In its efforts to become a vibrant knowledge platform on sustainable development initiatives, ThinktoSustain invites knowledge experts and thought-leaders across the globe to ‘Green Dialogues’. The raison d’etre is to generate an appreciation of ‘sustainability’ issues facing business organizations, question our assumptions, and set a direction for future action.
It is our pleasure to invite Professor Sushil Kumar, Faculty with Centre for Food and Agri-business Management (CFAM) at IIM Lucknow. Prior to joining IIM Lucknow, Professor Kumar did his post-doctoral fellowship from University of Toronto, Toronto, Canada. He is currently associated with ThinktoSustain Initiative as an Expert on Climate Change and CSR Issues. For more detailed profile, click here…
We, at ThinktoSustain.com, present an Interview with Professor Sushil Kumar…
A. General Questions related to Corporate Social Responsibility (CSR), Sustainability and Climate Change
Question: Corporate Social Responsibility (CSR) has been interpreted in numerous ways by corporate across the globe. For some it means simply sharing profits or philanthropy while for other it means an integrated rigorous approach. What does CSR actually mean?
Answer: CSR, to me, means fulfilling responsibility towards all stakeholders. I draw the concept of CSR from the natural world. The way each living organism in nature (except human being) lives in complete harmony with its surroundings and tries not to fulfill its own needs at the cost of others in its vicinity but rather enriches them; the businesses should also contribute positively to all their stakeholders in the same manner. Simply sharing profits or philanthropy is just one dimension of CSR and does not encompass the multi-dimensional concept of CSR. Businesses have four types of responsibilities: economic, legal, ethical and philanthropic; and a socially responsible business should meet all these responsibilities.
Question: Of late, CSR has become a ‘mantra’ for business sustainability with a large number of organizations taking keen interest in launching new initiatives. Can we say that the concept has taken roots? Where do you think is CSR currently in its development?
Answer: At the global level, yes, I will say the concept has started to take roots. The way MNCs, especially European MNCs, have become serious about Sustainability issues, is worth commending.
However, in India, there is still a long way to go. In fact, till the time markets do not force businesses to integrate Sustainability into overall business strategies, the concept will remain just bolt-on approach for the businesses, which can be taken off anytime. Today, for most companies Sustainability is a peripheral issue because they are not being selected against by the markets. We need regulatory regimes which not only impose pressures on businesses to adopt Sustainability as an overarching business strategy, but also create markets – consumers as well as investors – which incentivize Sustainability.
Question: What changes do you see that have taken place over the last two decades (in terms of companies’ CSR landscape)?
Answer: In the last two decades, a lot has changed. Due to increased awareness in the society about environmental degradation, global warming, climate change, and socio-economic implications of ever-increasing corporate power, nation states have forced businesses to mould their business strategies to align with Sustainable Development objectives. At the same time, evolution of voluntary norms and proactive steps taken by some industry associations, have brought Sustainability agenda at the fore-front. Academia, too, has contributed a lot by suggesting alternative business strategies that promote cleaner, greener and socially-responsible production systems. All these are forcing the companies to internalize the costs hitherto passed on to various stakeholders in the production system, thereby increasing the cost of production.
Question: The concept of Corporate Social Responsibility is fast becoming familiar in companies throughout the world. Is CSR a Challenge or an Opportunity?
Answer: It is both, a challenge as well as an opportunity, depending on the lens through which a company looks at it. Initially, for some companies, it may pose some challenges, as they have to put systems in place to take care of CSR activities and their integration with the business strategies. But, companies having a broad vision, will not view this as a challenge, as the first mover advantage would soon convert this challenge into an opportunity – an opportunity to differentiate in the marketplace, an opportunity to sustain and increase market share, an opportunity to influence policies, an opportunity to contribute towards the broader social cause and thereby realize some higher purpose in corporate life. These opportunities do make a difference by integrating CSR/ Sustainability with the overall business strategy, and companies can, in the long run, reap rich dividends.
Question: How have the local communities changed their outlook towards industrial activity? What are the repercussions for organizations?
Answer: Increased pace of industrialization all over the world, and especially in the developing countries, has resulted in unprecedented demand for natural resources, most of which are non-renewable in nature. In the name of industrial development, communities dependent on these resources are being deprived of their only source of livelihood. At the same time, with increased exposure to urban areas, aspiration levels of the local communities are also rising. Companies are making all kinds of promises to meet the aspirations of local people in lieu their natural resources which are hard to fulfill. Hence, now local communities are becoming skeptical about industry’s/ government’s intentions and are not ready to part with their livelihood sources. The recent conflicts – Vedanta, Posco, Tata Motors – being observed between local communities and industry are the results of this.