The Rise of Corporate Consciousness Amid the Pandemic

How India Inc. Leveraged CSR for the Greater Good.

The COVID-19 pandemic has thrust business leaders into the spotlight for managing the crisis with a heart—and a rekindled social conscience. In the past year, there has been a surge in corporate India’s interest in fulfilling their socially responsible practices that goes beyond their usual philanthropic activities. As it turns out, even as the corporate landscape evolved with the times, Corporate Social Responsibility (CSR) underwent a paradigm shift amid the pandemic. Global organisations became catalysts of change and sought to make good on their commitment to bring about a positive impact on the world. They took extraordinary measures to develop a purpose-driven approach that would not only create a societal impact, but also align with their long-term organisational goals.

Corporates in the frontlines of the pandemic

From the word go, India Inc. rose in solidarity to mobilise resources to mitigate the crisis.

In the early days of the pandemic in 2020, when the term ‘new normal’ was gaining currency, Tata Trusts pledged ₹500 cr. emergency funds to aid the frontline medical workers in the battle against the virus. The funds were utilised for PPE (personal protective equipment), testing kits, setting up modular treatment facilities and the training of health workers, showcasing the company’s steadfast commitment to playing a vital role in the pandemic.

When COVID-19 proliferated the country, Mahindra Group offered their holiday resorts as temporary care facilities, leveraged their manufacturing units to make ventilators and created a fund to help the struggling MSME sector. The company’s plant kitchens across the country opened canteens to cook and supply food for the migrant labour. When the second wave of the pandemic hit, the Mahindra Group launched ‘Oxygen on Wheels’ (O2W), a free initiative that supplied oxygen to hospitals and medical centres.

CSR: An opportunity and a responsibility for India Inc.

Indian companies swiftly responded to the nation’s needs when COVID-19 disrupted the way we live and work. The pandemic came at a time when organisations were already working towards expanding their CSR footprint to meet the financial, educational and medical needs of vulnerable communities. Thus, the health crisis only served to step up their CSR efforts further. They viewed it as an opportunity to give back better to society.

For example, FMCG major Procter & Gamble partnered with the government and pledged ₹50 cr. towards the vaccination of over 5 lakh citizens. The company also pivoted and ramped up its manufacturing capabilities to produce masks and sanitizers to aid frontline workers. It launched an initiative called ‘Suraksha Circles’ and engaged with over 1400 organisations and SMEs to lay down standards of hygiene and safety at manufacturing facilities.

Wipro Ltd, Wipro Enterprises Ltd and Azim Premji Foundation, have together committed ₹. 1125 crore CSR funds to combat the pandemic. This amount is over and above the three entities’ annual CSR spends. Hindustan Unilever Limited pledged ₹100 cr. for COVID-19 relief efforts and also contributed over ₹1 cr. soaps and sanitizers to vulnerable communities. The organisation has also led awareness campaigns, and provided free sanitation and hygiene products to frontline workers.

Clearly, India’s iconic corporates contributed beyond the stipulated 2 percent of their three-year average annual net profit on CSR to meet the unprecedented demands posed by the pandemic. Several companies jumped into the fray and partnered with the government to donate crores worth of donations to various COVID-19 initiatives. For example, the Aditya Birla Group contributed ₹400 cr. to the PM-CARES Fund and adopted a multi-pronged response mechanism to fight the pandemic.

Organisations should also leverage their CSR efforts to design impactful skilling and upskilling programs. This will provide sustainable livelihood opportunities for those who may have lost their jobs during the pandemic or find their skills obsolete in the competitive marketplace.

Incentivising CSR in the COVID-19 era

The largesse of corporate India to combat the pandemic has been duly recognised by the Government of India by amending the CSR spending rules during these challenging times. At the start of the pandemic in March 2020, the Ministry of Corporate Affairs (MCA) announced that all expenditures incurred by organisations for COVID-19-related activities would be accounted as permissible avenues for CSR expenditure. In 2021, as per the framework of the new CSR rules, companies can utilise funds for eligible CSR activities such as setting up makeshift hospitals and medical oxygen generation and storage plants; contribution to the PM CARES Fund, creating awareness campaigns and public outreach programs, among others. The amended CSR rules allow companies to set off CSR expenditure above the required 2 percent expenditure in any fiscal year against required expenditure for up to three financial years. More clarity on COVID-19-related compliance would enable corporates to strategically plan their CSR outlays for the current fiscal and even beyond.

In my view, the revised provisions will inspire corporates to boost their CSR efforts and remain committed to the “act of giving” even after the dust settles on the pandemic. Transparent and flexible regulatory compliance policies will go a long way in encouraging business leaders to tread the fine line between purpose and profit through ethical CSR practices.

A more authentic CSR for the post pandemic world

India’s complex problems present a unique opportunity for corporates to contribute to the economic growth of the nation and channel CSR funds in the areas of education, healthcare, livelihoods and digital literacy, among others. Sadly, COVID-19 has only exacerbated the gap between the haves and have nots. This is where proactive CSR initiatives will enable corporates to stay engaged with the society at large.

As these difficult times have shown, in a crisis situation, corporates should be better equipped to discharge their CSR obligations and recalibrate their spending strategy to create long-term social impact. The silver lining to the pandemic has been the renewed focus on collaborations with stakeholders as the true power of CSR lies in its collaborative approach. Ecosystem partners should pool resources together to create meaningful impact at scale. Corporates cannot rest on the laurels of their past philanthropy—they should be proactive and join forces with the government, public sector and NGOs to serve the needs of the underprivileged.

However, despite all the goodwill pouring in from corporates, how does one assess the impact of CSR initiatives on the targeted communities? I believe the time is ripe to set new parameters to measure the success of CSR initiatives. Financial and social innovation mapped with India’s sustainable development goals will create shared value for the greater good. Further, business leaders should promote a culture of volunteerism and invest in the well-being of local communities.

CSR activities in the post-pandemic world should also focus on promoting entrepreneurship as this empowers and enables ecosystems to rise to the needs of the changing economic landscape. This could be a good time to support budding entrepreneurs who want to build sustainable enterprises and ‘pay it forward’ in society.

India was the first nation to legally mandate CSR in 2014. Since then, more and more companies have incorporated CSR into their core strategies and demonstrated their commitment to the upliftment of society. I strongly believe the pandemic has given a new lease of life to CSR, paving the way for enhanced corporate accountability buoyed by the recent reduced punitive regulatory actions.

If this trend continues, corporates will enjoy the act of giving and appreciate its true merits. Simultaneously, their employees, customers and other stakeholders will applaud the authenticity of their CSR initiatives and not label it as a mere marketing gimmick. Therein lies the crux of the matter.

– Ravi Narayan, CEO, T-Hub

NOTE: This article was published in India CSR on September 13, 2021 with the title The Rise of Corporate Consciousness Amid the Pandemic: How India Inc. Leveraged CSR for the Greater Good.