The Ethical Quandary Of CSR
Corporate social responsibility (CSR) is a noble endeavour, where Indian businesses allocate a portion of their profits to philanthropic activities, ostensibly for the greater good. Of course, amply aided by the formal regulations around it. However, beneath this facade of benevolence lies a complex dilemma that demands thoughtful analysis.
The evolution of CSR in India has been nothing short of remarkable. From its early days, where CSR was often seen as an afterthought or a regulatory obligation, to its current status as a powerful driver of social and environmental change, India has come a long way. The turning point came with the introduction of the Companies Act, 2013, which mandated companies meeting certain criteria to allocate a portion of their profits to CSR initiatives. This legal framework acted as a catalyst, encouraging businesses to think beyond profits and consider their impact on society.
Over the years, Indian corporations have not only embraced CSR as a responsible business practice but have also recognised its potential to create positive change. They have diversified their philanthropic efforts across areas like education, healthcare, environmental conservation, and poverty alleviation. Simultaneously, the concept of Environmental, Social, and Governance (ESG) has gained prominence, further emphasising the need for businesses to integrate sustainability into their core strategies.
Corporate social responsibility, in essence, is a commitment by corporations to prioritise social objectives over pure profit-driven motives. It represents a conscious effort to ensure that business operations do not harm society, nature, or its intricate components. In a global context, this ideal is often easier said than done.
In India, as in many parts of the world, numerous industries continue to jeopardise natural resources and human capital through environmentally harmful practices. From failing to treat industrial effluents before discharging them into the environment to the existence of what are sometimes referred to as "sin industries" – tobacco, alcohol, junk food, and gambling – that persist despite their detrimental impact on society and the environment, the challenges are manifold.
What makes this situation even more perplexing is that these very industries are some of the most significant contributors to CSR initiatives. They invest substantial sums in endeavours such as education, healthcare, traditional art, skilling and more. On the surface, this philanthropy paints them as responsible corporate citizens, but the question: are these contributions genuine acts of goodwill, or are they sophisticated attempts to divert attention from their persistent harm to society and the environment?
**"Trying to balance environmental irresponsibility with philanthropy is like driving a fuel-guzzling monster truck to plant a tree – it's a wild ride to a green conscience!"
Consider the example of tobacco manufacturers, who, under regulatory pressure, have been forced to display warnings about the health hazards of smoking on their products. Despite decades of such warnings, smoking habits remain largely unchanged. It raises the question of whether CSR contributions from these industries genuinely promote social welfare or are they primarily exercises in shaping public perception while business practices and societal objectives remain unchanged.
Although these industries may argue that they operate within local laws and regulations, the ethical implications cannot be ignored. Oil companies and chemical industries, for instance, often tout their "environmentally conscious and eco-friendly" practices. Yet, upon closer inspection, some of these claims may be mere examples of "greenwashing," where the appearance of environmental responsibility masks the reality of their operations.
As responsible inhabitants of this planet, we must confront a fundamental question: can we demand ethical and moral integrity from corporations, transcending the confines of legal compliance and regulatory checkboxes? In a rapidly changing world where environmental consciousness is increasingly vital, the Indian market finds itself at a crossroads.
India's rich history and cultural heritage have, in many ways, embodied a profound commitment to true Corporate Social Responsibility and genuine Environmental, Social, and Governance (ESG) practices. For centuries, altruism and philanthropy have been intrinsic to Indian culture, embodying the heart and art of giving back to society. Rooted deeply in India's rich cultural heritage, concepts like "daan" (charity) and "seva" (selfless service) have underscored the importance of compassion and community welfare. Throughout history, Indian traditions, guided by principles of "dharma" (duty) and "ahimsa" (non-violence), have instilled a profound sense of social responsibility.
However, in the context of modern businesses, it is important that these values are upheld genuinely, rather than being exploited for personal gain or mere compliance with regulations for taxation benefits. Today's businesses must strive to authentically embrace the ethos of social responsibility and ethical practices, recognising that true philanthropy goes beyond legal obligations and taxation incentives, aiming instead for meaningful contributions to the betterment of society.
It is a call for reflection not only by businesses but by society as a whole, urging us to ensure that philanthropic actions are not mere gestures, but genuine steps towards a more responsible and sustainable future. In an ever-evolving world where environmental consciousness has taken centre stage, the Indian market stands at a pivotal juncture. This is a clarion call for introspection, not only for corporations but for society at large. It impels us to ensure that philanthropic actions are not superficial gestures but authentic strides toward a more responsible and sustainable future. As India continues to evolve economically and socially, this deep-rooted heritage serves as a powerful reminder of the enduring significance of ethical and responsible business practices.
Dr. Srinath Sridharan - Author, Policy Researcher & Corporate Advisor.
X : @ssmumbai
