CSR is about responsibility: Richard Welford
Corporate social responsibility goes far beyond what is envisaged in India’s current CSR rules, says Welford
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Richard Welford, co-founder and chairman of CSR Asia, an independent think tank and consultancy firm that is a strategic partner of IRBF Index 2015, has been working on environmental management and social responsibility for over two decades. A pioneer of social auditing in the UK, Welford is of the opinion that corporate social responsibility (CSR) goes far beyond what is envisaged in India’s current CSR rules. In an email interview, Welford shared his views on the value of conducting business in a responsible manner. Edited excerpts:
What is corporate social responsibility (CSR) according to you?
It is about how you do business and not how you give away or utilize the profits you make from that business. In India, CSR is about how you give away your profits and not how you make those profits. I feel the approach of the companies in India has been narrowed down to just doing philanthropy rather than taking affirmative action towards business processes—barring a few top companies—with the new legislation.
Where do you place Indian companies with regards to your definition of CSR?
You have a whole range of companies—the most responsible ones known globally for their best practices like Tech Mahindra Ltd, Tata Consultancy Services Ltd, Wipro Ltd and Infosys Ltd, but you also have a large number of companies who are not looking at sustainability or CSR in a holistic manner. Their approach is limited to “CSR is a nice thing to do or the right thing to do”. They don’t recognize the value in doing business responsibly... their approach is limited to charity.
What are the main features of responsible business?
Transparency and accountability are the basis of CSR. Largely these have to be voluntary. The legislation around these aspects is limited to guidance like the National Voluntary Guidelines, which the Securities and Exchange Board of India has asked the top 100 firms to adopt a few years back. However, increasingly we see that these guidelines are now taking on the nature of being mandatory. For instance, the Hong Kong and Singapore exchange boards have mandated all companies listed with them must adhere to certain principles of sustainability.
What is the driving force behind CSR or sustainability? Is it the business case for it or the need for greater good?
A little of both. By now, there is enough researched evidence that CSR is good for business. Responsible business results in positive impact on the bottom line of the company. And here I must emphasize that not CSR as philanthropy but CSR as sustainable responsible practices by companies.
For instance, across the globe, there is no one company doing as much as Coca-Cola is on water conservation. It is a simple correlation—no water means no Coca-Cola. The risk of resources is in part driving corporate action on issues like resource scarcity and climate change.
What are the significant trend shifts of this sector over the past five years?
There has been growth in inclusive business. Businesses understand that if you want to elevate poverty, you need to involve rural poor in the market space. In this regard, companies are looking to address the value chain and work towards inclusive policies.
How can CSR or sustainability be made attractive for businesses?
Businesses need to realize that sustainability creates competitiveness and adds value to the brand. It helps differentiate products and services. The bottom line is that customers are demanding it and companies that aren’t sustainable will be left behind.
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