit policy are operational principles for the sustainability of CSR. CSR must work for achieving ‘Shared Value’ for companies and communities both. 

Satyagraha will encourage companies to adopt and embed Mahatma Gandhi‘s ‘Trusteeship’ model of doing responsible business. Sincerity, Transparency, Honesty, Accountability and Lasting Impact (STHAL) will be made unwavering principles and values for all stakeholders engaged in CSR.

What are some of the malpractices by the stakeholders of CSR?

Malpractices and wrongdoings in CSR are found happening at every level of stakeholders. At the government/policy-making level, ambiguities in the Act are allowing malpractices to happen legitimately. Example: The clause, “Comply or explain” is the biggest excuse and impediment for the implementation of CSR Act. A large number of companies are finding it as the main tool for complying with the ‘letter’ of the Act without meeting full commitment. It is learned from a newspaper report that above 1000 companies were issued notices by RoC for non-compliance with regard to CSR reporting and of which some 160 companies were stated to be facing penal action under the Act. Further, in absence of the provision for the statutory audit of CSR spend in the Act, some companies are reported (unconfirmed) to have tie-ups with some unscrupulous NGOs who take CSR endowment and give back 80-90% of that fund in cash to companies without doing any development work. Further, companies are taking advantages of the broadness of thematic areas under Schedule VII and are accordingly spending on projects that are in sync with the ‘spirit’ of CSR.

Similarly, other stakeholders are also misusing as well as abusing CSR for their commercial and other gains. Because of the political interference, the freedom, type, and quality of CSR projects are significantly impacted in PSUs. Many consulting agencies who lack knowledge, exposure and competencies are managing a big percentage of CSR fund which is a worrying trend. Over-domination of big NGOs for the implementation of CSR projects is yet another disturbing development. Off late, some agencies are found to be engaged in doing ratings and giving awards without doing them scientifically, methodically and ethically. It’s a big money-making business for these agencies. Further, in the name of knowledge dissemination, five-star summits/conferences in megacities are common activities of CSR which are yet another source of money making for organizers/agencies through sponsorships and participation fees. Does CSR need mega-events to be organized so frequently and that too in megacities only? 

How can the CSR landscape in India be improved?

Since CSR is now guided by a law in India, the Act relating to CSR, therefore, has to be made more comprehensive by including in it all stakeholders of CSR. It should make further changes/amendments and therefore include more stinging provisions such as (a) mandatory financial and social audit, (b) deletion of “explain” part from “comply or explain” clause, (c) make ‘Spirit of CSR’ the driving agenda, (d) regulating promotional activities and CSR consulting, and (d) introducing new clauses that fix accountability on all the stakeholders of CSR, instead companies alone and seek transparency from all of them, etc.  

Apart from the legal reforms, some other important reforms are also required for the improvement in the CSR landscape. CSR professionals are the critical stakeholder group and key to success. They all come from a diverse educational background and remain largely unexposed to conditions, a mandatory requirement for CSR. They need adequate training and exposures. Therefore, while B-schools and Indian Universities can be stimulated to run degree/diploma courses in CSR with a common curriculum, some field level NGOs should be accredited to run grassroots training for CSR practitioners.   

What is CSR Satyagraha's intervention in the current CSR landscape of India?

CSR Satyagraha was just launched this year on 2nd October. Therefore, not many interventions have begun, they are all in pipelines. Satyagraha, as per the plan, will intervene with stakeholders of CSR and engage with them for bringing changes in their thinking and practices. Satyagraha will first engage with the Govt. of India for effecting some changes/modifications in the Act which are likely to make a positive impact on companies and other stakeholders. On the other front, Satyagraha will engage with companies and their CSR leaders/managers and seek them bring transformational changes in their planning, processes, and approaches of CSR.  However, CSR Satyagraha remains flexible with its approaches and is left to evolve with time.  

Anurit Kanti

BW Reporters The author is correspondent at BW Businessworld, he has a keen interest in sustainability and environmental economics