The Companies Bill 2012 is expected to bring a significant change in how companies implement and communicate their Corporate Social Responsibility (CSR) programmes. While the intended objective is genuine social development among communities, there will also be benefit for corporations.
The Bill, which has already been passed by Lok Sabha, is ground-breaking - probably the first of its kind globally and a move in the right direction for India. In short, companies meeting specific financial thresholds are now required to devote a minimum of 2 per cent of profit after tax (PAT) of preceding three years toward social spending.
Backers of the law are hopeful that deserving programmes will now see an infusion of new support and participation. Others are a bit more cynical, wondering aloud if corporates will create undue hype around the opportunity, creating a PR stunt, while doing little more than throwing money at problems for which funding is not the only solution.
Thankfully, the Bill addresses some of these concerns by providing directional definitions of what CSR may or may not be, and anticipated reporting formats for ensuring transparency. With more specialised CSR personnel engaged in the process, whether consultants or in-house, outcomes will be genuinely strengthened. I also believe communications around CSR will become more specialised, both for compliance and for strategic differentiation.
It’s important to remember that CSR is not about charity, or throwing money at a problem. It’s about community partnerships, stewardship and the development of better practices for all. It is understood that key stakeholder relationships improve when businesses do good work on behalf of their local communities, but what about stakeholder perceptions at large? This is an important reputation risk, and performance parameter.
While there is much to be gained from promoting CSR initiatives, in the absence of a real plan or policy, corporations might find themselves defending against accusations of green-washing, or covering up questionable practices. And there may be public perception that corporate India shouldn’t even take full credit for allocating higher resources to CSR because they are being forced to by law. The evolving situation merits some planning ahead, because formulating a good CSR communications strategy requires understanding more than just the programme. It means understanding stakeholders and how they are affected, and how their perceptions and behaviour can impact the company.
There are basic essentials to every successful communications plan -- like knowing the audience, delivering a clear message, and channelling the message through trusted and credible sources in order to reach the target audience. Formulating a successful CSR communications plan is really no different, but there are other factors that must be considered.
1. First and foremost, assess the needs of the community and determine what contribution the programme is making. Identifying how and where to allocate CSR resources is a critical first step. What value is the programme delivering, and is it a value that can be measured?
2. Be thoughtful about the messaging. It must articulate why certain practices have been targeted. On the face of it, most CSR programmes are rooted in a good cause and do deliver benefits to the larger community, but pressed by the new law to devote resources to corporate responsibility programmes opens companies up to potential criticisms. Make sure your company’s CSR objectives make good business sense and are consistent with the overall operations.
3. Do away with the communication silos. By putting the name of the company behind a particular cause or initiative, it becomes a part of the brand and should be treated as such. Certainly the CSR communications plan warrants its own resources, but it doesn’t always have to stand alone.
4. Make sure the plan highlights the action, and the mobilisation of people and resources used to improve practices. The story is not about charitable giving, it’s about creating change and enabling progress.
5. Don’t just broadcast, create a dialogue. Because CSR is about empowerment and partnerships, it presents a unique opportunity for companies to educate, engage and actually mobilise people toward a cause. Whether it’s a programme targeting environment sustainability, health, education or human rights, keep stakeholders engaged in conversation using social media, in-person meetings and live events. Listening is just as important as telling the story, and will go a long way toward ensuring success.
Prema Sagar is Principal and Founder of Genesis Burson-Marsteller