CSR 2.0 – An Active Approach Towards Creating Shared Value
By Manishankar Prasad
Corporate Social Responsibility (CSR) is the new business buzzword in corporate strategy with the advent of ISO 26000 – a voluntary standard concerning compliance to social norms and sustainable development. However, the current CSR paradigm is usually focused towards attaining compliance and branding, and not focused on creating ‘shared value’ with communities. There is a need for an evolution towards CSR 2.0 with an active approach towards creating shared value.
CSR initiatives such as the ISO 26000 and Global Reporting Initiative (GRI) are compelling companies to have regular sustainability reporting which covers social and environmental aspects. Many countries including India have regulations concerning the compulsory reporting of CSR and sustainability efforts. However, the current CSR paradigm is usually towards attaining compliance and not really to create shared value with communities. In addition, some companies treat CSR as only a means of branding with the ad-hoc social or green campaigns, or as a means of improving the potential market space for their products and services. It is common to see the CSR function under the corporate communications or marketing team, and not fully integrated into the company’s strategies and policies.
Moving forward, there is a need for an evolution towards CSR 2.0 with an active approach towards creating shared value. This improved CSR will engage the community actively and focus on benefiting both the community and the business. Here are some examples of what CSR 2.0 could look like:
The transformative social enterprise and community development movement in the Philippines is called Gawad Kalinga (GK) founded by Tony Meloto. GK in Filipino language means to “give care” or “to award care”. GK partners companies such as Shell, paint manufacturers and construction material providers on a co-branding model to catalyse social impact beyond tokenism and greenwashing. GK builds sustainable communities and provide sustainable livelihoods which the Filipino Governments in succession have not able to render in the grossly biased remittance-based economy. Tony features in Shell advertisements and enables a win-win model for both.
In the Singapore context, companies can tie up with Aidha or the World Toilet Organization to gain visibility as well as implement wide scale social impact in communities in South East Asia. Work Integration Social Enterprises (SEs) can tie up with MNCs to enable inclusive job creation (the Singapore Government has a ComCare Fund to provide seed funding for SEs). Corporate foundations can work with non profits to create community value, like the Wipro Foundation in India that is building a private university in Bangalore to create an institution based on teacher education and developmental studies to bolster the unprofessional civic sector.
Coca Cola has launched the ‘Live Positively’ campaign in Vietnam to create value sustainably for its stakeholders and itself through community engagement. The private sector has a major role to play in disaster relief as part of a new paradigm of creating shared value and extended CSR. The first organisation, to respond after the Aceh earthquake and tsunami was the logistics firm TNT. The private sector has their supply chains in place which can be leveraged for disaster response as Coca Cola has access to the smallest hamlets in sub Saharan Africa which the government even does not possess.
The Grameen Movement in Bangladesh has started social businesses with Danone to sell nutrition food to the ‘Bottom of the Pyramid’ (BOP) market at an affordable rate, and has also transformed communities with the Grameen Phone. Grameen also has a tie up with Veolia Environmental Services to sell clean drinking water to a suburb of Dhaka in an arsenic ridden area. Companies should use CSR as an instrument to create social capital in the communities that they operate, moving beyond the odd campaign here and there.
This next level of CSR and active Business-Community engagement and creation of shared value is vital to benefiting the local communities, and providing services that are nonexistent in many developing nations.
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