How can we make CSR more effective ?

Toyota is the world's largest automobile manufacturer. Analysing the practical aspects of it's social responsibility programmes will enthuse anybody. During the author's visits to visit Toyota Kirloskar plant in Bidadi, near Bangalore from 2012 onwards, he always used to get impressed and amazed by the various socially relevant programmes Toyota Kirlosakar was carrying out in their campus for the people living in their vicinity and also for the environment.

The Gurukul scheme whereby Toyota Kirloskar Motors India used to select 10th / 12th standard pass students from the locality and train them for three years in the Gurukul and give them the option of joining either Toyota or any organisation of their choice was a great way of empowering the people. Toyota as of 2019 is able to recycle 89% of it's water needs through rainwater harvesting and recycling and generates 88%of its energy from renewable sources preventing the release of almost 68,000 T of CO2 into the atmosphere annually.

Pursuant to this revealing statistics, the author from Alliance University went about creating more awareness and sensitising the students and the public on Corporate Social Responsibility (CSR). The author seriously began researching the subject and documenting the vital aspects.

Corporate Social Responsibility

Wikipedia calls Corporate social responsibility is a type of international private business self-regulation that aims to contribute to societal goals of a philanthropic, activist, or charitable nature or by engage in or support volunteering or ethically-oriented practices.

Corporate Social Responsibility is a management concept whereby  companies integrate social and environmental concerns in their business  operations and interactions with their stakeholders. CSR is generally  understood as being the way through which a company achieves a balance  of economic, environmental and social imperatives ("Triple-Bottom-Line-  Approach"), while at the same time addressing the expectations of  shareholders and stakeholders. - UNIDO

Carroll's pyramid of CSR (1)

Even though Corporate Social Responsibility has been in the spectrum of business and social world since 1955, it was in 1991 that Carroll came up with deeper understanding of the same with the Carroll's pyramid which highlights the importance of Economic responsibility (ER), Legal responsibility (LR), Ethical responsibility (ER) and Philanthropic responsibility (PR) in any corporate setup.

Referring to the 2015 seminal article that appeared in Harvard Business Review authored by KasturiRangan, Chase and Karim (click here) wherein they studied the aspects of what constitutes good CSR and answered many unanswered questions from the participants of Harvard Business School's CSR programmes for industry executives from 2015 onwards.

The authors divide the whole CSR exercise into three theatres,

• first theatre focusing entirely on philanthropy, charity
• second theatre looking at CSR benefiting a social cause like education, raising skills or standards of living while fulfilling the industry commitment to society and 
• third theatre building new self sustainable business models serving society responsibly.

While Toyota Kirloskar India through it's unique Gurukul programme fits into theatre two of serving societal good and at the same time serving the industry, Hindustan Unilever through it's Project Shakthi and Gururaj Deshpande through it's Deshpande Foundation fits into theatre three, of building new business models helping women benefit from micro-financing, of helping entrepreneurs innovate raising the standards of living of families and societies. The philanthropy programme of India's greatest philanthropist Azim Premji of Wipro falls mostly into theatre one.

India's Ambuja Cement's CSR matrix, courtesy HBR

While organisations pursue CSR for differing duration and different purpose, Harvard Business School's Kasturirangan and others feel, the activities need to be coordinated and streamlined to make it more effective.

The case of India's Ambuja Cements, a part of the global Holcim group, is highlighted in the paper, reporting interventions starting from theatre 2 and which spread over to theatre 1 and theatre 3.  Even though transforming interventions from theatre 2 to theatre 3 is by itself a bit challenging and requires great effort and thinking, it does open up new workable business models for the company. In the present case, the old barren land after mining, using rainwater harvesting was made arable yet again and given back to the same people from whom it was purchased helping them lead a normal life, completing the sustainability cycle - indeed a viable business model for the whole world to follow.

Accordingly the authors, later on in the paper, have come up with four necessary steps, not in the order, which needs to be carried out to have a flawless and effective CSR programme for any organisation.

They are listed here

1. proper coordination and streamlining of programs within theatres
2. developing meaningful metrics to gauge CSR performance in organisations
3. coordinating programs across the three theatres and
4. developing an inter disciplinary CSR strategy

While proper coordination improves the effectiveness of CSR in organisation, using the right metrics, often economic, results in improving the efficiency of these CSR activities. Streamlining the total CSR activities across the three theatres often brings manifold benefits to the organisation, while at the same time improving its brand image and profits.

The research by Rangarajan suggests another great learning, any CSR strategy cannot be caged into any one business functional area. The effectiveness of CSR activities often emerge when it becomes inter-disciplinary , ie. acts across departments of the organisation.

The Indian Ambuja group's goals are to give back more to society than what it takes from it and it to clean the environment much more than how it pollutes. IKEA of Sweden looks as much at growing sustainable forests and developing effective models to use old furniture.

At Alliance University in Bangalore while giving the best to the student community, we believe more in the theatre two CSR, wherein by giving cleaner greener sustainable environment to the students, we are doing yoemen service to the society, while at the same time benefiting economically by reduced utilities bills, promoting sustainable living and are able to improve our brand image.

If organisations across the world take up this process of sustainably giving back to society in right earnest, benefiting societies, communities and people, especially the deprived, sidelined and downtrodden in society, how much more better would it have been to spend our time here on planet earth.

George ..

References : 1. Thacker, Hency, (2019), Understanding the Four Levels of CSR, The CSR Journal, November 2019, www.thecsrjournal.in, Last accessed 23 February, 2019.
2. Kasturirangan V, et al, (2015), The Truth about CSR, Harvard Business Review, January 2015, Last accesed 23 February 2019.