CSRBOX Weekly Newsletter
Evolution of CSR
Corporate Social Responsibility (CSR) is the commitment of businesses which extends beyond corporate philanthropy and translates into integrating social and environmental concerns into their business operations with a goal of furthering social development goals in the society. In India CSR has come a long way, while the roots of the concept can be traced back in the chapters of history, the contemporary idea started taking shape around the twentieth century when Mahatma Gandhi introduced the concept of trusteeship. According to Indian traditions, it was believed that a company with sound financial health must fulfil social obligations to contribute to the country's socioeconomic well-being. Since then, the domain of CSR has been changing rapidly, with various laws and amendments coming into play. Following are some of the key milestones that CSR in India have achieved in the recent years:
Current scenario of CSR
There has been a strategic shift in the conceptualisation and vision for CSR initiatives over the last decade. The sector has steadily moved from mere compliance to impact-oriented engagement with the communities. It has been realised by the industry perhaps in their self-enlightened interest, the shared value that is inherent in CSR activities not just for the beneficiaries but also for themselves in terms of their brand equity and identity. The amount of CSR spent in FY 2021 stood at Rs 26,210 crore, which is almost twice the amount as compared to FY 2016, indicating not just the enhanced compliance but also the acknowledgment of the value of CSR as a tool for positive transformation. However, despite the growing expenditure, the effects of the same are not felt widely across society, which points out the need for improving the visibility, efficiency, and effectiveness of the CSR projects implemented by the organisations. The Ministry of Corporate Affairs (MCA) advises the data-driven and sustainability based approach towards projects executed under CSR. The key role in all of this is played by the implementation partners, as they are the one who executes the program on the ground. CSR regulations provide freedom to the companies to either undertake the CSR projects directly through their social arm or onboard an external implementation partner for the same.
CSR value chain established the role of the Implementation partner as the key actor, which determines the success of the project. Therefore, it becomes important to understand the role played by the implementation partner in effecting the social impact and change on the ground.
Who is an implementation partner?
Under the law, the implementation partner can be any organisation that is a section 8 company, or a registered public trust, or a registered society. It should also have registration under sections 12 A and 80 G of the Income Tax Act 1961, and be registered with the Central Government under CSR rules.
Implementation partners are like a lynchpin in the world of CSR as it is their action or inaction that decides the fate of the project. If left unmonitored, Implementation partners alone can dictate if the funds utilised under the project will be used for social welfare or will be redirected toward the unspent CSR account. They also hold the key to the organisation's brand image and reputation on the ground among the community. Broadly speaking, they can be classified on the basis of the following parameters:
So, what should an organisation lookout for, while selecting or onboarding an implementation partner for the project:
Importance of Partnership between Implementing Agencies and the Corporate Organisations
Implementing partners plays a fundamental role in the execution of the project. They’re responsible for a wide array of processes, right need assessment, a baseline study, and project implementation to monitoring and evaluation among other things. Through the life cycle of the project, the partnership between an implementing agency and the corporate organisation is crucial in achieving the objectives. Collaboration and allocation of specific roles and duties between the two are quintessential for the success of the project. With the coming of new mandates like impact assessments, the relationship between the corporate and implementation partners needs to be stronger than ever.
Way Forward
In the changing times, reporting has become more stringent and systems and processes more transparent, transitioning from an unsystematic approach to a more structured way of undertaking social welfare activities. Since many projects are implemented through implementation partners, there must be a mutual alignment with each other’s goals and objectives. A successful #CSR project requires both - delivery and adherence to various compliance measures. It has been observed that implementation partners, especially mid and small-level NGOs find it challenging to have all the compliance requirements in place. With the changing dynamics in the world of CSR compliance, it is also time to build efficient structures and practices at the level of the implementation partner. Capacity building and training of implementation partners is an effective way to fulfill such conditions much more smoother, which will be imperative in building successful partnerships in the future.
About the Author
Nupur Gohri works at CSRBOX as an Associate Consultant – CSR and Strategic Partnerships. She has done her post-graduation in Social Work from Tata Institute of Social Sciences, Guwahati. Having previously worked with development sector organisations such as UNICEF and WHO, she developed a keen interest in CSR and its applicability. Owing to a deep-rooted interest in the development sector, Nupur believes in continuous learning and keeping herself updated on the latest trend and developments in the sector.
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The Impact Talk was hosted by Adarsh T. . He works as a Fellow- CEO’s Office at CSRBOX.
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Despite CSR spending reaching Rs 26,210 crore in FY21, up 80% from FY16, the Ministry Of Corporate Affairs (MCA) has highlighted the limited impact of CSR efforts and noted that it is necessary to increase the visibility and impact of these invested funds because the effects of the CSR funding is not generally perceived.
SEBI has mandated the requirement for the top 150 listed businesses by market capitalization to receive assurance on their BRSR core elements to reassure investors and promote regulated disclosures on environmental, social, and governance (ESG) aspects. Under the assurance requirement, companies must declare and obtain confirmation on their value chain following the BRSR Core as of the 2023 FY.
SEBI (Securities and Exchange Board of India) has made #ESG (Environmental, Social, and Governance) rating providers obligatory to obtain certification within six months, which indicates that companies providing #ESG ratings must undergo a certification process to ensure their credibility and competence in assessing environmental, social, and governance factors.