Question: Can profitability become a ‘bottle-neck’ for organizations to implement CSR or, in other words, can organizations afford CSR? Can we say that CSR has the ability to build or damage a brand?
Answer: I don’t think being socially responsible leads to lowering of profits for a company. Moreover, it also depends how we define profits. If we define profit in terms of stakeholder value, it will certainly go up with adoption of Sustainable business practices. Similarly, it will also depend upon the short-term or long-term perspective a company takes. There are a lot of studies that prove that profitability of a company is positively correlated with CSR/ Sustainability initiatives. Such initiatives can certainly contribute positively to building a brand. At the same time, any adverse event happening due to negligence of environmental or social issues can lead to damaging a company’s reputation. Recent oil spill in Gulf of Mexico has caused huge losses to BP, reputational as well as economical.
Question: Some corporate believe that it is the State’s responsibility to handle land acquisition and subsequent displacement issues. What should be the boundaries an organization should set for itself?
Answer: Yes, there exists a school of thought according to which the State should be responsible for making the necessary resources available to the corporate to produce goods and services needed in a society. Corporate should not be held responsible and they should not be made suffer because of any inefficiencies in the acquisition procedure.
This argument seems quite convincing, but viewed in the light of the fact that today, of the 100 largest economies in the world, 51 are corporate, it becomes a little shaky. With the increasing corporate power, the degree of influence they have on various policies also increases and these policies take care of the business interests and not necessarily the interests of the masses. Hence, it is the responsibility of the corporate to ensure that the acquisition process is fair to all the parties involved. If an existing regulatory regime is not fair, corporate should move beyond their legal responsibility to take care of the losers in the process. CSR/ Sustainability do not mean fulfilling only the legal responsibilities. Businesses need to come out of the compliance mode and move beyond to fulfill their ethical responsibility or the normative contract they have with their stakeholders.
Question: Can CSR be viewed beyond the ‘regulatory’ regime? How can organizations devise strategies?
Answer: In fact, the core of CSR lies in moving beyond the regulatory regime. Organizations can devise strategies for this by adopting voluntary norms and practices which are generally third-party certified. For example, by becoming a member of Fairtrade, a company can put Fairtrade logo on its products which sends a signal to the consumers that primary producers of the goods in the value chain (e.g., Cocoa growers, in case of chocolate) have been given remunerative prices for their supplies to the company. Taking up philanthropic initiatives also makes a company move beyond the compliance mode. However, company should always take up such initiatives which align well with the business core functions (strategic CSR).
Question: Regarding climate change and sustainable development, do you think Indian industries are well-aware and well-informed of their responsibilities towards environment and community?
Answer: I can’t say with surety that Indian companies are well aware of their ‘responsibilities’ towards environment and community. But one thing is for sure – that their level of general awareness about these issues and implications to the businesses has increased after 2005. Most Indian companies are small in size and that is one of the reasons that they find it difficult to relate themselves with such broader issues, which to many, look abstract. Secondly, Indian businesses traditionally have been family-owned businesses. These business houses lack professional approach to the issues of Sustainability.
Question: How has media made an impact on organizations’ CSR strategy? Has the effect been positive or negative?
Answer: Media has contributed very positively in this field. Major national dailies have covered various aspects of Sustainability and its implications for the businesses. In fact, recently, in one of the major business newspapers, I came across 3-4 good articles on the theme of Sustainability, which is a very positive development.
Question: How can CSR bring in more transparency and make a company more interactive with its customers?
Answer: We need measurable and verifiable standards which can be used to mobilize different market participants, most important being the customers, to incentivize CSR. In India, there is a complete lack of measuring and reporting standards and because of which customer trust can not be attained.
Question: These days there is lot of hype about ‘eco-products’ and ‘green-products’ – in advertisement campaigns, etc. Do you think that the concept of green-marketing is relegating to green washing?
Answer: In the absence of credible system of third-party certification, corporate claims of ‘eco-products’ or ‘green-products’ can easily be relegated to ‘green washing’ by the society, especially by the social/environmental activists. With so many claims being made using different terminologies (the meanings of which are very subjective), authenticity of which is very difficult to be checked by the consumers, a lot of people have become skeptical of such claims. Exxon Mobil through their publicity claimed that they were reducing GHG emissions and established itself as an eco-friendly company, which was not the case. Many infrastructure companies in India are promoting their residential projects as Eco-friendly, without any ways for the customers to go and verify such claims.
What we actually need are well-defined and well-regulated standards for all kinds of claims related to Sustainability.
