CSR- A Business Opportunity

Author(s): Sanjeev Gupta and Nidhi Sharma

Source: Indian Journal of Industrial Relations, Vol. 44, No. 3, Corporate Social
Responsibility (Jan., 2009), pp. 396-401
Published by: Shri Ram Centre for Industrial Relations and Human Resources
Stable URL: http://www.jstor.org/stable/27768212
Accessed: 28-01-2017 15:31 UTC

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted
digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about
JSTOR, please contact support@jstor.org.

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at
http://about.jstor.org/terms

Shri Ram Centre for Industrial Relations and Human Resources is collaborating with JSTOR to
digitize, preserve and extend access to Indian Journal of Industrial Relations

This content downloaded from 84.54.97.56 on Sat, 28 Jan 2017 15:31:18 UTC
All use subject to http://about.jstor.org/terms
 Invited Article
CSR- A Business Opportunity
Sanjeev Gupta & Nidhi Sharma
CSR is not a cost centre but an
effective management tool with
multi-dimensional benefits. CSR
offers a new way to look at the
relationship between business and
society that does no-t treat
corporate growth and social
welfare as a zero-sum game.
Grounding CSR in the values,
purpose and strategy of the
business and treating it in
entrepreneurial fashion is the way
forward. CSR is an opportunity in
the offering, argues the authors.
Sanjeev Gupta is Director and Nidhi Sharma is
Senior Advisor, Metamorphosis, 7/59, South Patel
Nagar, New Delhi. E-mail: nids2480@gmail.com
396 The Indian Journal of Industrial Relations, Vol. 44, No. 3, Jan. 2009
This content downloaded from 84.54.97.56 on Sat, 28 Jan 2017 15:31:18 UTC
All use subject to http://about.jstor.org/terms
CSR- Heightened Status
Corporate social responsibility
(CSR) has recently taken flight into
board/conference rooms and has
emerged a topic of concern in corporate,
government and international business
forums. The reasons are varied: global
warming pressures, wide divide of
wealth, customer preferences of ethical
business practices etc. Media support
has further fueled this fire. In this global
age social, economic and political
problems merge into one another - as do
the solutions. In response, CSR has
emerged as an inescapable priority for
business leaders and a response to new
conditions, new challenges, and new
opportunities. CSR in near future will
play a key role in sustainable business.
CSR has emerged as an inescapable
priority for business leaders and a
response to new conditions, new
challenges, and new opportunities.
Corporate social responsibility
(CSR) has been around in various guises
for quarter of a century or perhaps
longer. It has evolved to the status of a
profession and is being debated on the
world stage, advanced by globalization
CSR- A Business Opportunity

and technology. There are CSR ability. Governments, activists, and the
consultancies and think tanks in most
media have become adept at holding
developed and developing countries companies accountable for the conse
around the world. Social (e.g. 9-11, HIV quences of their actions.
Aids), environmental (e.g. climate
change) and economic (e.g. Enron) Caring for employees, communities
shocks are eievating issues to the and environment is not only seen as
international arena.
morally correct, but also the best
approach for continuity and profit
Companies which aspire to be, or ability.
are, leaders in corporate social
responsibility are challenged by rising
public expectations, increasing inno CSR is generally understood to be
vation, continuous quality improvement the way a company achieves a balance
and heightened social and environmental or integration of economic, environ
problems. They are forced to chart their mental and social imperatives while at
CSR course within a very complex and the same time addressing shareholder
dynamic environment. and stakeholder expectations. It is about
meeting the current needs and ensuring
In India, CSR has been seen as the future generation's needs are not
philanthropy, charity, social-giving in compromised upon. Good CSR goes a
the past. Most business families have step further, increased belongingness in
been taking up topics of their respective employees, enhanced skills and better
interests and investing in them. With motivation brings better productivity,
globalization, the demands are changing lower rate of attrition, fair practices in
the definitions, it is not only about how supply chain will add to transparency in
you spend the money but customers are the organization, public image, effi
also demanding information on all the ciency and effectiveness. Responsibility
business processes in how the company towards the environment and community
makes money and treats it various will improve the conditions around work
stakeholders. space in many dimensions.

It is increasingly being appreciated CSR - The Hidden Opportunity

that the success of a business is
inextricably tied to the welfare and Why be good? Why do the right thing,
stability of the community. "People" and especially when so many around you can
"planet" have a part to play alongside profit by doing the wrong thing? How
"profit". This calls for a new corporate much am I willing to pay to be good?
logic, in which caring for employees,
communities and environment is not Tough questions indeed. People who
do charitable work often talk about how
only seen as morally correct, but also the
best approach for continuity and profit rewarding it is. Call it the next gene

The Indian journal of Industrial Relations, Vol. 44, No. 3, Jan. 2009 397

This content downloaded from 84.54.97.56 on Sat, 28 Jan 2017 15:31:18 UTC
All use subject to http://about.jstor.org/terms
 Sanjeev Gupta & Nidhi Sharma

ration of corporate philanthropy, from chains. No longer a legal necessity and

writing cheques, companies are more a nice thing to do, CSR is emerging as a
closely integrating their cause agendas 'hard'commercial factor, linked directly
into their business strategies. And it's to profits and brand value. If corporations
paying off in many ways.Companies were to analyze their opportunities for
recognize CSR's dividends. Log on to social responsibility using the same
the web site of any Fortune 500 company frameworks that guide their core
and you are likely find a prominent link business choices, they would discover
to its CSR efforts, with some even that CSR returns can be a potent source
launching massive media campaigns of innovation and competitive advantage.
promoting their CSR endeavors. Accord
ing to a World Economic Forum survey
of CEOs and leaders (Voice of the
CSR is emerging as a 'hard'
commercial factor, linked directly
Leaders Survey), corporate brand to profits and brand value.
reputation outranks financial perfor
mance as the most important measure of
success. Companies with a public The corporate sector is replete with
commitment to ethics perform better on examples of companies where CSR
3 out 4 financial measures. On average,
practices have not only established them
CSR-oriented companies also have 18% as credible enterprises but also brought
higher profits. them business benefits:

CSR- a Tool for Competitive Cost savings

Advantage
A number of factors are driving the
increased adoption of CSR practices in
the corporate sector. Regulation obvi
ously provides the baseline for corporate
action, notably for employment prac
tices and the environment. Beyond this,
for many companies, being a good
corporate citizen is a vital aspect of their
identity, values, and vision.
Far-sighted business leaders reco
gnize that it is unsustainable for their
companies to exist as 'islands of
prosperity' in a sea of poverty. Market
forces are also propelling many firms to
go 'beyond compliance', notably for
those selling into international supply
Reducing risk
Increasing revenue
Building reputation
Developing human capital
Improving access to capital
CSR as an Opportunity
The underlying challenge for CSR in
India is how to demonstrate a clear link
between a company's own commercial
objectives and the wider goals of society.
We are familiar with the outlines of
a successful company: one that is
profitable, productive, with a strong

398 The Indian Journal of Industrial Relations, Vol. 44, No. 3, Jan. 2009

This content downloaded from 84.54.97.56 on Sat, 28 Jan 2017 15:31:18 UTC
All use subject to http://about.jstor.org/terms
CSR- A Business Opportunity

reputation and efficient in the use of funding of community initiatives will

natural resources. Yet, simply achieving remain a critical contribution to the
these goals may not be enough to be a national development for years to come.
responsible company if profits do not However, better understanding is needed
lead to per capita income growth, if of the performance of these programmes
employee well-being does not improve, to enable companies to allocate their
if community programmes do not raise funding appropriately and for their
social welfare, and if the company's eco stakeholders - notably affected
efficiency fails to sustain the underlying communities - to be able to have a real
natural resource base. influence on decision-making. In
addition, there is a real opportunity for
corporate action in this area to move
The task is now to apply funda
upstream into core operations to make
mental business principles to make
underlying business models 'pro-poor'.
CSR sharper, smarter, and focused
on what really matters.
// Sustaining Critical Natural
Capital: India's natural resource base
Sufficient progress has now been continues to be depleted through a range
achieved to demonstrate the case for of pressures?technological, economic,
CSR in India. The task is now to apply social, and demographic. The result is
fundamental business principles to make often an acute 'resource crunch' leading
CSR sharper, smarter, and focused on to conflicts between companies and
what really matters. This means communities over scarce water or
rigorously focusing on priorities, allo biomass resources, for example. A vital
cating finance for treating CSR as an area of corporate commitment -
investment from which returns are particularly in resource-intensive sectors,
expected, monitoring activities to ensure such as metals and mining, power, and oil
initiatives really deliver outputs, and - is to develop clear programmes first
reporting performance in an open and to assess and then reduce the corporate
transparent way so that all can celebrate footprint so that it rests within the
progress and identify areas for further available carrying capacity, thus
action. ensuring equitable access, particularly
for low-income groups.
Making Priorities
Ill Ensuring Transparency: Without
Building on the existing good disclosure of performance, there is no
practices, four inter-locking priorities for basis for evaluating corporate movement
action emerge. towards responsible business practice.
Good practice does exist in India, but it
/ From Philanthropy to Social is limited. Working with leading
Investment: India's inadequate social international institutions, such as the
infrastructure means that corporate Global Reporting Initiative, there is a

The Indian Journal of Industrial Relations, Vol. 44, No. 3, Jan. 2009 399

This content downloaded from 84.54.97.56 on Sat, 28 Jan 2017 15:31:18 UTC
All use subject to http://about.jstor.org/terms
 Sanjeev Gupta & Nidhi Sharma

powerful opportunity to develop a core corne, CSR progress will become

set of common CSR indicators that increasingly mainstreamed by business.
leading companies can use to communi The continuum seen today - of com
cate their performance, both internally panies' differing commitment to signi
and externally. ficant CSR - will be evident in the future.
More strategic, integrated and 'deep'
IV Linking CSR & Financial CSR adherents will emerge over the
Performance: In North America and decade.
Europe, socially responsible investment
has become an important complement to One of the most significant trends
CSR. In the words of the Association of will be the increasing influence of
British Investors, 'incorporating social stakeholders, whether through more
responsibility can reduce portfolio engaging stakeholder dialogue or
volatility and increase returns'. If CSR through stakeholder campaigns. Stake
is to be pursued on a truly sustainable holders will become more strategic and
basis by India Inc. then investors will more coordinated, increasingly working
need to appreciate the linkages with together on issues of common concern.
financial performance and understand Consumers and employees will become
the challenges of delivering long-term more demanding as and when they
social returns in the context of the ever perceive the connections between
shrinking financial horizons. Opening a corporate behaviour and their quality of
dialogue between the business and life. Suppliers will increasingly be
financial communities on social pulled into CSR practice as companies
responsibility is therefore essential, and through coercion or choice integrate
should help to provide a stronger CSR throughout their supply chains.
analytical case for CSR.
CSR issues are expected to remain
The Way Forward
the same, though the performance
bar will continuously be raised.
There is a need to develop a more
coherent and ethically-driven discourse
on corporate social responsibility. CSR CSR issues are expected to remain
is still sometimes seen as "green wash" the same, though the performance bar
to clean the sins of pollution, or "white will continuously be raised. The environ
wash" to provide a facelift to the ment, poverty and social exclusion and
company's public image. It is often seen governance, ethics, transparency and
as old wine in a new bottle ? just accountability are expected to be the
another trendy name for good old dominant future CSR issues.
philanthropic initiatives by the com
panies. There is need to move beyond Most governments will be requiring
such transitory illusions about corporate mandatory disclosure of corporate social
social responsibility. In the decade to and environmental performance, and

400 The Indian Journal of Industrial Relations, Vol. 44, No. 3, Jan. 2009

This content downloaded from 84.54.97.56 on Sat, 28 Jan 2017 15:31:18 UTC
All use subject to http://about.jstor.org/terms
CSR- A Business Opportunity

encouraging different CSR approaches to Perceiving social responsibility as an

flourish through voluntary compliance on opportunity rather than as damage
CSR standards and codes. Business control or a PR campaign requires
schools will increasingly jump on the CSR dramatically different thinking?a mind
bandwagon, integrating CSR curriculum set, which will become increasingly
within their business programs. CSR will important to competitive success. The
be promoted as a means of fostering essential test that should guide CSR is
creativity and innovation. whether it presents an opportunity to
create shared value - that is, a
meaningful benefit to society that is also
CSR will be promoted as a means valuable to the business.
of fostering creativity and
innovation
CSR is not a cost centre but an
The future of CSR lies in the hands effective management tool with
multi-dimensional benefits.
of the public and civil society organi
zations and their changing expectations,
and the vision and leadership of the CSR is not a cost centre but an
private sector. effective management tool with multi -
dimensional bene
fits. ISO certifi
cation experience
has also proved the
same. CSR offers a
new way to look at
the relationship
between business
and society that
does not treat
corporate growth
and social welfare
as a zero-sum game.
A lesser-known event of the epic, The Ramayana, relates to the common squirrel's Grounding CSR in
contribution to making of the 'sethu' (bridge) across the sea for reaching Lanka. the values, purpose
Being inspired by the noble purpose, the squirrel got wet in the seawater, rolled over
the sand and then shook the sand off on the sethu. Impressed by this sincere, and strategy of the
committed though small effort of the squirrel, Lord Rama patted on its back and business and treat
touched it fondly with his fingers, which, according to the epic, gave squirrel its
stripes. On similar lines, in case of the CSR interventions, the spirit of involvement
ing it in entrepre
and sharing the prevailing concerns of the society are of greater importance than neurial fashion is
the amount spent. It calls for the mass participation of each and every corporate the way forward,
operating in the society. Agenda for future of CSR in India to a great extent will lie in
recognizing, understanding and appreciating the CSR efforts by the media, civil CSR is an oppor
society and the Government, which will in turn promote it further in solving the national tunity in the offer
issues relating to unemployment and poverty and making the growth socially inclusive.
ing.

The Indian Journal of Industrial Relations, Vol. 44, No. 3, Jan. 2009 401

This content downloaded from 84.54.97.56 on Sat, 28 Jan 2017 15:31:18 UTC
All use subject to http://about.jstor.org/terms