Developing India’s first CSR education Eco-system

MBA and BBA in Corporate Sustainability and Responsibility

CSR, the most understood and misunderstood subject of the era. Solving the mystery is as simple as eating a pie or as complicated as understanding nuclear-science. In 2014, I had a vision to resolve these confusions and define an industry standard for the subject I’m passionate about “Corporate Sustainability and Responsibility”. The vision was converted into mission with the formation of IICSR in 2015. A lot of research and efforts went into, making the people understand the importance of education in CSR. The gap was just sensed, when we pitched the companies on CSR. The only talk we could hear was donations and in fact that’s the way the topic is perceived in India. Introspecting, the world view on the most dynamic and evolving subject, CSR has surpassed the traditional notion which we discerned.

Today, in 2017 envisaging the journey, I am immensely enthused to introduce MBA and talentBBA in CSR course curated by me and offered by MIT Pune University for the first time in India. The voyage India is on “To make in India”, “Stand-up India, Start-up India”, “India Shining” and more, sustainability and responsible business practices would be the key essence. As we walk ahead in future, competing with the global leaders will be a must. Adhering to the International standards and norms will be the new norm for India Inc. The one’s abiding shall sustain, the one’s not shall fade into insignificance.

Corporate Sustainability and Responsibility, is the towering gap that India Inc. needs to fulfill. The irony is that, lack to no CSR professionals available in the market. In these, testing times looking at the future prospects a career in CSR would be the most rewarding and sought after. The demand for CSR Professionals has been on the rise ever since the Bill got mandated in 2014 in India. Some of the articles supporting the need: http://www.business-standard.com/article/government-press-release/demand-of-trained-corporate-social-responsibility-csr-professionals-116050601338_1.html

http://economictimes.indiatimes.com/jobs/india-inc-on-a-hiring-binge-as-csr-grows-in-scale-scope-salaries-zoom/articleshow/46628802.cms

https://www.forbes.com/sites/csr/2011/03/30/kpmg-predicts-strong-demand-for-jobs-in-csr/#5a08fec0542d

 

The translation of dream, to need, to reality in this lifetime has instilled my faith in universe. Following inner calling is the way to live it out on a mission. ~Harsha

 

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Governments banking on CSR

It is startling, to see the Government inclination towards CSR and especially CSR funds (equating CSR=Philanthropy). The State government of Maharashtra has been making headlines on engaging with Corporates on CSR. The statistics show that REL has been the highest CSR spender in India with Rs.643CR in comparison to the Government budget which runs into 42,621CR only for Education for 2016-2017. Ironically, there is no mandate for transparency or accountability systems that the Governments/elected leaders are to use like the Corporates.

The CSR laws designed by the Government of India (GOI) ensures regular social monitoring, third party audits, annual reporting to the Ministry of Corporate Affairs (MCA) where the budgets are meager 2% of profits generated. The total CSR spent Rs 8,700 CR per year in front Maharashtra Government 2016-1017 spent of Rs 2,56,992 crore, an increase of 8.3% over the revised estimates of 2015-16.  The introduction of CSR Law, has enforced Indian companies to report to the Government and notices are sent to the companies who faulted. 

I wonder, if voting out is the only solution for opaque usage of funds by the government. Maybe, it is time that we as citizens voice our concerns and demand transparency in the system. Maybe, it is time that public would laud governments who would be proactive on accountability. Maybe, it is time we should set a reporting standard  for the Governments and not confine to private citizens, industrialists or individuals. Maybe, it is time…maybe…

Shrinking CSR to Philanthropy! – Loosing opportunity

                                 Shrinking CSR to Philanthropy! – Loosing opportunity

The revolutionizing subject which takes by storm in the developed world and inspires innovation on daily basis is disdainfully practised in the conventional way in India by confining to philanthropy. India has taken a leap ahead by imposing the law but is still resistant to development.

The well drafted CSR Bill by Indian Institute of Corporate Affairs (IICA) and the lawmakers is evolving. The CSR Bill in India, was drafted taking into consideration the social sector requirements but elsewhere, the investors, consumers, shareholders played a key role. The concept of CSR is to give a boost to businesses and build stakeholders confidence.  The investment decisions are based on specific criteria’s beyond profits that is where CSR Index comes into picture with indicators of prime importance to the investment community and other stakeholders. CSR Index is the basis of decision making for shareholders, Foreign Direct Investments, Local investors, conscious consumers, business peers, suppliers or manufacturers, Government functionaries, financial institutions and other stakeholders.

The emphasis of CSR Bill introduced in India has made companies proactive solely towards philanthropy and may evolve to address other concerns of the stakeholders.

This impetus given in our CSR Bill on philanthropy and social upliftment is reflected in our latest creation of CSR Platform. Bombay Stock Exchange (BSE) and Indian Institute of Corporate Affairs (IICA) has launched CSR platform called “SAMMAAN” which replicates “Give India”, or any other portal which lists NGOs/Corporates for philanthropic purposes. It is admirable to see the proactive step taken by these institutions where National Stock Exchange (NSE) is still due.

The transformation of CSR platform by BSE or creation of one by the apex body NSE, may take inferences from our contemporaries such as BRICS region. The progression of CSR platform or making of CSR Index may address the larger concerns of stakeholders. Below mentioned are inferences they may consider to embed in their models:

Johannesburg – South Africa:

The JSE, is the first stock exchange to form a Socially Responsible Investment Index (SRI Index) in 2004 in the emerging market. It announced on 3rd June, 2015 that it is partnering with FTSE Russell, the global index provider to develop sustainability index.

Shanghai Stock Exchange (SSE) – China:

In 2008, the SSE issued the Shanghai CSR Notice and the Shanghai Environmental Disclosure Guidelines on strengthening listed companies’ assumptions of social responsibility. Listed companies that promote CSR are offered incentives like priority election into the Shanghai Corporate Governance Sector, or simplified requirements for examination and verification of temporary announcements. The SSE has also developed the concept of social contribution value per share (SCVPS) to measure a company’s value creation. The Shanghai Environmental Disclosure Guidelines allow for the SSE to take “necessary punishment measures” against companies for violations of the disclosure rules.

In 2010, the CSR initiatives of the SSE were strengthened, when it launched its CSR Index, showcasing the top 100 companies in terms of social responsibility performance.

Efforts by the Government:

In 2008, The Ministry of Commerce (MOC) drafted voluntary guidelines on Corporate Social Responsibility Compliance by Foreign Invested Enterprises; a plan to encourage foreign companies to integrate best practice standards that advance China’s social fabric. According to the guidelines, a CSR- compliant company must consider its economic, social, and environmental impacts on Chinese society.

 

Presently, Moscow Stock exchange doesn’t have the index based on CSR, but studies by Moscow School of Management SKOLKOVO gives a sense of direction. In 2011, Russian Trading System (RTS) and SKOLKOVO announced Russia’s first Sustainability Index.

The calculation of company’s sustainability index is based on the following:

Shares from Russian issuers that are traded on the organized stock market which are selected on the basis of analysis of the company’s regularly published social reporting.

Moscow Stock Exchange: Russia –

BM & FBOVespa:  Brazil:

Índice de Sustentabilidade Empresarial  (ISE) is a tool for comparative analysis  of performance of the companies listed on BM&FBOVESPA. It was launched in 2005 with the support of International Finance Corporation (IFC).

The indicators used by investors, stock brokers, market to believe in the companies are as follows –

  • Economic efficiency
  • Environmental equilibrium
  • Social justice
  • Corporate governance

Responsible to enhance public understanding of companies and groups committed to sustainability, differentiating them in terms of quality, level of commitment to sustainable development, equity, transparency and accountability, and the nature of their products, as well as business performance in the economic, financial, social, environmental and climate change dimensions.

Methodology designed by: Sustainability Research Center (GVCes) at Fundação Getulio Vargas’s Business School (FGV-EAESP).

They utilize CSR Index on their stock market as follows:

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On the other hand the developed nations such as USA, EU and UK have taken the following steps for CSR Index –

Euronext – EU:

Euronext is the first pan-European exchange, spanning Belgium, France, the Netherlands, Portugal and the UK. Created in 2000, it unites markets which date back to the start of the 17th century. It uses Vigeo formed in 2002, for the purposes of sustainability index.

London Stock Exchange – UK:

London Stock Exchange is one of the world’s oldest stock exchanges and can trace its history back more than 300 years. On 3rd January, 1984 Financial Times Stock Exchange (FTSE) 100 Index was launched, which is wholly owned by LSEG. This enables LSE to provide detailed ESG ratings and data to the investment community globally.  These are presented at a variety of investor conferences globally and FTSE works with asset owners, asset managers and banks to develop tailor custom ESG services.

Dow Jones Sustainability Index (DJSI)  – USA:

In 2003, The New York Stock Exchange (NYSE) adopted corporate governance rules requiring that listed companies “adopt and disclose a code of business conduct and ethics.”  After a decade, in 2013, NYSE Euronext joined the United Nations’ Sustainable Stock Exchanges (SSE) Initiative. It is the only carbon neutral exchange group. NYSE-Listed companies make up 87% of both CDP’s S&P 500 Disclosure Leadership Index and the Dow Jones Sustainability Index (DJSI).

The developed nations utilize CSR index on their Stock Market as follows:

Temp2

 

 

It is on the onus of the markets to recognize the potential economies and allow it the space to grow.

As we observe our contemporaries, Indian companies need to specify their own growth and sustainability model, thereby building indicators of success to be used on the index for stock market. The modifications in times to come in the CSR Bill should also consider concerns of investors and other stakeholders.

The consequence of the present CSR Bill is that, in the Board rooms of Indian companies, still emphasize on philanthropy. The identification of sustainability, social entrepreneurs, green revolution, compliances, clean supply chain et al as a part of CSR is yet to be recognized.

It is time, we use CSR as a tool for nation building and holistic India Inc. growth. It is time, we free India from the shackles of CSR been confined to philanthropy and graduate to surpass the peer nations. To sustain the “Make in India” campaign we need to develop sustainable businesses to attract foreign investors and address conundrum of other stakeholders align on the path for inclusive growth.

International CSR Tools for Indian Companies

                                           International CSR Tools for Indian Companies

It has been a century old practice in India to implement social impact/audit tools on the philanthropic projects funded by International Agencies. Social audit and impact tools have been gaining currency in evaluating philanthropic projects lately. The excruciating process to conduct Need Analysis, Social Audit has become a part of CSR Project Management. As time has progressed the Social welfare scheme/philanthropic scene has developed and we have evolved to accept and implement international CSR Project management tools.

The past few years have seen international CSR management practices gaining momentum. The company Law 2013 has led to the advent of foreign consulting companies. International consulting companies have been nudging Indian businesses to move away from mostly subjective conventional social impact studies to more quantitative and measurable methods.

minds_sharing_ideas_md_wmYes Bank has emerged as the first bank to mark its presence among the users of international approaches such Dow Jones Sustainability Index. DJSI is the foremost and premier Sustainability Index in the world. DJSI was launched in 1999 and is used as key reference point for Sustainable investment for investors and companies alike. It has 2500 top companies listed on DJ Stock Exchange. Apart from them, Wipro has set an exemplar for the IT Industry in the services sector by being included on DJ World Sustainability Index for the 6th year in succession.

The hunger in India Inc. to be listed on International Indexes and to utilize these tools is on the rise. Other International innovative useful tools are:

Gross National Happiness Index Tool (http://www.grossnationalhappiness.com/gnh-policy-and-project-screening-tools/ )

OECD Better Life Index (http://www.oecdbetterlifeindex.org/ )

Advocacy Toolkit (http://www.sustainabledevelopment2015.org/AdvocacyToolkit/index.php/tools )

Reputex Emission Reduction, Carbon Credits (http://www.reputex.com/models-tools/ )

CSR Risk Tool (http://www.mvorisicochecker.nl/en/risk-check )

And many more introduced by consulting companies and research centres.

The benefit of using them, for some cases it is to attain international certification, listing, showcase reports to the Board or just to get new perspective on the project. It is remarkable to see these tools more manufactured from the west/developed world than the developing nations. Although, we have more need. The holding factor is due to limited number of knowledge institution for social development sector and restrained investment in research for the same.

Hopefully, with the implication of CSR Law and pro activeness among India Inc. it is time we are changing. The lead is taken by BSE, to introduce Index customized for India Inc.  named SAMMAAN and also by TERI which has developed GRIHA shown as follows:

Sammaan (http://www.bsesammaan.com/Search_data.aspx ) – Based on the concept of matching NGOs with Corporates. –

GRIHA (http://www.grihaindia.org/?t=home&#&home ) – Specialized tools for Builders and Developers which promotes sustainable habitat.

And recently, Indian Framework for CSR reporting was introduced by the government.

The dearth of tools for CSR/Social Development sector is dismal.  There is a dire need for innovation and research for sector-wise or even generic tools for CSR befitting for India Inc.

No doubt there is a long way ahead to develop or customize International tools for the CSR Sector suited for the Indian Requirements.

 

Terrorism – The Inhumanity of Humans

                       “An eye for an eye, makes the whole world blind” ~ M.K Gandhi

The year 2015, was liberating year visiting extremes of the globe. And then something struck, the arms and ammunition used by ancestors which were displayed in the museum of Napolean in Paris. The city of love embedding the magnificent churches, clubs, brands et al had this museum too. I saw Napoleans grave kept inside the church.

The display of arms from ancient times to their evolution till date has been remarkable. warWe graduated from stones to swords to guns and pistols to machine guns to nuclear. This all is for self defense/ to fight against terror and reasons best known to our souls.

An attack for an attack, millions of civilian lives for the life of that one loved one. Where is it that we are headed ? Terrorism has been prevalent in our society since ancient times and each act of terror displays a refusal by our society of a dire need of each one human who is causing terror. They are trying to communicate their beliefs/injustice/ thoughts through the venomous acts of terror. Our society is unable to read/negotiate and understand them so we see continuous attempts by them to convey their message with the mode they most prefer “Terrorism”

Our politicians, the peace making organizations and powerful nations have announced “Fight against terror” led byNapo the EU, “War on Terror” led by the USA. I am sure, we need to contain the escalating terror in this world, but the means are important. “The war against terrorism is terrorism”.  I see that we have successfully unlearned lessons and are about to repeat of history.

The insanity in me tells me that there are better ways of fighting than arms and still believes that non-violence is the best weapon. Heartfelt condolences to souls departed by the inhumanity of humans.

 

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India – Leader in making on Corporate Sustainability and Responsibility (CSR)

                                  Graduation of a human is gauged by “Karma’s”  ~  HM

 

The universe nudges me by instances in life to pen down blogs. This time it has been the 5th India Associations Congress (IAC) panel discussion which made me ponder on steps India should to take to lead in CSR than only mandating by Laws.

CSR Index:

The much needed, talked about CSR Index is still missing on Indian Stock Exchanges namely – NSE and BSE. If they do boost about something like Greenex which focuses on Carbon Trading, then let me tell you it is passe, the international market has forbidden to deal in Carbon Trading but has chosen to focus on CSR in a holistic manner. The experiment on NSE with S&P has been defunct since 4 years and new experiments are yet to see the light of the day.

I had a conversation with a senior person in NSE and inquired about the state. His response was lucid “The  investor community in India isn’t much open to CSR complaint companies. They perceive it has cost to the company, thus the challenge”. The leading PSU such as HPCLs CSR Head – Sonal Desai is of the view to have CSR Index after 3-4 years ! well mam, what is the value of action when the moment has past ? The basic belief that CSR should be done only in a philanthropic manner kills the essence and motivation to do for humans.  This leads us to the next step.

CSR Education:

The gap of understanding the quiddity of CSR by professionals to promoters of the companies/industries and investors is dragging India a decade behind the International Market. In order, to address this challenge I am establishing “International Institute of Corporate Sustainability and Responsibility (IICSR)” at present we are focusing on E-Learning (launching from October, 2015), Corporate training/MDP programs and are working to roll out 1 year CSR Course from the coming year.

I believe that workshops for the Investors, Promoters and CXOs on CSR is essential for the growth of this nation. This is possible only for the open minded one’s who are still hungry to learn even after making $BNs.

Apart from making the apex adept at CSR, we need bulk of CSR professionals in years to come and enough networking to synergize our efforts. Thank fully, Dr. Michael Hopkins has been kind to allow IICSR to start CSR Meet-ups in India which we are doing proactively in Mumbai.

Apart from CSR education which addresses the future requirements we need to counter the present challenges India is facing and will continue in times to come – Whom/What/Where to work in CSR? With 3.3 ml + NGOs and new bubbling every moment it is a task to align business responsibly. This leads to our next step.

CSR Audits:

The missing link to achieve successful due diligence is CSR Audit. It is a chicken and egg game in here. In order, for any project to be successful or fulfill the needs of the community, CSR Audit should be a mandate. Who does it though?

Independent companies such as mine “CSR Development Stories” have successfully conducted CSR Audits for NGOs and have initiated to do for the corporates but when we started with it there were questions about the authenticity and authority of our Audit which is a relevant concern and still persists. I believe that the Government of India or the State Governments should authorize companies to conduct CSR/NGO Audits to ensure the projects are implemented in reality with standards maintained.

At CSRDS, we are conducting studies on Need Assessment, Social Audits, SROI studies, and are envisaging towards CSR Reporting and Rating, Corporate – NGO/SE collaborations respectively. There are more companies such as mine which gives me the drive to compete but the independent consultants such as a retired banker or Government employee foraying in the CSR sphere as a retirement solution/work is disabling the whole system of CSR and questioning integrity to conduct such studies. I believe, that the Government should authorize companies to conduct CSR audits and give certifications on behalf of them. What are the benefits to the companies who are CSR Compliant? The question arises and stays even if CSR Index comes into picture. The question of motivation which leads us to the next step.

CSR Incentives:

In the recent CII conference, Mr. Unnikrishnan, CMD of Thermax stated “India is a incentive driven society, for us to be compliant an incentive by the Government would be a booster for CSR and Sustainability”. In South Africa, the CSR Compliant companies are given subsidies, national level Government Awards, rated and indexed on Stock markets. We are yet to do it and indeed have a long way to walk.

Our Government should foray to think on the lines of incentives and consider giving than only taking. It needs to device a strategy for inclusive economical growth engaging by giving benefits to not only social sector but also to India Inc. Most certainly, that move would boost CSR and Development of India at large !

I am working on a road to make India the most Sustainable and CSR proactive Country in the world ! Destination is far, walk is long, loopholes are enough, perseverance and persistence and consistent, search is for support…..

Snapshots for the latest conference:

At IAC speaking on next steps India should take to realize CSR.
At IAC speaking on next steps India should take to realize CSR.
On Panel with Dr. Bhattacharya's (IIM Banglore and Sustainability Institute)
On Panel with Dr. Bhattacharya’s (IIM Banglore and Sustainability Institute)
Recognized by South African team of IAC
Recognized by South African team of IAC
Social Return on Investment studies for ALERT INDIA, they are the oldest working to curb leprosy in India

We are one of the few  CSR Advisory firms working on Social Return on Investment (SROI) analysis in India.

 

 

 

 

 

 

Eventful Jan, Feb 2015

The last I wrote on Delhi votes and am glad Delhi gave a majority verdict to AAP, the child of India Against Corruption (IAC). The past 2 months have been eventful indeed ! In January 2015, I touched the highest power, it was a festival in Ahmedabad, Gujarat. Never thought that State Government could be […]

Sustaining Mergers and Acquisitions ~ The CSR way

mergers-and-acquisitionCSR and Sustainability factors in Mergers and Acquisition

The perception about CSR has always been about spending CSR Budget and is reinforced by the Government. This belief leads us to the prime challenge of de-valuing Intangibles and non-financial reporting’s.

In 2012, at the Strategic Growth Forum organized by E&Y I raised a query “Do the companies while mergers and acquisition consider CSR?”  The response was zilch and ambiguous. Today, in 2014 post the approval of Companies ACT 2013, I raised the same query and the response is the same. In fact, the answer of the M&A Professional was why is CSR factor essential while dealing in M&A?

It is flabbergasting to listen such questions from well-known philanthropist, industrialist to M&A Professionals. How de-valued are non-financial reporting, and intangible gains even after making maximum contribution towards the growth of the company.

On further dwelling on the issue I realize that people are less aware about its importance. There is less knowledge about methodologies such as Social Return on Investment (SROI), CSR Index and similar concepts in the developing nations. These techniques value the intangible work done by Social arms. The people impacted by the social activities become loyalists of the companies and can be valued as either marketers, enablers for smooth operations or any term wherein they contribute. If we look at Tata Jamshedpur Steel Plant, no other company can enjoy the trust, loyalty and goodwill offered by the community towards Tata group, can we undermine these attributes and make them valueless? Apart from Social and sustainable contribution the latest technique of Impact Investments are an undisputed value creator for a company’s performance, future and sustainability.

Non- Financial Reporting such as Global Reporting Indicators (GRI), Integrated Reporting (IR), AA1000, and other varied forms of reporting/frameworks add credentials to the company along with a means to learn the indicators which enable a company to run efficiently in a sustainable and socially responsible manner.

In times to come, it would be inane to focus only on Balance sheets and P&L statements of a company while M&A when other reports enable a company to generate business in sustainable fashion in years to come. CSR and Sustainability indicators are inevitable factors while forging M&A. It would be a very expensive proposal to overlook these factors in future.

We can cite the example of Patni who showed remarkable profits, assets in the financial records but in reality got a blow due to unethical practices. Patni was proactive on Social welfare activities front and won several awards for it but lacked on ethical practices thus making an unsustainable business proposition. On the contrary, it is hard to cite an example of CSR and Sustainability compliant company with low financial records.