Most organisations and businessmen perceive CSR as a philanthropic initiative and often use both words interchangeably. This has led to wasteful or cosmetic expenditures by businesses who see it as a mere compliance. True advantages of CSR can be realised only when top management begins to use it as a tool in their strategic tool kit. There are uncountable ways in which CSR can become a long term business opportunity. I have explored three such dimensions in this article.
CSR for future talent pool – Human resource is the key differentiator for many businesses. Future wars for market-share will not be fought over talent. Advertisement and marketing will become redundant and companies with skilled professionals will win the Customer. Smart organisations will make investments in creating content and infrastructure by partnering with NGOs or Skill Development institutions. This ecosystem will give a competitive advantage to such companies in harnessing skilled talent year after year.
CSR for sustainable supply chain – The biggest victim of business growth is the very source that feeds raw material for growth. Companies which sell mineral water face dropping of water level and companies which make paper face unavailability of wood. Investing in ecologic infrastructure to replenish more than what we are withdrawing is the only way a capitalist can sustain today’s growth. CSR gives us a great reason to make such investments in people and infrastructure to ensure that we have sustainable supply of raw material.
CSR for future markets development – FMCG companies in India today swear by “Value at the bottom of Pyramid” and have managed the growth of last decade only by launching Chhota Pack of virtually every product. Mutual funds can hope to grow by more than 100 times just by spreading financial literacy and educating people about virtues of saving and investing. Car companies can hope to grow by lending a hand in making better roads and stationary companies by supporting rural schools. There can be numerous other ways in which a business can direct his CSR investments to develop new markets for the future.
Socialism or Capitalism is only a matter of perspective. In the larger picture everyone is working to build a better society to live. It is time we review our thoughts on CSR and start spending this budget more prudentially.
The author Prof Amit Goyal is the founding director of TKWs Institute of Banking & Finance. As an entrepreneur, he has extensive exposure in the space of education, skill development, adventure sports, travel, information technology,, international logistics, and f&b industry. He has a deep interest in experiential learning and has written 5 books on the subject. He is an active member on various industry associations like ASSOCHAM, NHRD, AIMA, DMA and is active contributor to Navjyoti & TKWs Vikalp. He is also the convenor of annual banking conference called Bankers Meet.