Strong and focussed and long term impact CSR projects will motivate employees, society and local authorities at large.
Dr. Rupal Tyagi
Dr. Rupal Tyagi is Lead-Research and Reporting, CSR Intelligence Unit, CSR India Management Services LLP, a project management and a CSR consultancy firm in India. She holds a Ph.D. in Corporate Social Responsibility (CSR) from Indian Institute of Technology (IIT), Roorkee, India. She is also a gold medallist for her outstanding academic endeavour in Masters of Business Management. She is incessantly publishing articles and papers on CSR, sustainable development, competitive advantage, social and environmental reporting and so forth.
What has been the experience of some other countries like Denmark, Norway, France and Australia, where CSR has not been mandatory, but the reporting on activities and amount on same is only required to be disclosed?
Denmark, Norway, France and Australia have shown considerable improvement in the quality of their CSR projects post the implementation of the Reporting mandate. However, this cannot be justified with any empirical/ authorized published data.
How well would the companies be able to motivate the employees, society and local government in places where it may be operating, while carrying out business, by using CSR as a tool?
CSR as a broad based tool cannot be the only reason for motivation. That said, if the project is done with clear direction and focussed impact, it will make a positive dent on its stakeholders. Strong/ focussed and long term impact CSR projects will motivate employees, society and local authorities at large. Though, employees will be indirectly rather than directly motivated, as the present guidelines don’t allow Employee Engagement as a part of their CSR strategy.
How will the corporate law make it possible to ensure that the companies do not use CSR activities as a profit making activity to their benefit in the long run?
Like any other law, it is about the placement of checks and balances post implementation of the law. The correct way to know if the guidelines will not be misused will only be possible if we have a very robust and just measuring and auditing mechanism. Again, like any new initiative this particular law will also go through its metamorphosis post the nascent stage of implementation. A strong focussed regulator will help avoid any misuse.
How well is the corporate sector in India evolving till date to take on the CSR duties and later weigh the advantages received out of same?
It is too early to say anything about the impact of company law. However, on the CSR front, it’s not up to the mark as yet. Corporates are not clear where they can utilise and spend their budgets & are still going through their necessary “social” evolution. The country has huge funding coming in every financial year, which needs to be rationalised as per the corporate goals rather than on donation of blankets etc. every year. Government is very conscious about social development of the country but if you look at the work done by PSUs in social development, it has a stronger flavour of philanthropy.
What kind of activities is likely to get a facelift following the clarifications on CSR in draft for Companies Act?
At this particular draft stage of the law, it will be unfair quote the present activities which might be termed as face lifted for the benefit of the law on a later date. For example, Employee Engagement activities (if the CSR bill hadn’t clearly mentioned it) could have been shown as a part of CSR activities with a bit of facelift.
Are there any chances of government social spending burden coming down following the enforcement of law?
Under ideal circumstances, the government social spending burden should slowly come down. But, we are a country of many complications and legacy issues, and the real difference will only be known in the years to come.
Do you feel the draft guidelines on CSR in Companies Act 2013 have addressed all the desired issues relating to CSR?
No, but the law is still in the draft stage and the lawmakers are seemingly open to more suggestions. For example, employees are an integral part of the society impacted by the individual company and, they and their families deserve contribution from CSR spending. Further, the law should address the employee volunteering hours as well which might be in major corporate agenda, which has its equivalent financial value as CSR contribution.