Tuesday, February 19, 2019
'CSR impacts the Top & Bottom Lines of the Corporate'
CSR in recent times has evolved as a subject. We know that the very purpose of Business (Corporate) is to do business and make money. It is very important to understand that Corporate Social Responsibility (CSR) is the tool to develop business many folds as it creates a 'Wow' effect in the minds of the stakeholders and if the stakeholders are happy, the shareholders are automatically happy.
Today, Business has a more deep impact on People, Planet & Society but, the irony is ,whether it is the People or the Planet or the Society, it views Business with suspicion. Infact, Government at times, view Business with suspicion. Thus, it becomes a very important duty of the Business to come Clean, Credible and Ethical and by and large make the Business a 'Good Corporate Citizen'
The benefits of being a good corporate citizen is undoubtedly many. It indeed helps in better valuation of the business and its product & services thereby giving momentum to the entire Product Life Cycle of the business and thus, the Top Line as well as the Bottom Line of the Business improve. It thus, become imperative that Business look towards Financial Returns along-with Social Returns.
CSR which is an important tool, typically revolves around 4 important Pillars which are - Market Place (the Customers), Workplace (which are the employees), Environment in particular and Society in general. These pillars are more from understanding the CSR as a concept and obviously there would be tools and research to analyse the CSR needs of a different Corporate and industries and accordingly prescribe the best fit CSR strategy for them.
I believe, it is extremely important to note and not to confuse CSR with Philanthropy. At times, Corporate are engaged in Philanthropy (and that's actually good to do) but, Philanthropy and charity are not at all CSR or form a part of the CSR budget. CSR if ignored, can paralyze the business completely.
Example : a beverage company digging up underground water in a village for it bottling plant and in return spend some money on education of underprivileged children (near or far from the bottling plant site). While the spend on education in an example of Philanthropy, it is certainly not CSR as it has neglected the Environment & Society at large.
Since, every business is different and with the kind of CSR budget which it has, it makes a conscious call to divide it among the 4 aforesaid pillars - Market Place, Workplace, Environment & Society. For example, the CSR spend of an Airline company on Workplace will be different from that of a Mining or an FMCG Company as the nature of businesses are different. Infact, the airline company would like to spend more on its employees and environment as compared to an FMCG company which would like to spend more on Market place.
To conclude, I would like to say that Corporate must take CSR forward with High Spirits and involve the Top Management in defining the CSR Strategy, its budget and the areas (related to business) to spend the CSR money so that, it has a positive impact on the business and the business is viewed with Credibility.