As companies in India prepare to meet the new requirements of the Companies Act 2013 on Corporate Social Responsibility (CSR), they have the opportunity to adopt a broader vision of corporate responsibility (CR) that can combine commercial, social and environmental goals while improving their competitiveness, according to Accenture and the Federation of Indian Chambers and Commerce Industries (FICCI).
According to their new report, “Organizing for Success on Corporate Responsibility: The Path to High Performance,” the Act encompasses a range of activities it classifies as CSR that, in fact, provide a path for companies to implement innovations and new forms of collaboration that allow them to create environmentally friendly, people-sensitive, safe and ethical businesses that are competitive and capable of generating socially responsible profits.
While the report acknowledges that in the short run, most businesses in India will continue to focus on building their CSR capabilities, it claims that many will gradually embrace the broader opportunities of Corporate Responsibility as they bridge capability gaps and gain experience on the way.
The report outlines a framework to help companies implement CSR activities and seamlessly transition from CSR to CR. The components of the high performance CR framework are as follows:
CR vision – Companies will need to define a clear, compelling future vision that enables company leaders to engage with internal and external stakeholders who must be actively involved for the long term.
Operating footprint and differentiation strategy – Companies must identify the areas in which they want to create value in terms of the social and environmental issues being addressed, the geographic scope, the range of partners and beneficiaries involved, and the nature of the value that initiatives will deliver.
Distinctive capabilities – To execute their CR programs, companies must develop distinctive capabilities, particularly in how they work with partners to identify talent and new ideas, and how they create models that share value appropriately between partners. They also need to put in place the organizational and operational processes and structures to execute initiatives that involve multiple parties.
Performance culture – The report advocates nurturing a performance culture by establishing internal systems and processes to unleash passion and commitment to CR programs throughout the organization, as well as effective metrics to monitor and guide progress.
Enabling environment – Companies need to invest resources and build relationships in the wider CR ecosystem, through actions such as providing training, supporting innovation or identifying start-ups that can offer relevant solutions.
Sanjay Dawar, managing director, Accenture Strategy, says: “Our framework is designed to help organizations think through a wide range of potential requirements and options – from their vision and strategy to their operating model, capabilities and culture — as they prepare to develop impactful CR initiatives. Ambitious corporate responsibility programs can strengthen the competitiveness and the sustainability of companies’ commercial strategies while contributing to India’s wider development agenda.”
Shaifalika Panda, Co-Chairperson, FICCI Young Leaders Forum, says: “The critical insights identified in this study can serve as a guide for organizations to evolve their current CSR strategy to align with day-to-day operations as well as program their resources so that their CR agenda makes a meaningful social impact. A holistic CR agenda should not just focus on making companies commercially and socially viable but also focus on sustainable and scalable initiatives.”
This research is based on a survey with senior executives from 20 companies across the consumer products, resources and financial services sectors, as well as civil society organizations. The report also features several case studies of CR high performers, which are defined as having consistently allocated a sizeable portion of their economic resources to corporate responsibility initiatives across economic cycles during the last three years; having undertaken a range of social, environmental and people-centric initiatives to help create holistic and harmonious change benefiting communities as well as their businesses; and having developed a well-defined plan for their future CR actions.