Till about middle of the year 2008, Corporate Social Responsibility
was the buzzword with every company vying to do its bit for the
society. The end of last year and the beginning of the year 2009
seems to have brought only recession blues for the companies. Hardly
a day goes by when we do not read or hear news about the global
economic meltdown and the resultant hardships people are witnessing
on account of losing jobs and incomes. Social responsibility then
becomes a fancy frill that is best kept for the good times.
There are several theories floating around as to what caused this
recession and some of the arguments keep focusing on the theory
of lack of responsibility on part of the companies combined with
the individual greed that has resulted in the suffering of laying
off people around the world. An important question that comes to
the mind then is: had the businesses been responsible, would we
have even landed in such a situation?
Do companies have to be socially responsible?
Economic recession is taking its toll even on the biggest of charities
like Bill and Melinda Gates Foundation or even faith based charities.
However, as Bill Gates in his annual letter has rightfully said,
“The wealthy have a responsibility to invest in addressing
inequity. This is especially true when the constraints on others
are so great. Otherwise, we will come out of the economic downturn
in a world that is even more unequal, with greater inequities in
health and education, and fewer opportunities for people to improve
their lives.” If companies want a long life, they have to
be socially responsible. We need not necessarily look at the west
for role models. The Tata Group of Companies has set benchmarks
for sustaining the profits and respect by being socially responsible.
Hence, companies can chose to not be responsible at the cost of
their own longevity.
CSR, as a theoretical concept, is less than a decade old but is
being defined and strategised and has come to be defined only recently.
While companies in India are taking a hard look at their plans,
restructuring budgets and cutting costs, they are firmly holding
on the commitments they have made to the on-going projects supported
through Corporate Social Responsibility. Recession is also the time
when the focus is shifting on not just looking at it as a fancy
frill but as an essential business strategy which will add value
to all the stakeholders.
With consumer spending having reduced, resulting in reduction of
spending by companies, there is tremendous pressure on government
to deliver services for which companies are not fully equipped.
Hence, any responsible corporate must ensure that while trimming
the budgets in these times is good, it makes complete business sense
to align and focus on strategy for CSR on operational efficiency
and ensure that every penny spent goes to the end user. CSR is not
purely about giving donations and contributing to the social causes
through charity giving, but is primarily about values of empathy
and honouring commitments. It is also about supporting the government
and making a difference to the lives of people who would otherwise
remain on the periphery of development.
Any company’s long-term future depends on it being responsible
to the society and environment. CSR is not only about financial
philanthropy but also about transparency and ethical governance.
It is also about setting standards where quality of service and
benefit goes directly to the beneficiary especially the one that
is most marginalised.
The author is the head –CSR, MphasiS