05. CSR is a joke. Organisations do it for news and marketing
What is your Opinion : Yes or No?
Why is it so? = Pick your arguments Pointers
| Yes | No |
|---|---|
| CSR initiatives can be a powerful marketing tool, helping a company position itself favorably in the eyes of consumers, investors, and regulators. These initiatives can also improve employee engagement and satisfaction—key measures that drive retention. They can even attract potential employees who carry strong personal convictions that match those of the organization. CSR initiatives inherently force business leaders to examine hiring and management practices,where and how they source products or components,and the steps they take to deliver value to customers. | Triple bottom line, which dictates that a business should be committed to measuring its social and environmental impact, sustainability efforts, and profits.The adage “profit, people, planet,” known as the “three P’s,” is often used to summarize the driving force behind this concept. |
| Corporate social responsibility (CSR) marketing -When companies put their profits back into the very same people who help them make money, the marketing cycle is complete.
Coca-Cola’s My School initiative in India. It talks to its audience without resorting to the in-your-face tools of advertising. It helps build future customers. In that way, it gives and takes. It gives resources today to support a nation of school-going children.
No corporate organisation must invest its money into CSR without purpose. Corporate organisations are run by stakeholders—by shareholders and employees— among others. The organisations must aim at profit in their ventures, both commercial or CSR oriented. However, in making this profit happen, it is not wrong if good money can chase good causes. Brands such as Coca- Cola, Marlboro, Dettol etc that touch billions across the world use CSR in their marketing approach. |
But if the benefits sought through the CSR are blatant or unreasonable, the action becomes counterproductive and is bound to have a negative impact on the brand. When you think of the ‘real’ campaigns, Coca-Cola’s ‘Support My School’, Aircel’s ‘Save Our Tigers’ or Tata Tea’s ‘Jaago re’, most audiences will have a visceral calibration of where the campaign falls on their acceptability line. Therefore, CSR is never only about marketing but has innate social responsibility at core. |
| CSR began when companies first looked at their corporate bottom lines and discovered profit. Having discovered profit, and investing that profit or splurging it into everything that was possible, such as personnel training, corporate junkets, corporate jets, profit had to find its way into society. CSR is the last thing that a corporate enterprise does. CSR expenditures typically have been “safety valve expenditures”. | CSR strategy shows a company is compassionate and treats all people, including employees, well. For their loyalty, consumers expect brands and businesses to not be all about making a profit, but to give back to society. According to a 2015 survey by Nielsen (registration required), more than 50% of consumers are willing to pay more for a product or service if the business prioritizes sustainability. This tells us that consumers will opt for and stick with companies that aren't just profit-oriented. Investors consider CSR a sign of "ethical corporate behavior, which reduces investment risk." |
| The Volkswagen scandal has shown us that CSR allows companies to parade their virtue, and look good, while internal standards are allowed to slip. Obscene CSR marketing - Tsunami - ‘marketing-think’= top of the trucks emblazoned with their brand logo. This was for the media helicopters. | At the outset, corporates look after their immediate physical environment as a CSR activity. Then the mindset changed and companies started thinking beyond their geography by picking up causes. They picked up causes adjunct to the industry they belonged to. For example, a company in the tobacco segment looked at health, a marketer to kids looked after the under-privileged kids. Subliminally, if not overtly, the connect always existed. |
Some Additional Data Points You should know for opinion building :
Corporate social responsibility (CSR) is the idea that a business has a responsibility to the society that exists around. CSR is traditionally broken into four categories: environmental, philanthropic, ethical, and economic responsibility. India became first country to mandate CSR through a law. CSR spending stood at Rs 26,210 crore in FY21, having grown 80% from FY16. “However, the impact of the CSR funds is not widely felt and there is a need to enhance the visibility as well as impact of these invested funds.
It is important to execute CSR efforts strategically, with the right balance of capital investments and operational expenses. Wide regional disparity in the deployment of the CSR funds and called on companies to balance their area preference with national priorities. just ten states--including industrial ones such as Maharashtra, Gujarat, Karnataka and Andhra Pradesh--grabbed over 44% of the CSR funds in FY21, while the eight north-eastern ones received a mere 0.91%.
The potential reason for such disparity could be the stipulation under the Section 135(5) of the Companies Act 2013 that companies should give preference to the areas around which they operate while allocating CSR funds. However, it's not mandatory to do so as the world has become too intricately close with the advent of digitalization and it is difficult to define what the local areas of operations are.
Education, healthcare, and rural development have remained the top receivers of the CSR funds. According to the official data, between FY15 and FY21, the education sector (including education, livelihood enhancement projects, special education and vocational skills) received Rs 47,188 crore, or about 37% of the total CSR spending. The health sector (including healthcare, poverty, eradicating hunger, malnutrition, sanitation and Swachh Bharat) comes next, with a 30% share in such expenditure amou ting to Rs 38,011 crore. Rural development projects received Rs 12,300 crore, accounting for 9.6% of the total CSR expenditure.
Further, to create a sustainable programme of CSR, one needs to balance two opposing forces. First, the farther removed the corporate social responsibility is from the core of the business, the more trust it will generate. At the same time, the more direct the connection between the CSR and the business, the more sustainable it will be. Companies which get this balance right, accrue benefits that are highly resistant to erosion over time. CSR is a good strategy but only in the long-term. .
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Balanced Conclusion / Way Forward :
While many organisations undertake their social responsibility as charity, many undertake it to fulfil their marketing needs or to give a positive disposition to their brands. However, all of them understand the personal- social benefits that accrue from acts of altruism.
As organisations expand to include more external aspects creating a progressively larger responsibility circle, they become more and more relevant to their ecosystem. There is need to ensure the initiatives undertaken become self- sustaining so that the CSR programmes can run seamlessly without being a burden on the companies themselves. For instance, a responsible mining company may rehabilitate the people displaced as a direct result of its operations. If it considers more of its impact as its responsibilities, it may even replant trees to undo the damage caused by it to the environment. If it further increases its internality sphere, it may go further and invest actively in creating an ecological hub on the previously mined area.
It is quite natural for an organization that exists for profit to seek direct or indirect benefit from all its actions including CSR. Seeking benefits, be it marketing, community, image or other subtle benefits from the CSR is acceptable, beneficial and even recommended.
The importance of CSR cannot be understated for it shows the organisation’s integration with its society. It is, however, important to temper expectations from CSR. Most importantly, CSR must be an extension of the organisation’s state-of-being and not just an activity that needs to get ticked off in the check-box.
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