The underlying business case for CSR

In the Indian scenario, CSR continues to present a massive opportunity for Indian organisations... by firmly integrating CSR into business strategy, Yes Bank′s sustainability chief tells India Inc.

The year 2016 has been a phenomenal year for Corporate Social Responsibility (CSR) as there continues to be an increase in the integrated adoption of the CSR by organisations, big and small, across the globe.

Even as CSR grows more complex by the day, things have been looking up as businesses are taking on greater responsibility towards addressing social and environmental issues, and in many ways, this has been a period of redefinitions and disruptions. We are also witnessing a change in how consumers, regulators, and all other stakeholders, are perceiving businesses that are doing good or moving towards doing good, together with the society. Overall, businesses are shifting towards a more complex CSR environment, where even the most committed sustainable and responsible organisations would be tested against their resolve, and now would be the time for organizations to assess how deep the responsible business DNA runs in their strategies and processes.

Companies that do not seem to be convinced of the answer to that question would need to look at redefining and setting standards for themselves, as companies with weak commitments towards the society and environment will likely be impacted where it hurts the most - their bottom lines. In the Indian scenario, CSR continues to present a massive opportunity for Indian organisations to do good to society while creating a holistic brand, and incorporating wider socio-economic and environmental aspects into their strategy and operations. This can be achieved by firmly integrating CSR into business strategy.

Yes Bank, for example, is playing the role of 'CSR and sustainability catalyst' and has adopted the Responsible Banking ethos since its inception, focusing on long term business success, economic and social development, a healthy environment and stable society. Operating at individual and collective levels on key issues such as livelihood and water security, and environmental sustainability, the bank has been able to achieve exponential scale on its key CSR imperatives.

Often, while businesses may be convinced of the underlying business case for CSR, putting the thought into action can be challenging, given the broad CSR landscape in India. Here, some forward looking and exemplary organisations are showing the way by creating shared value and fostering partnerships that benefit both their business and the society they operate in. Co-creating value requires businesses to look beyond traditional CSR models and concentrate their efforts in a direction that, plays to their inherent organisational ethos, strengths and addresses the most pressing developmental priorities of the community. This would entail businesses and society putting more effort into understanding the issues from both perspectives and identifying the areas of opportunity where the highest potential for developmental benefits exists. Addressing value creation would require 'creative disruptions' in terms of how CSR is viewed and embedding it with the core business strategy. Here, it becomes important to have both a top down and bottoms approach where CSR can achieve tangible business results by ways of innovative approaches. Further, it becomes imperative for corporations to share successful best practices to facilitate contemporaries visualize and adopt models that suit their industry. As a process, the selection of the right partner is integral to achieving the desired impact. In addition, it is equally important to build capacity of partners, conduct a thorough needs assessment of the target beneficiaries, and establish the systems and frameworks for measuring the outcomes of the engagement.

Yes Bank's CSR intervention in the MSME sector in India may be an apt example to highlight here. India's MSME sector has a critical role in its economy, contributing to 45 per cent of industrial output, 40 per cent of its exports, and being among its largest job providers. Thus, the sector is also a critical focus area for the Banking sector. In a first for corporate sector, Yes Bank launched its CSR program “Say YES to Sustainable MSMEs in India” focusing on environmental sustainability and Occupational Health and Safety within the sector, as a wide-reaching intervention to help the sector become globally competitive, and in alignment with India's Make In India initiative.

With an established partner network and effective implementation system in place, the initiative has impacted over 1,000 MSMEs and over 14,000 workers since its launch in 2014, and while doing so, strengthened the bank's presence in the sector and improved its goodwill amongst the beneficiaries, many of whom engage with the Bank for their banking needs, making it a win-win-win for all. With a very holistic framework and deep groundwork, a business case for CSR can truly emerge which then needs to be looked at from a Social Return On Investment methodology, assessing its tangibility, and measuring the outputs, outcomes and impact created through an organisation's CSR investments. Such a clear measurement of benefits to both business and society would not only make it easier to communicate the business case, but also inspire business contemporaries, build trust, and strengthen reputation.

Namita Vikas is group president and country head, responsible banking & chief sustainability officer, Yes Bank Ltd. Her work involves overall CSR and sustainability management, CSR governance and compliance, research, triple bottom-line accounting, building strategies towards responsible finance/ investing and strategic philanthropy. She also serves as a board member of Yes Foundation.