The Approach Of Organisations Towards Sustainability In 2018

Sustainability is no longer about just meeting legal obligations. Long gone are the days when companies had to be forced by law to dedicate time and resources to CSR initiatives. As public consciousness around CSR -- and consequently accountability -- has grown, so too has sustainability become an inseparable part of doing business and is today integral to the achievement of a business’ financial goals.

Companies have realised the importance of making a socio-environmental impact with their activities. For instance, nearly half of the top 10 spenders spent more on CSR activities than the prescribed limit in Fy 2017. At the same time, the scope of CSR has expanded far beyond simply throwing money at social causes. Companies today aren’t just investing money in CSR but also time. They are a lot more involved and engaged with the initiatives they spearhead. This trend will become more prevalent in the coming year. Sustainability will become an even more integral part of doing business.

Focus areas in 2018

Skill development, health, education, sanitation, water conservation, renewables, waste management and drought mitigation will be the primary areas of focus for the CSR efforts of companies in 2018. The objective of the initiatives will be threefold: improve the livelihood of communities, protect the environment and conserve scarce natural resources.

Partnering with the Government

The upcoming year will see companies team up with the government in public-private partnerships to further initiatives like Skill India and Swachh Bharat Abhiyaan. This is already happening. Tata Trusts has deployed 600 Zila Swacch Bharat Preraks (ZSBPs) to assist the government in making India free of open defecation. Similarly, the Godrej Group, under its Good and Green sustainability strategy, is administering malaria eradication programmes in nine districts in Madhya Pradesh. This trend will gather steam in 2018, spurring on the government’s efforts to effect social change and sustainable development on a national scale.

The rural community

The rural sector will be an area of particular focus for companies’ CSR programmes in 2018. Falling farm incomes and a lack of jobs in rural India mean there’s a lot to be done for the upliftment of communities in the country’s villages. Companies like ITC and HDFC bank are penetrating deep into rural India with measures aimed at empowering entire communities. ITC, for instance has committed itself to looking after communities that its agri-business unit works with as well as communities residing in the vicinity of its production plants. HDFC bank is working to address the financial inclusion of the rural communities and other developmental issues. This Holistic Rural Development Programme (HRDP) now covers 750 villages. Meanwhile Godrej, too, has trained over 3 lakh beneficiaries in the rural sector as part of its skill-based training programme.

Integration of sustainability into mainstream business

As I mentioned above, sustainability is increasingly becoming an inseparable part of doing business. Organisations are realising that they have a responsibility to the society that consumes their products and services. Hindustan Unilever Ltd (HUL), for instance, sources 100 percent of its agricultural raw material from sustainable sources. The company’s tea procurement project is a prime example of this. More and more companies are making sustainable practices an integral part of their business models and this trend is only set to gather pace.

Sustainability is no more charity

As I also mentioned, CSR today involves more than just throwing money at a problem. This trend of moving away from just indulging in charitable activities will continue with organisations strategically institutionalising CSR activities. Philanthropy, sustainability, CSR, call it what you will, involves giving, but it’s giving in so much more than just monetary terms. Money is the least of what the modern day approach to CSR demands. Today CSR demands time, it demands sensitivity, it demands empathy. But, above all, it demands the desire and the will to make a difference. This desire and will is increasingly to be found in modern day companies.

In 2016, less than four percent of the CSR spends were towards charity. Companies are increasingly looking at mechanisms to enhance their strategic brand value through active involvement in projects that make a social impact. FMCG firms that source raw materials from farmers will make an effort to ensure that their livelihood is secured. Energy companies will invest in environment-friendly projects such as waste management and emission control to mitigate their risks regarding the loss of reputation.

Measurement of effectiveness

Another area which is seeing greater focus is monitoring. Companies today care about what they call a social return on investment. Indian companies are going global. With this comes accountability to international investors who are keen on the effects sustainability practices adopted by the companies are having. Also, with SEBI and the Government taking an interest in declarations about CSR activities, this is an area which will see significant attention.

Adoption of technology

Technology has begun to play a prominent role in the implementation of CSR initiatives. Its role goes beyond simply monitoring the progress of programmes. It is integral to the way activities are carried out. For instance, training on skill-based programmes will be delivered on hand-held devices or through portals. It will therefore be accessible to a larger base of beneficiaries while at the same time giving them the freedom to learn at their own pace and convenience.