In an HBR blog The truth about CSR Kasturi Rangan, Lisa Chase, Sohel Karim dissect the CSR initiatives of many companies and come out with three categories in which the CSR initiatives typically fall. The categories are kind of intuitive:
- Philanthropy or donation / charity
- Improving Operational Efficiency – this includes things like reducing waste, reducing consumption etc
- Transforming the business model – here they quote interesting examples of what Hindustan Lever did with women in rural India – where they increased their market share and reach by converting thousand of women as their distributors – both increasing their household income and increasing their sales.
They go on to suggest models that companies should use for most effective use of CSR initiatives.
So, What the authors are suggesting is make the best use of CSR dollar spend and make it work to drive more profit for the company – may be in the garb of social consciousness while generating some numbers that show that you are making an impact on the society. They talk about giving loans to farmers to increase productivity and to buy the produce at a certain price from them. To me CSR would be if you help them increase productivity irrespective of who they sell their produce to. Otherwise it is just a business investment with an expected return.
Second it made me think, would the real CSR not be to do business in a fair way, by not taking unreasonable margins on your products that directly impacts all your consumers and in a way also helps you increase your customer base. When you do that there is no need for you to do extra effort to show that you care. Otherwise, first you are squeezing your customers to pay you more and then passing them something back in the name of CSR. I understand the purpose of business is to make profit but should be profit – as much as possible at whatever cost? That is a question that businesses need to ask themselves. Where did the need for CSR come in the first place? Will businesses respond in the same way as they do to somehow adhere to other regulations / norms / trends etc.
Time to think and re-align your base strategy.