By Charudutta Panigrahi
Recently Odisha Vikash Conclave witnessed the release of the White Paper- 2018, on Corporate Social Responsibility (CSR) in Odisha, the first of its kind by a state in India. Maintaining the consistency of an annual calendar since 17th May 2016, the white paper is authored by FIDR, the think tank and the compendium is an in-depth analysis of the CSR performance in the state in the financial year 2017-18. After the enactment of the Companies Act 2013 that, under its Section 135, has made India the first country to make mandatory provisions for companies falling under the ambit to spend 2% of the average net profits of three preceding years. Odisha was the first state to come out with India’s first CSR White Paper in 2016. A significant endeavor as it is, the document succinctly recounts the trend, spread, extent and scope of CSR in Odisha. The compendium encapsulates the findings of the study on social performance by companies operating in Odisha and has delved into their performance in different thematic sectors and geographic areas, and their mode of implementation.
The early years of corporate philanthropy included contributions mostly in setting up schools, hospitals, community development, women empowerment, planting trees, nurturing art and culture. We were used to such noble gestures and ‘feel good’ initiatives, but these ‘give-aways’ were remotely connected with their core business. So these initiatives get unsustainable, and can happen only till the point the company is profitable; more importantly, these ‘largesse’ by themselves will not drive the company to remain profitable or community centric. What is required is seamless integration of business strategy and sustainability initiatives. As an example, Hindustan Unilever (HUL) invests in research working with nutrition and health specialists in its ‘ready to eat’ food business trying to reduce salt to the recommended dietary levels, reduce trans-fat from vegetable oil, sugar from ready to drink teas, and drastically cut calories in children’s ice creams.
Integrating business strategies with sustainability initiatives, successful companies allocate resources to ensure wellbeing of stakeholders which also enables the company to acquire a key differentiator vis-à-vis its competition, thereby making the business sustainable. GE’s medical equipment division commits huge resources in African countries donating equipment to enhance healthcare to low income groups.
This year at the developmental conclave in Bhubaneswar, a new strategic paradigm, coined as CSR 3.0 by FIDR, has been unveiled. It is meant to provide a set of recommendations for building a better framework of CSR in the state. Helping to localise the SDGs (Sustainable Development Goals as set universally by the UN), CSR 3.0 puts emphasis on social impact. The new wave of CSR is from CSR to Social impact. There is a big branding shift that is happening for the companies and the developmental practitioners. A company’s pro-social program should not be any generic, rigmarole standard of responsibility or as “ compensation” for perceived negative effects. The social license to operate is no more the sole driver. It’s the human, environmental, societal and financial impact. CSR 3.0 for Odisha is a distinct shift from nice-to-have silo to a fundamental strategic priority.
Odisha hopes to see a surge in the coming years as it welcomes big business houses through its investment-friendly approach. And, at the same time, CSR 3.0 calls for a strategic and integrated approach by the companies and the civil society organisations in in executing their social agenda so that the government’s efforts to achieve SDGs and alleviate its social and environmental problems can be supported.
In this context, the release of the White Paper and the Policy strategy CSR 3.0 that contains adequate stuff to visualize the state’s CSR scenario is a praiseworthy step. The discussions at the gathering consisting of grassroots organisations, development practitioners, government and the industries have dwelt upon sectoral thrusts like the prime sector agriculture. Considering its importance concerning the livelihood situation of the state, it was commonly felt that agriculture has not been accorded the priority it deserves. Further, in the coming days, environment and climate change needs to be given more focus. Encouraging innovation to deal with the problems of climate change and frequent occurring of disasters in Odisha should be treated as a critical area by the corporate houses. And, the companies may keep aside some funds for promoting business start-ups.
If industry-wise contribution is considered, top three areas have provided more than 80% to CSR spending. Steel, Iron & Ferro alloys sector tops the list with over 40% spending, followed by Mining (20%) and Aluminium (20%) sectors. This may be ascribed to the fact that maximum numbers of industries are in these sectors in the state.
This compendium denotes that both the public (central and state PSUs) and private sectors are almost equally enthusiastic in implementing their CSR agenda in the state. Also, Odisha seems to be a favoured destination for the companies to execute their CSR programmes as the top ten companies having national presence have allocated their funding in the state.
Nevertheless, players from other growing sectors in the state like IT and ITeS have joined the CSR bandwagon. It was expressed by the participants that, small companies, even though they do not come under the ambit for mandatory CSR spending as per the Companies Act 2013, should be involved in their little way in the movement. Participation of more State PSUs is welcome.
In terms of geographical coverage, though 24 districts have been taken up, 6 districts (Malkangiri, Kandhamal, Nuapada, Boudh, Gajapati and Deogarh) with apparently lower human development index have been left out only because these companies do not operate in these six. Further, so many other districts have received only paltry funds. Whereas, Angul, a relatively developed district in the state, has alone received over 30% of the entire spending as it houses a good number of well-performing companies. This regional disparity is because of the ‘project area mindset’ of the companies, and it may not serve the interest of Odisha. Rather, they should see the state as a whole and make their efforts more inclusive.
It has been fairly understood from the white paper that though substantial amount of CSR funds are invested, programmes are implemented without conducting need assessment in terms of geographic area as well as thematic sector. Stakeholder engagement, specifically, community involvement, a crucial aspect for need identification and planning of CSR projects, is not followed in real sense. Owing to these, duplication of spending by companies, among themselves and with government schemes, is found to have occurred in some areas. Further, companies do not display seriousness in monitoring and evaluation (M&E) of programmes executed.
It is fine to comply with the mandatory provisions of the Companies Act. Nevertheless, CSR initiative driven by voluntary spirit is more intense and sustainable than that driven by the regulatory measures. For creating long-term impact and contributing to the developmental endeavour in Odisha, companies must integrate their CSR programmes with the schemes of the government.
Partnership with civil society organizations and NGOs for planning and execution purposes is desirable. The suggestion of the white paper for establishing a CSR platform by the CSOs (Civil Society Organisations) to guide and institutionalize CSR programmes in the state needs to be considered. This may ensure more optimised management of CSR resources which will complement and supplement the state’s development efforts.
Almost half of the districts in India are off the mark to reduce the mortality rates of newborns and work towards the target under Sustainable Development Goal 3 for 2030. The target is “ by 2030, end preventable deaths of newborns and children under 5 years of age, with all countries aiming to reduce neonatal mortality to at least as low as 12 per 1000 live births and under-5 mortality to at least as low as 25 per 1000 live births.” India still has the world’s highest number of deaths, about 1.1 million per year every year, among children under five and newborns, worse than sub-saharan Africa. But the International Monetary Fund (IMF) is confident that India will be the fastest growing major economy in 2018, with a growth rate of 7.4 per cent that would rise to 7.8 per cent in 2019 with the medium-term prospects remaining positive. How can we grow when you and I , a citizen & a corporate of this country, can’t take care of the new born and protect a life? Corporate programs should look for integrations with government schemes.
A new study to evaluate neonatal and under-five mortality at district level and state level in India, indicates that in Rayagada the mortality rate is 141.7, probably the highest in the country. My fear is not solely based on the findings of the report, which could be further analysed and debated upon. But I am concerned about the ground level situation in spite of the Ama Sankalpa initiative, a targeted intervention program for reducing Infant Mortality Rate(IMR) and Maternal Mortality Rate(MMR). The district had taken path breaking drives like a) creating 14 additional delivery points for facilitating institutional delivery. b) identification of poor performing sub-centres c) household level identification of pregnant women and ensuring institutional delivery by linelisting them at higher facilities like the CHC d) setting up Maa Gruha, where the pregnant mothers, specifically among the Particularly Vulnerable Tribal Group(PVTG) are housed for a week prior to the institutional delivery. Rayagada district is providing double fortified salt in the schools and anganwadi centers, containing iron and calcium to improve the nutritional status of adolescents, children and pregnant women. As one of the unique programs to tackle malnutrition, the Nutrition Rehabilitation Centre (NRC) under Sub-Divisional Hospital (SDH) at Gunupur has been upgraded from five bedded to ten bedded to accommodate severely acute malnourished children. The district has bike ambulance service available for ferrying pregnant women and critical patients from inaccessible areas like Kalyansinghpur block, Parsali under Niyamagiri Hill Range and Putasing where PVTGs like Dangaria Kandhas and Lanjia Sauras live, to hospitals. About 817 inaccessible pockets in the district have been identified where due to lack of roads, 102 and 108 ambulances cannot reach the villages.
Rayagada has major concentration of large size metals and extraction industries and hope and believe that this need and trend of growing commitment to sustainability and responsibility will mean that more companies would step up to address challenges outside the company. More companies will step up to help tackle the United Nations’ Sustainable Development Goals. We’ll see more corporations mapping the UN SDGs to their operations and values. It will be even more vital for companies to work together with states and NGOs to create value for societies, and in turn business opportunities that drive long-term, scalable value creation.
CSR is what CSR does.
CSR 3.0 is the latest wave of CSR and Odisha is witnessing it.
Voltaire had said that “Injustice in the end produces independence”. I would say, inequality in the end produces independence. Inequality has to perish.
CSR 3.0 has to lead the way as the “development lab”.