New Delhi: Hurt by the global economic downturn in their operations, companies are increasingly seeking brand-building and other strategic benefits from their corporate social responsibility (CSR) initiatives, rather than straight philanthropy and charity work.
Philanthropy activities across the world are said to have taken a big hit and India is no exception, but CSR initiatives are expected to continue with some modifications here and there, experts believe.
“We feel they (CSR initiatives) would not be delayed, rather they will be modified and made more strategic as per the company core values,” global consultancy KPMG India Associate Director - Aid and Development Services - Parul Soni said.
However, philanthropy and charity-based CSR activities are likely to take a hit whereas sustainability-driven CSR initiatives would make more headway and emerge. Companies might try to use least resources for maximum branding and competitive advantage, Soni added.
Non-profit organisation SOS Children’s Villages of India, which gets contributions from corporate houses for well-being of children, also said there has been no impact of slowdown on the companies’ social benefit initiatives.
“Surprisingly, we have seen no decline in the interest of companies for CSR activities... What has been affected is the due diligence process in NGO selection,“ SOS Children’s Villages of India Dy National Director (PFR) Joygopal Podder said.
Corporates are now more cautious and selective and shortlist only NGOs with high credibility, transparency in accounting procedures and a long track record of high quality social work, Podder said.
From the corporate perspective, companies maintain that their socially-inclined activities has not be impacted by the credit crunch and they are continuing as before.
Global science products and services firm Dupont, which is a strong supporter of socially beneficial initiatives, has funded various programmes in India, which focus on improving village infrastructure, improving school and education standards for the under-privileged children.
Asked whether Dupont India would be initiating some new CSR activities this year in the midst of a global slowdown, a company spokesperson said, “our community projects are ongoing. We cannot comment on any new initiatives at this point of time.”
“I think the CSR initiatives by companies will remain constant and may be more strategically planned following the downturn in the global economy,“ Tata Capital managing director and CEO Praveen P Kadle said.
Moreover, Podder said that CSR budgets do not seem to have been hit by the current economic slowdown with trusts and foundations of MNC’s operating out of India, which are headquartered abroad, continuing to send contributions to SOS-India once they are convinced of the viability and quality impact of the project proposal that has been sent to them.
In a sharp contrast, a global survey of senior executives by advisory firm Booz & Co revealed that 40% of respondents expect ‘green´ and other corporate social responsibility initiatives to significantly slow due to the downturn.
“The pullback would be especially pronounced in transportation and energy industries, with, respectively, 51% and 47% of respondents in those industries saying CSR agendas will be delayed,” the survey pointed out.