The four prongs of CSR

CSR has vast potential in a country like India. Its expanding cities, increasing middle-class and availability of goods is proving very conducive to a consumerist society. All of this places an immense strain in the environment and natural resources. It is very similar to what happened in America in the 1950s and India  has much to learn from those mistakes. Companies need to start investing more in CSR activities to bridge the gap between functional cost and true cost.

Responsibility towards Workplace

Every company has the responsibility towards its largest group of primary stakeholders - its employees. All CSR activities must stem from here in order to inform, educate and empower them to get involved with their activities. Companies also have the responsibility to make the work environment a clean, safe and productive environment.  Many companies follow an employee-centric model of CSR whereby employees can volunteer in the company's CSR schemes etc. At LG India, 200 employees and their families recently participated in the Yamuna river clean up in New Delhi. Philips India also organised a CSR initiatives whereby 800 volunteers spread awareness among students about health and well-being. These initiatives serve as team-building activities and also encourages a culture of sustainability.

Responsibility towards the Marketplace

There are many ways in which companies can show responsibility towards marketplace. This is especially important for FMCG companies because being sustainable here is an excellent marketing tool. There are companies that still engage in very shady operations in spite of having  CSR policies. Of course there are many companies that proactively engage in consumer-based CSR and consumers after-all are major stakeholders. CSR responsibility towards the marketplace will not be boosted unless consumers exercise their right to demand a better product from the manufacturers. This responsibility does not only involve bringing the customer a more sustainable product but companies should also pay attention the entire life-cycle of the product and ensure that the manufacture and disposal of the product causes the least harm.

Responsibility towards the Community

It is very easy to confuse charity and philanthropy-based activities with 'responsibility towards community'. The charitable arm of CSR is of course one aspect of it, but CSR goes beyond that direct company engagement in the community in which it operates. Does it engage in community upliftment projects in the area where it operates? Does it ensure that water sources are not polluted? The scope for community-based CSR is vast in India due to wide-spread social issues and if done properly can improve the lives of many thousands. It is a prong of CSR that even SMEs can use to spread increase their profile.

Responsibility towards the Environment

The biggest, most complicated arm of CSR is extremely important. Without a healthy environment to support economic activities, business fails. Many businesses follow an environment-centric business model to ensure minimal impact on the environment. This prong vast opportunities to reassess their processes in order to ensure that their activities are as sustainable as possible. Being environmentally responsibility does not only mean being carbon-conscious but also assessing where along the production line changes can be made. Life-cycle analysis is a very useful tool in ensuring that environmental stewardship is the norm for industry operations.

A well-balanced CSR portfolio is one that gives equal importance to all four prongs. CSR reporting provides an additional measure of accountability and transparency of the company's activities especially if it is audited by an external agency. SMEs especially stand to gain from incorporating CSR principles into their business model and many MNCs can do so much more within India to increase the profile of corporate responsibility.