Mumbai: Axis Bank Ltd has adopted an impact investing approach to its spending on corporate social responsibility (CSR).

The bank wanted to see how it could make a difference to people’s lives and measure the difference, says Shikha Sharma, managing director and chief executive of Axis Bank, which is India’s third largest private sector bank.

“We thought impact assessment was important because we have a limited amount of money and we wanted a lasting impact," Sharma said in an interview. Edited excerpts:

Axis Bank has a stated, defined impact group for its CSR activities. It wants to cover one million people by 2017, with 60% of those targeted being women. How are you working towards this aim?

We still have 18 months. Fundamentally, we wanted to look at CSR as impact investing rather than just giving money.

We wanted to see how we can make a difference and wanted to measure the difference.

Frankly when we set out, the then trustee of the Axis Foundation, Babu Joseph, set a goal of impacting a million lives in a five-year period, mostly women. It always helps to have a specific goal because it galvanises you.

The theme of livelihoods was chosen because the big macro opportunity for India is coming from the fact that we have an aspiring, growing population that will trigger economic growth. But if we have to take advantage of that then we have to have more people participating in the economic activity and becoming economically independent.

So we thought being a bank with a national footprint, we should look at a goal which is linked to making people economically independent.

But why did you choose sustainable livelihood in agriculture?

We asked ourselves what are the different routes to making that happen and since Babu (Joseph) was quite aware of the social sector, he looked at different approaches and different NGOs who were working in the field and have helped people come out of poverty.

Also, since some work was in rural areas, solutions for these areas do involve animal husbandry, agriculture and forest-related products and hence livelihood options had to centre around these. We do vocational training as well though.

What was the role of your board in deciding what kind of CSR activities the bank should undertake?

We decided that we will work in the fields that impact livelihoods in poorer sections and also affect women.

Once this was fixed, we had to decide on what are the interventions that work for us.

We evaluated all the options against this goal. We did not start with preconceived notions of what will work.

In CSR, does impact assessment help to eventually scale?

We thought impact assessment was important because we have a limited amount of money and we wanted a lasting impact.

If you want that, you have to measure where you started and where you are. Only then can you throw more behind programmes that have an impact and reduce others.

After the new rules for CSR took effect, was there any realignment in CSR goals?

Not really. We are doing pretty much what we were doing through the Axis Foundation.

Can CSR be a tool for bringing lasting social change?

Companies can have a lasting impact if they take the CSR effort seriously and do it scientifically.

Is it important to engage employees in social change programmes that the foundation works on?

Long-lasting organisations must work for a purpose.

If you are working to make a difference, it is a great sense of pride for the employees and in that sense it is good for them to be involved and see what difference Axis Bank makes to communities across India.