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By combining smart CSR strategy, effective partnerships and strong programme management, financial services companies can create a virtuous circle that marries social impact with business benefit across almost any sector.Read More
How companies can contribute to a "better" world through effective corporate sustainabilityRead More
By Gauri Sharma
Innovative CSR & sustainability managers are raising the bar of “traditional” corporate responsibility by leveraging it to solve pressing business problems, deriving business value while advancing the company’s sustainability performance. Employee engagement – which is vital to building a successful, future-facing company – is one such critical business challenge sustainability managers are learning to address. Good employee engagement strategies have been proven to lower attrition and absenteeism, and improve productivity, efficiency and work quality – creating an energy and reputation that attracts the best, innovative talent.
Now more than ever, it’s imperative to crack the challenge of disengaged employees. India will become the youngest country in the world by 2021, with 64% of its population in the working age group of 20-35, meaning that millennials will constitute the majority of a company’s workforce. Research shows millennials to be more socially conscious than any generation before, looking to work in companies that have a purpose beyond profit and where they can have meaningful impact.
Smart companies and sustainability managers are tapping into this trend by engaging their employees in their social and environmental purpose. It’s great to see how some companies are changing the game by crafting cutting-edge sustainability engagement programmes to make the business more responsible while creating a more engaged, productive and conscious workforce. Here are some of the best.
1. Dashboards – measure and amplify “doing good”
Innovative and easily-accessible dashboards are increasingly being used to spur and measure employee participation in sustainability initiatives. AT&T has been at forefront of this with its voluntary, company-wide portal called Do One Thing (DOT) which encourages employees to commit to regular, measurable actions that positively impact their communities, themselves and the company. From small initiatives such as recycling to edgy initiatives like developing sustainable technologies – AT&T has enabled it all by bringing engaging dashboards for sustainability.
2. Gamification – make sustainability fun
Companies are intelligently applying game techniques to motivate employees to opt for more sustainable practices, fast-tracking their overall sustainability improvements. In 2014, Sony Electronics (SEL) created an online Green Workspace Certification to encourage its employees to adopt more sustainable practices and engage in Sony Group’s larger goal of achieving a zero environmental footprint by 2050. SEL essentially turned sustainability into a fun game with a live stream of projects, team rankings and progress tracking, and divided the certification into four levels: Seed, Leaf, Tree, and Forest.
3. Green appraisal – integrate performance and sustainability
By adding a sustainability criteria to performance evaluation, companies are incentivizing employees to become change makers and actively participate in their sustainability agenda. To achieve its target of 100% employee engagement in CSR & Sustainability by 2020, Campbell Soup Co. assesses every employee’s performance on the basis of contribution to the company’s CSR and sustainability practices and goals. It has also integrated sustainability metrics into its executive compensation calculation. Similarly, in 2008, Intel made a bold move by linking a portion of executive and employee compensation to the achievement of the company’s corporate responsibility metrics.
4. Hackathons – disrupt the sustainability status quo
Hackathons have proven to be a great tool to crack business challenges. Dynamic companies are cross-utilizing them in sustainability by rallying employees to hack and pitch cutting-edge ideas that add social and environmental value to the business. 3M’s Innovation Power Pitch for Sustainability called on its employees across the world to pitch innovative ideas around potential sustainable products. The winning idea was given a research grant bring this product to life. The ever-inspiring Etsy, organized a Hack Day – bringing together 150 team members who came up with 22 ideas ranging from increasing women in leadership roles to a programme that tracks the company’s carbon footprint.
5. Volunteering 2.0 – utilise expertise for good
Companies are crafting smart and more effective employee volunteering strategies that leverage their employees’ knowledge and skill set for good. As a part of Godrej’s volunteering program, its employees capacity-build NGOs and work collaboratively with them to create long-term sustainable models. Pfizer’s Global Health Fellows program enables its employees to work with NGOs in developing countries for up to 6 months, addressing healthcare challenges in under-served communities. Skills-based volunteering not only deepens employee engagement, but also develops leadership, soft skills and professional expertise.
6. Conscious consumption – inspire positive change
Through exciting internal sustainability campaigns and offerings, companies are inspiring positive changes in their employees’ lifestyles. During World Water Week in 2012, Levis’ held a Go Water<Less Challenge asking its employees around the world to wear the same unwashed pair of jeans the entire week. By encouraging employees and even consumers to reduce their environmental footprint by using less water, Levis’ created significant buzz and also brought attention to its Water<Less collection. In 2011 SAP developed TwoGo a cloud-based carpooling app for its employees to reduce its carbon footprint and costs. In 2013, this app was launched externally, enabling other companies to leverage the same benefits. Very recently, Tata Consultancy Services (TCS), put up a message in their Bangalore office canteen, with an aim to cut down individual food shortage – “Take all you can eat, but eat all you can take”, tying into TCS’s overall waste reduction policy.
Progressive companies and sustainability managers around the world are aligning and integrating their CSR and sustainability vision with their employee engagement strategies. The result is that critical business challenges are being addressed as the business becomes more socially, environmentally and economically sustainable. It’s becoming increasingly evident that commitment to sustainability and CSR is no longer nice-to-have, but actually a great core business strategy.
Gauri Sharma is a Consultant at Do One Thing, a strategy and communications consultancy, driving responsible business in India.
This article was originally published on 25th May 2016 in The CSR Journal
Our Founder & MD, Laura Quinn, wrote a great opinion piece in the The CSR Journal, titled "Philanthropy To Purpose: India Inc. Is Finding Its Socially Responsible Feet".
The article describes India Inc's journey from corporate & family-led philanthropy, to the introduction of the CSR legislation and how that led to systems and processes being put in place to manage CSR compliance. After two years of the legislation, we are now seeing a surprising but truly encouraging trend - Indian companies integrating "purpose" at the core of the business strategies. Read the full article here
Analysing the spend
Since April 2014, India's largest companies have been mandated to spend two percent of their average profit from the last three years on social development activities.
Final reports of the first year of mandatory CSR spending (FY 14-15) came in last summer and the Energy industry (Oil, Gas and Power) had the highest CSR spend obligation at INR 2181 crore. Additionally, ONGC, an O&G public sector company, had the second-largest CSR spend in India with INR 495 crore (the largest being from Reliance Industries). Thus, the sector has a huge impact on shaping CSR as whole in India. DOT works closely with British Gas (BG) India on their social investment and thus, we have a keen interest in understanding trends within the sector. We conducted a study on the Oil & Gas (O&G) Industry’s first year of CSR spend, with a focus on 12 of the top O&G companies in India.
Missed two percent but not by far
On average, the O&G industry spent 1.5% (INR 972.9 crore)* of its net profits on CSR, slightly missing its two percent target of INR 1296.7*. Three O&G companies (India Oil, HPCL and BG India) spent their exact CSR budget whereas Oil India exceeded its budget by 36%. Given the magnitude of funds the sector was obligated to spend, it was a great start, and a clear indication that companies are committed to CSR.
Some observed trends
Within the O&G sector, several key trends emerged regarding how their CSR budgets were spent, much of it in line with India’s top companies across industries.
- Most O&G companies invested in at least one large project aligned with government initiatives, especially Swachh Bharat and Skill India. This gave companies a strong direction, reputational benefit and a good social license to operate driver. However, spending large sums of money on government initiatives under CSR doesn’t seem to be in the true spirit of the law as it shifts accountability of money’s impact from the company to the govt.
- About 90 percent of the CSR expenditure was in four of the ten spend areas of Schedule VII: Education and Vocational Skills; Hunger, Poverty, Healthcare and Sanitation; Environmental Sustainability; and, Rural Development. This made sense since these are the most basic provisions and broadest categories on the list, but also meant investments in tech incubators, sports development, and reducing inequalities were disproportionately low.
- Roughly 60% of the O&G sector’s CSR budget was through implementation agencies rather than direct implementation of CSR activities, working with credible and transparent NGOs and organisations on large projects.
- However, O&G Companies deployed a greater number of projects locally around their areas of operation, meeting the needs of panchayats and local communities. Activities tended to be ad-hoc rather than strategic, focused on driving license to operate in areas of operation. Although some are worthwhile on a small scale it’s questionable whether some are truly compliant with Section 135.
- Overall, the CSR focus of O&G companies leaned towards social development rather than environmental sustainability as the latter tends to be integrated within business operations and covered separately in sustainability strategies and reports.
- Of the companies that didn’t meet their two percent target, many indicated their reasons for underspend were to on-board expertise and focus on creating strategic projects that will have a larger impact on society.
Going beyond compliance
Compliance-wise, FY 2014-15 has definitely been a good start for CSR in India. However, mere compliance doesn’t necessarily make for good quality CSR. On the one hand, it forces companies to spend hurriedly and focus on spend instead of impact. This was clear in some reports where companies clearly interpreted the law liberally, investing their CSR funds in ad hoc or misaligned projects like horse shows or parades.
At the same time, it was evident that companies were struggling to create innovative, long-term, impactful projects for their CSR spend. As such, we hope that in the coming years, the sector will focus on a more strategic approach that will deliver enduring benefits for communities.
Suggestions for improvement
More innovation: There is a great need for companies to create systemic change in the way development is done, rather than simply supporting the programmes that already exist. By combining monetary contribution with the skills and technologies at their disposal, O&G companies can enhance their social impact. For example, apart from spending on building and running vocational centres, companies can also channel their knowledge to come up with standardized mechanisms for impact measurement of these centres – monitoring enrollment, attendance, absenteeism, placement and quality of training. Such innovations can also be scaled across industries, multiplying the impact of the initial CSR investment.
Increased collaboration: There is significant similarity in the social investment initiatives being taken up by the O&G companies. By pooling their expertise and CSR funds, O&G companies can collectively work on more innovative and strategic interventions, potentially resulting in an industry-wide coalition to ensure high impact of the CSR funds in the O&G industry. For example, in 2013, Europe’s fruit juice industry launched the Fruit Juice CSR Platform with the aim of integrating CSR across complex supply chains via a collaborative sector-wide approach.
Beyond mere alignment with government initiatives: Considering a significant number of O&G companies are public sector enterprises, aligning with government initiatives such as Swachh Bharat and Skill India is in-line with expectations. However, if companies go beyond mere fund allocation and work with the government to identify specific gaps that can be filled by CSR funds, the O&G industry’s CSR investment could have a larger, nation-wide impact. For example, companies have spent a significant sum of money on construction of toilets under Swachh Bharat, whereas there is a dire need for investment and expertise in other aspects of Swachh Bharat such as, implementing waste management programs and reforming open-defecation behavioural patterns.
(*Aggregated on the basis of secondary data from the 12 O&G companies in India)
By Laura Quinn
Last Friday I was very happy to make it to the Godrej Good Conclave in Mumbai, which focused on how to create a more employable India, and how to do it at scale. As part of its “Good & Green” strategy, Godrej has an ambitious aim to train one million youth in skills that enhance their earning potential, by 2020. Apart from some guts, an aim like that takes a genuine commitment to work with stakeholders across the ecosystem in order to find new solutions to the numerous issues in India’s employability landscape. And so the Godrej Good Conclave was initiated, by Mr. Nadir Godrej himself.
The speakers and audience were as well-curated as you’d expect at an invite-only event like this, with CSR funders, skilling NGOs, and advisory organisations all present. Overall it was an intelligent and enjoyable day of conversations that threw up some interesting debates. But for me some key issues emerged that absolutely need to be addressed if we’re to tackle India’s employability gap with any real success in the coming years. Issues that need not only require debate but that require action, innovation, and multi-stakeholder commitments.
In general, understanding the impact of employability programmes feels stuck in the dark ages. It was absolutely surprising to hear how NGOs and funders are starting to shift from measuring the number of people trained to measuring the impact of the training. That should be absolute basic hygiene in any programme from the beginning. Of course it’s critical to note that the particular complexities of skilling make impact-tracking more complex that some other programmatic areas but that’s exactly why, instead of putting in place basic tracking mechanisms now, we need to be talking about how to innovate methods of impact assessment within the space, with employers and trainers working together. If we work together effectively we can combine forces to undertake large-scale tracking, compare different methodologies, and sharing smart, “best-practice” learnings across all stakeholders.
The critical role of employers
Employers are one of the critical end goals of any employability programme but their role as stakeholders in the dialogue is too often understated, including a noticable absence of voices from the formal employment sector at Friday’s event. Some of the key messages coming out on Friday involved issues of making formal sector jobs attractive to young people and aligning their aspirations and attitudes with those of employers. Anyone interested in training for employability needs to be working actively with employers to successfully close the loop from training to sustained, long-term employment.
Overall the biggest issue that came out of the conversations for me was that working towards a market-based solution is critical. Industry needs a workforce, and people need and want jobs. It’s an industry in its own right and a natural market-based process. Non-profits that provide employability training tread a very fine line in potentially undermining the inherent value of that training and preventing the natural market of a skilling economy from taking hold. Although NSDC has done come commendable work in standardising training courses, there’s too much complexity and poor delivery to build “consumer” confidence that training is being done to the highest standard and will lead to long-term employment.
It was great to debate some of these issues on Friday, but it would be even better if we could get together to act on them. There’s a lot of talk around the problems but not enough around how we create and test new, innovative solutions. So, inspired by Godrej’s first step in convening the right stakeholders together, we might just take on that mantle and see if we can make it happen...
India could be the nation that leads the way toward a new “conscious” way of manufacturing – and therein lies an incredible opportunity for the Government to re-imagine “Make in India” as “Make Ethically in India”.Read More
Last week, Payal, our director of social investment, wrote a great opinion piece for Mint on the role that India Inc. can and should play in helping India reach the post-2015 Sustainable Development Goals. Market-oriented solutions, investing in innovation, skilling the workforce and closed-loop manufacturing - a good read on a Monday morning! Get the full piece here.
By Laura Quinn
A confusing place to be
Imagine an annual budget of Rs. 20,000 crores managed by 80 managers, none of whom ever speak to each other. Now imagine it’s actually 8,000 managers overseeing that budget, without ever meeting or sharing a word. And turn those managers into three to five-person management committees instead of individuals. Oh and tell each of the 8,000 committees to produce and submit its own, separate annual report. Now think about analysing each of those reports individually because that’s the only way to know how the Rs. 20,000 crores was actually spent. And finally try to make sense of what was achieved, what the impact was, or what was missed out entirely.
Impossible? Correct. Welcome to the world of Indian CSR.
Since the Companies Act, 2013 came into force last April, around 8,000 companies have been mandated to spend two percent of their average net profit from the past three years on Corporate Social Responsibility, within some ambiguous yet fairly restrictive rules set out in Section 135. Estimated as a total CSR budget of around Rs. 20,000 crores per year, the opportunity is tantalisingly close to being incredible. It’s the first legislation of its type in the world - no other country has ever even attempted it - and a funding injection of this scale could represent a critical turning point for India’s development sector, which was variably estimated to have annual revenues of only Rs. 30-35,000 crores before the legislation came into effect. But this funding can only make a difference if it is managed well and directed effectively.
Unfortunately, the reality after the first year of the mandate is quite the opposite. In fact, it’s all a bit of a mess.
- In the best cases, funds are being managed by a CSR manager or team that understands the development sector. But in most, CSR falls under the remit of Corporate Communications or HR departments without the necessary skills and resource to assess NGO partners or measure impact effectively.
- Companies aren’t talking to each other meaning the same mistakes, inefficiencies and failures are getting repeated hundreds of times over from company to company.
- Grey areas in the legislation, and lack of collective experience in interpreting it, are creating a sense of risk-aversion that’s stifling innovation, boldness, and the progress of new ideas for tackling development issues.
- Those social causes which are most attractive (to employees, investors, the Government, and media) are getting a glut of funds - with the Government’s pet missions attracting inflated investments with big tax incentives.
- Tried-and-tested, grass-roots programmes with simple metrics, immediate impact on-ground, and annual funding schedules, are seen as safe options while long-term, more experimental initiatives that have the potential to be real game-changers, are seen as too risky to attract the investment they need.
Ultimately, 70 percent of companies failed to meet their spending targets within the rules of the CSR legislation in 2014-15.
An incredible opportunity
However, as messy as it seems - and it really is - companies are in fact trying. Across the board corporates are struggling with similar issues, trying to interpret the rules, looking for the best programmes to support, and broadly wanting to make a difference. And it’s critical that they do; the CSR ecosystem needs companies see the value of their social investment in order to create a virtuous circle of increasing spends for the long-term. But despite this, the CSR scenario in India right now is inefficient, old-fashioned, eager for easy wins and, perhaps most distressingly, the enemy of innovation.
These are not the qualities of great businesses, and it’s certainly not how to go about changing the world. If Indian CSR continues in the direction it went in 2014-15, India Inc. is going to waste a truly incredible opportunity to transform this great nation.
What we need is a collective strategy, and we need it now.
Let’s imagine the best-case scenario. Try to envisage the collective brainpower of India’s 8,000 most successful companies and all the skills, talent, technology and capabilities they hold. Think about efficiency; think strategy; think “lean” approaches and cloud-based monitoring systems. Think of business-based, financially-sustainable solutions that enable people to lift themselves of out poverty. Think of companies combining forces without the concerns of competition. Imagine being free to invest Rs. 20,000 cores a year in social development without the burden of the public purse. Think of all the innovation and technology that’s at the forefront of one of the world’s biggest markets being directed towards solving its greatest social problems. It's dizzying to even think about the positive impact it could have. And it’s not even that far from being possible.
It’s time to tidy up
Sorting out the CSR mess isn’t going happen overnight. But this opportunity – the first of its kind in the world - is too important to fail. So we, as the CSR “industry”, need to start tidying it up now, and not rest until we make it something to be truly proud of. And there are three simple places to start.
1. Measure and manage
Before we can even begin to figure things out we need a simple way to know what’s being spent, where, with whom, and for what (social) return. ROI is one of the basics of doing business and we must make it a basic of CSR too. A simple, customisable, low-cost, SaaS system would enable companies to measure the effectiveness of their spend, and enable a macro analysis of where money is going, what’s most impactful, and how improvements can be made. We need a Tally for CSR, simple to use and open to all.
2. Share learnings and benchmark programmes
Even after just a year of the CSR mandate, the more able companies are already reassessing their CSR investments based on learnings so far. But most companies don’t have a CSR specialist, and the job of selecting NGO partners and monitoring programmes is left to another function to manage, without past experience in social impact. Inexperienced teams aren’t sure what to look for, or even which questions to ask and the result is hundreds of companies all wasting time (and money) learning the same lessons and funding potentially inefficient programmes. By creating platforms where companies investing in the same CSR space can share best-practice, discuss failures, build on mutual ambitions and eventually pool funds, we can ensure that investment is being directed to the programmes and ideas that will prove to be most effective in the long-term.
3. Inject innovation into impact
One of the great seductions of enterprise is its demand for innovation. Finding the cracks in what’s been done before, combining disconnected ideas into something ingenious, taking leaps of faith that others say it’s foolish to even dream of, is the lifeblood of any great entrepreneur. And social development isn’t so different. But taking a leap of faith, finding an unlikely new macro-solution, or simply thinking differently, are all impossible when your brief is to stay safe and not attract any unnecessary attention. We need to build a critical mass of companies who are ready to take risks with CSR spending and apply the pioneering nature of business to their CSR strategy. If we bring smart companies and great private sector leaders together in innovating CSR and social impact, there’s almost nothing they won’t be able to achieve.
Do One Thing is an impact consultancy based in Delhi that applies strategic thinking and innovation to corporate responsibility.
The first event of The Coalition, TC/1, is over - and it was an enlightening, eye-opening, and truly exciting three days. A full round-up will follow when we’ve had a chance to get all the nice photos and things back (check out the schedule and workshops for a taste of what happened). But until then, a quick post on the most important things we learned about creative startups when we got investors and incubators in the room on Sunday. It was an eye-opener for me and a validation of the potential of this space - but it also crystalised the big issues that The Coalition needs to address going forward.
The group of 300-odd that came for TC/1 was packed with talent. Not only as artists but as thinkers, ideators, game-changers - all the nice buzzwords you want to say about great startups. It brilliantly underlined the fact that being “creative” is not synonymous with being an artist, and that creativity is a very valuable skill in developing innovative business ideas.
Category changing concepts
Setting them apart from usual "startup" events which tend to be dominated by tech, engineering, and MBA graduates, the pitches on Day 3 at TC/1 (over forty of them) didn't focus on iterations of existing technologies or processes - they were often original, big-picture, category-changing concepts. This ability to think about big cultural, societal and consumer shifts is one that is well suited to the creative community whose work tends to demand they are immersed in cutting edge culture and trends.
Consumer and brand focused
Speaking to some of the angels and incubators on Sunday, one thing they were impressed by was that the ideas coming from TC/1 participants tended to be more rounded, mature concepts than they were expecting (and even we were if I'm honest). They were largely rooted in consumer understanding and needs, with strong brand appeal and cultural connect. Understanding consumers and brands are expertise that many creative professionals have developed naturally during their careers, and that we take for granted. But they are critical and powerful skills in building a startup so this was a lightbulb moment for me.
Lacking business competency
We thought this would be the case and it was. To the same extent the investors and experts were impressed with the “big idea” they were able to see the lack of basic business understanding in terms of market analysis, pricing, revenue models, potential to scale up, and general commercial operations. Even the lack of business cards (which very few people were carrying) surprised some.
And so the biggest issue for creative entrepreneurs came to the fore - no matter how game-changing the idea is, it’s only a good business if you have the right skills, knowledge and mindset to turn it into one.
An initial hypothesis (I reserve the right to change my mind on this after some more investigation!) is that we have two ecosystems with almost opposite problems:
1. The current “startup” ecosystem - has great understanding of business, engineering and technology but is struggling in terms of tapping into consumer understanding, user experience, design nuance, brand thinking, and cultural trends.
2. Young creative entrepreneurs - can come up with big-picture ideas that consumers need and want, with intelligent brand stories and a great user experience. But are lacking the business acumen and tech know-how to turn them into genuinely viable, scalable, and profitable businesses.
Bridging the gap
The startup world is eager to bring creatives and designers into the process to help tech startups with their user experience, design and brand. During the course of developing The Coalition I’ve been approached about this issue several times.
But that doesn’t really help the creative enterprises we are working to support.
So the question we need to investigate is how we can bridge these two worlds in a way that’s mutually beneficial, getting business and tech brains into creative companies, and creative thinkers into tech startups.
We are in the process of figuring it out with some of the investors and incubators who came to TC/1 and it feels like, if we can find a way to do it, the solution could have a critical impact on both ecosystems.
With the new Companies Act coming into effect from April 1st, Mint's double-page feature today discussed approaches to CSR in light of the new Act.
DOT’s founder Laura was happy to contribute to the conversation on deriving strategic advantage through intelligent CSR strategies.
For more information on what the new rules mean for businesses, check out our one-stop guide to Clause 135.
We've always believed that brands have the power to create change and, in fact, the power to change the world. Not only through CSR, but through their most potent power; their ability to reach out to consumers and change their perceptions.
Brands are interweaved into consumers' lives in an extremely intimate way. They live in their hands, homes, laptops, bedrooms and can often hold a place in their hearts. Brands have the potential to both create trust and command attention - which makes them a killer tool for communications.
Which is where changing the world comes in. For the most part brands communicate stories about their product or about their 'brand values' or 'point of view'. This tends to be a highly researched psuedo-opinion about the world, based on what they think will resonate with their consumers. So far so MBA....
But here's what Interbrand says about brand storytelling:
“Good brands make an impact when they speak. A really good story can change people’s lives, and if enough people hear it, that story can change the world. Meaning your brand can change the world, in part, by telling a great story.”
So our perspective is simple. If you're going to tell a story, tell one that changes the world. For the better.
Some brands have managed to do this brilliantly. It takes guts, creativity, and a brand manager with vision who's ready to make great things happen...
Levi's Water<Less jeans
A brilliant marriage of an innovative product, a pertinent cause, and a credible partnership. Levi's have gone the whole hog; they've shown a serious business commitment to an issue they believe in and are investing their dollars in advertising that cause too.
And, at the same time, shifting product and creating positive brand perceptions.
Not a brand initiative, but a brand sponsored project. RockCorps is a non-profit organization that refers to itself a “pro-social production company”. Thanks to some brave and innovative brand sponsorship primarily from Boost Mobile (US) and Orange (UK), RockCorps has managed to make the idea of volunteering cool to a new generation of socially aware youth.