Emerging Corporate Social Responsibility policies and innovation: Indian perspectives

Subhasis Ray, Xavier Institute of Management, Bhubaneswar, India

This paper discusses emerging CSR policies in India and their possible implications for understanding innovation in emerging economies. I suggest the need to look more closely at the practices and the broader set of corporate activities that are often interchangeably termed as Corporate Social Responsibility, corporate citizenship, sustainable development etc. Many Indian corporates have engaged more in pure philanthropy, donating a part of their profits for the well being of the community. The last decade has seen a shift in this engagement, followed by ideas of strategic corporate social responsibility (Porter, 2006). CSR expenditure is related to projects in environment, health, infrastructure, education and art & culture. The systemic objectives of such initiatives are broadly capacity building among stakeholder groups, strengthening institutional mechanisms and service delivery, improving governance and entrepreneurship development. Businesses engage in such activities for many reasons: to get a social license to operate, comply with regulations, create business value or pure philanthropy. Much of the CSR activities are likely to be driven by the new CSR guidelines coming into force in India.
CSR policies and regulations are making sure that corporations contribute to the immediate community as well as the larger society and integrate that work with broader governance objectives. Taking a cue from Europe, the department of public enterprise, India issued a voluntary CSR guideline in 2009. It provides indicators and markers for developing a CSR policy. This policy was followed by the CSR guidelines for public sector undertakings in 2010. The Government intends to make CSR a part of the new Company Act coming up in late 2011. The two guidelines have quickly resulted in CSR policies at the company level at all public sector undertakings in India and a roll-on effect is expected from the private sector, as evidenced from recent court rulings. (Supreme Court, 2011)
While the emerging policy does a good starting job, it fails to use CSR as a platform for good governance as well as a beta site for innovations in respective regions and industries. From a resource perspective, industries are rich in their talent pool and high on their drive to achieve breakthrough innovation as most managers are paid for short term results. Hence, this paper argues that a corporation has the potential to collaborate with governments to create more sustainable eco-systems. Such collaborations can be in all priority areas. Linking innovation policy, that could alter the social landscape, with mandatory CSR policy, can help emerging economies leapfrog to the next level of growth and development. To do that effectively, there is a need for linking a) Perspective plans for regions/ cities, b) Innovation policy, c) CSR policy d) Incentive scheme for stakeholders.
Secondly there is a need for formulating industry level CSR policy as CSR priorities are different from one industry to the other.
Thirdly, innovation and CSR need to be interdependent and CSR impact measurement should look at social innovations and not just programme executions. Products like GE’s portable ECG machine, Tata chemicals ‘Swachh” (low cost water filters), TCS’s software for achieving literacy in 40 days need to be replicated. A government driven, policy design linking CSR and innovation can do just that.

About the speaker
Subhasis Ray teaches at the Xavier Institute of Management, Bhubaneswar, India. His research interest is centered on Corporate Social Responsibility (CSR), sustainable development and business strategy. His doctoral work uses case research methodology and focuses on CSR issues in oil and mining projects. He has worked with leading multinational groups like BP, Hilti Corporation and the TATA group and has been teaching management students for the last eight years. He has consulted companies in the Middle East and Europe. He has edited books on CSR and published articles and papers from John Wiley, Springer and Palgrave in peer reviewed journals and books. He co-designed India’s first one year course on ‘Management of Resettlement, Rehabilitation and Corporate Social Responsibility’.

Venue: UNU-MERIT New student class room (Fourth Floor)

Date: 22 February 2011

Time: 12:30 - 13:30  CET