Since Corporate Social Responsibility (CSR) became an imperative for larger Indian businesses under the Indian Companies Act in 2013, corporates, academics and NGOs have taken an interest in the repercussions across the world. As the concept of CSR is not defined within the Act, only the social issues that must be attended to, the eternal debate over what constitutes CSR has continued. This discussion buzzed around a recent conference on Sustainable Development hosted by the FORE International Business School in New Delhi and held in partnership with the International Association for Business and Society (IABS). It was attended by visiting academics from the US, Australia, the UK and Poland, plus representatives from business and academia across India.
In the West, the view tends to be that CSR must be directly linked to the business model and therefore be part of a strategy that adds value for both the company and its stakeholders. For many companies, this goes hand-in-hand with the explicit promotion of these activities. In India, there appears to be a more fluid approach to CSR, which frequently embraces philanthropic activities as part of its approach. Such activities tend to be dismissed by Western academics and practitioners as wide of the mark or not the role of business. Yet, Indian businesses continue to pursue such philanthropic practices and, as such, can feel patronised by this Western thinking. Indeed, the imposition of a Western approach could start to sound like colonialism in another form. But is the West listening?
There is no definitive definition or framework for CSR the world over, so every company in every country will have its own approach, dealing with complex issues in different contexts. Indeed, the fact that it is a social concept means that its practice must be context-specific. Western academics and practitioners will therefore often refer to the lack of a welfare state in developing economies such as India, and the need to address a wider range of social needs. But listening to the presentations and comments at the Conference, it was clear that this is over-simplifying the situation.
The application of combined CSR and philanthropic activities in India is often based on historical practices, much the same way as in the UK. Companies support their local communities by ensuring their employees are housed, healthy, and fit for work. Furthermore, they may make efforts not to pollute the local environment and engage in community activities that keep them alert to local issues. Companies in India and the West have developed branded activities that meet a specific business need, such as attracting new employees, while allowing them to promote the activity to their stakeholders. In the Indian context, however, the approach is often more subtle. Some of the best cases use a combination of CSR and philanthropic activity to provide their stakeholders with a sense of meaning. They appreciate that business alone can fail to do this and by offering employees—to take a specific example—an opportunity involve themselves in community work, they have a better chance of holding onto those most valuable to their business.
Furthermore, Indian companies are also using philanthropic activity as a way of developing relationships of trust with their communities. It was clear from the Conference that when a community perceives a company is only investing to ensure a return on investment, that trust can be broken. Philanthropic activity whereby a company is judged on its altruistic actions therefore becomes an essential part of the process. CSR can only then be effectively implemented when that trust is established and secure. This is an approach that Western models of CSR tend to ignore. It’s not to say that one way is wrong and the other right, but that different contexts demand different interpretations of CSR and the experience and practices of one business offers opportunities for others to learn from. It is, however, understandable that Indian academics and practitioners in this field can often feel their views are landing on deaf ears when the more rigid Western model of CSR is seen as the ‘right one’.
India now has a chance to show the world the impact of its approach, but it may have to shout to be heard. Sharing knowledge and experiences is vital if trust in businesses around the world is to be improved and continuous communication must be an essential part of this process.