There is a lot of emphasis nowadays on corporate social responsibility (CSR) activities, Given that there is now a law to this effect, mandating at least 2 percent profit sharing by companies earning in crores on CSR activities, corporate houses now have to ensure its execution well. Why this is important from the point of view of a corporate? What benefit corporate houses will get from CSR activities? This requires a nuanced understanding of purposes CSR serves at large and social responsibility of firms towards society.
Firms must ensure that the very purpose of CSR is not destroyed through its implementation
The very purpose of CSR is to ensure that the benefits of development are reachingto a wider society;to ensure that a firm where it is operating and extracting resources from is also giving back and contributing in the development of that region. For example a steel firm contemplating a factory in some rural part of the country, and that will require acquisition of land and for that local population will have to give permission. First the government has to ensure that the firm has all the requisite clearances and land is acquired by following the due course of law. In case there is a need to relocate the families, they have to be provided with all the facilities besides taking care of their livelihoods and other needs like education for kids, health facilities,sanitation and water facilities. It is this firm’s responsibility and social obligation to ensure that these affected families are not deprived of their rights, and instead, they are being provided by better employment opportunities for their growth and welfare, and at the same time, ensuring too that the environment is least impacted. The development of the steel firm in the vicinity should take care of the social needs of the society where it is operating from. This form of CSR activities can be conducted by the firm by roping in local agencies and civil society groups, or by having a separate dedicated wing to carry out these activities. The objective is to ensure that the fruits of development are reaching to all people without having much impact on the local environment and conditions.
It is up to corporates to decide whether they wish to see the glass half full OR the same glass half empty
The consent and support of local population is crucial for any business. In case local population are not supportive of the firm given the fact that it is not going to do anything in return of taking back their lands and natural resources on which their livelihoods are much dependent on, there is a chanceof unrest and backlash. That will definitely impact the dream of the firm and may cause it to die forever. However, if the firm ensures that its operation/industry will provide gainful employment and skill development, it will get easy labour at low cost as outsourcing will cost more. With little investment in skill development of local population as part of the CSR activities, besides creating other social avenues like schools and health centres, the firm will not only gain the confidence of the local population, but also help the rural society to grow and help them connect with the mainstream,and developing India in a true sense, besides creating a cordial work environment for increased production.
Do we need a law to even fulfil our obligations???
Now that there is a law, businesses have to invest in CSR work at least 2 per cent of their earnings. This is very important given the rising resentment and feelingsof the masses that corporatesexploit local resources without giving back anything in return and rather creating social unrest and affecting the local culture and disintegrating the society. The social work carried out by the firm will help it not only gain national but internationalattention that will culminate into taking their footprints in other parts across the borders, given its high reputation in CSR activities. Otherstates and nations may invite the firm if it can not only help grow their economy but can also play a vital role in developingtheir societies and local traditions, while keeping everything intact.
“If you wish to eat fruits of development, you must water the soil to plant more trees, which will nourish the roots, the soil, and in fact the tree itself.”