CSR funds favour some areas while overlooking objectives like women’s empowerment; even when they turn the focus, actions may overlook ground realities
This paper is part of a series ‘This is not CSR’ to discuss the purview of corporate social responsibility in India. DTE brings you the series along with ‘Partners in Change’ and 'Corporate Responsibility Watch'.
The concept of Corporate Social Responsibility (CSR) has been present in society since centuries. Although at that time it was more of a vague concept. The fundamental ideas of CSR were virile as a rudimentary notion of corporations as social enterprises in entities like asylums, homes for the poor and old, hospitals and orphanages.
In the 18th and 19th centuries, it was reflected in Christian religious philosophy, but as an idealised concept. In the late 1800s and 1900s, there was a rise of welfare schemes for the labour force and a growing sensitivity, awareness among the business tycoons.
This growth was only enhanced by the process of urbanisation and industrialisation. By this time, it had been established that corporations had a social responsibility towards the society.
However, it was only in the 1930s and 1940s that CSR started getting defined as a modern construct, appearing in literary works — Bowen in 1953 being the first person to define CSR as “the obligations of business to pursue those policies, to make those decisions or to follow those lines of action which are desirable in terms of the objectives and values of our society”.
In the 1980s, owing to the intervention of international organisations such as the United Nations, there had been much focus on sustainable development. Sustainability is a central theme of CSR and hence, riding the hype generated by the need for sustainable development, CSR came to a globally accepted concept. Since, then CSR has evolved to become the pragmatic management concept it is present day.
In regards to responsibility of the corporations towards society, there have been two dominant approaches — the capitalist approach and the utilitarian approach.
Friedman was one of the significant figures who upheld capitalism. He claims that that the sole responsibility of corporations is to gain more profits, their accountability privy only to shareholders and not to society as a whole. He argued that economic profit and social responsibility do not go hand in hand.
Hence, business bodies should be separated from the moral community, exempted from the responsibilities that come with it. This is often termed as the stakeholder theory.
The other approach views corporate bodies as citizen’s part of the moral community and is based on the assumption that business is responsible for the society within which it operates. However, the present-day model of CSR professes business ethics lying in the balance of economic, environmental and social imperatives (the Triple-Bottomline Approach), while at the same time addressing the expectations of shareholders and stakeholders.
James Brusseau defined CSR as a specific theory to be composed of four company obligations:
Based on Brusseau’s definitions, Caroll came up with the ‘Caroll’s pyramid of CSR’. Through Caroll’s Point of View, CSR obligations should be taken in order of bottom to top, from economic responsibility to legal to ethical to philanthropic.
If a corporation achieves the first responsibility efficiently, then it can move on to the next one, ie the first and foremost priority of the entity would be economic. CSR doesn’t require the entity to forgo its own interests but were it in a position to consider ethics, the ‘greater good’ of society, it should do so.
Like human beings need to attend to their physical needs such as food, water before attending to their more complex needs (Maslow’s hierarchy of needs), a corporation needs to attend to its economic affairs first. It’s a base need and to disallow them from doing so would be akin to destroying the entity.
As it was the case with western countries, in India the beginning of CSR was marked by philanthropy and ideology. In poverty-struck India, whereby there was a dire need for development so as to uplift the people, this phenomenon only strengthened. Mahatma Gandhi claimed Indian companies to be “temples of modern India.
It is evident that the Indian State has had made its own attempts to define the meaning, scope of CSR.” As a matter of fact, it was the first country to legally mandate CSR in 2014.
The emerging prominence of CSR has had its own consequences — a notable consequence being the changing role of the state. Within the Preamble of the Constitution of India, the word ‘socialist’ has been incorporated, thus ensuring that it was under the supervision and guidance of the state that development would occur.
This was the case in era of 1960-1980 whereby stringent laws were imposed on private corporations, hence forcing it to take a backseat and public undertakings were the driving force behind the economy.
However, a liberal approach emphasises the importance of the private sector. This changed outlook has provided many opportunities to corporations for exploitation. CSR activities have become so embedded in a corporate’s life that they no longer consider it as an indirect expense and treat it as a route for improving their goodwill, reputation, defending attacks and increasing business competitiveness. Business corporations have come to view CSR as another tool to expand their horizons; social justice and human rights as another ground to compete on.
As a definition, CSR is not an exhaustive term and this paves way for a ‘logic of convenience’, each views the concept from his own vantage point, consequently acts accordingly.
Section 135 of the new Companies’ Act and Schedule VII of the Act provide the legal provisions with regards to the framework of the CSR. It is based on a give-and-take policy: Since the companies operate within and gain resources — raw materials, human resources — from the society, they should do their part and give back to it.
This policy is focused only on medium, large-sized companies. Only those companies that fulfil a certain quota — their net worth being Rs 5 crore or more are liable. According to the the mandate, companies need to spend at least 2 per cent of average net profit for the three immediate preceding financial years on CSR activities in India.
In a bid to dissuade the vagueness associated with the concept, Schedule VII of the Companies Act introduced many activities which may be considered as CSR obligations: eradicating hunger, poverty and malnutrition; promoting education, gender equality; empowering women; ensuring environmental sustainability; protection of national heritage, art and culture, measures for the benefit of armed forces veterans; war widows and their dependents; promoting sports; contributing to the Prime Minister’s National Relief Fund or any other fund set up by the governments for socio-economic development and relief, rural development projects; slum area development; contributing to technologically advance the learning in academic institutions.
When the 2014 law was brought in, it gave way to confusion and chaos. Hence, the business industry was severely underprepared — this was something that was acknowledged by the authorities as well, as they announced that for the time being the focus would be to familiarise the companies with the concept. Hence, there would be some leniency during the evaluation, they were going to get down to the gritty details later.
According to the report of the High-level Committee on Social Responsibilities (2018) by the Union Ministry of Corporate Affairs, data accumulated for four years (2014-2018) shows that when companies are questioned for reasons for underspending the prescribed amount on CSR, they cite the following reasons:
The same reports have shown that business bodies tend to stick to some CSR funds such as the PM’s National Relief Fund, Swachh Bharat Kosh, Clean Ganga Fund and any other fund set up by the Centre for socio-economic development. They ignore areas such as heritage, art and culture, slum area development, gender equality and women empowerment.
This might be partially due to ignorance — an inability to understand just where, how to allocate CSR funds and partially due to the tycoons’ viewing CSR as an additional tax to lynch more money out of them — a tedious task which must be begrudgingly done for the sake of it.
Another issue is that the companies, while donating funds, tend to prefer their local areas- this paves way for an inequity for distribution of funds. There is no guarantee that deprived areas that are actually going to receive these funds in fact it is a tendency that only gives more power to the powerful, assisting already flourishing areas.
It is imperative to understand that in the present day world impacted by the pandemic, new norms, new issues have been brought up — globally, the people are establishing a new reality.
Needless to say, the novel coronavirus has introduced a new dimension to CSR as well. Ever since the pandemic has broken out, the CSR funds are all being given for the relief of COVID-19. other causes — like health, education, women empowerment, employment, nutrition, forest rights and climate change among a host of others — have been thrown onto the back-burner.
One of the fallouts of the pandemic has been the growing rates of crime against women. The National Commission for Women reported a 94 per cent rise in complaint cases. In June alone, 2,043 complaints of crimes committed against women were reported — the highest in the past eight months. Yet there isn't much being done to address this issue as COVID-19 relief has taken centre stage.
Take the initiative by Hindustan Zinc Ltd, where it distributed ‘Safal Sakhi tablet’ at villages in Udaipur, Rajsamand, Chittorgarh, Bhilwara and Ajmer districts of Rajasthan. The company claimed the initiative was for women’s empowerment, as part of its Digital India campaign, it was not the need of the hour.
The women were equipped with digital tools. But their ways of livelihood have been abused, they have tormented in the confines of their homes. Initiatives focused on ‘women’s empowerment’ should think of ways to offer relief, to intervene for domestically abused women. Giving away tablets would have no significance for women who cannot afford safe housing.
There any many different facets of women’s empowerment: Social empowerment, educational empowerment, economic and occupational empowerment and legal empowerment.
To analyse whether CSR initiatives are effective in women empowerment, we must consider promotion of gender equality — trying to build a society where women are privy to the same opportunities, outcomes, rights and obligations as men. This is a far cry from where the society is as of now.
There is a need for gender inclusivity to make sure that women are in a better standing to access their rights and help out other women to access theirs. One way in which CSR could contribute to women empowerment is to ensure women inclusive participation in the workplace, placing them in positions of power, reducing the gender wage gap.
Educational Women Empowerment, Economic and Occupational Women empowerment; It is empowering women with knowledge, skills and confidence to pursue their careers, earn their own livelihoods and reduce their dependence on their male counterparts. However, the prior issue to be addressed is women’s safety. The other aspects are important as well but secondary. How is a woman to realise her full potential when she is not safe at her workplace or even in the confines of her own home?
A good initiative was the launch of an application by filmmaker Madhureeta Anand, which introduced the concept of ‘safety ratings’ ie a person at an establishment can rate the place as ‘safe’ or ‘unsafe. It is a small step in terms of innovation but it will act as a warning bell for women. It will also make these establishments more conscious and aware, after all, ensuring the safety of their customers is also a part of their duty.
So far when concerning the well-being of women, the focus has been on economical and educational empowerment. CSR initiatives by business houses like the Tatas, Hindustan Uniliever, Vedanta, Hindalco and Jindals have helped women through economic means, providing them with income generating activities.
These initiatives are laudable but flawed. For one, their contribution is solely economic. Second, their initiatives help out only a small section of society, all their initiates are for rural women, urban women are not accounted for. Third, the only encourage micro-entrepreneurial ventures for craftswomen, artisans, etc. What if a woman wants an alternative occupation? There is no attempt to integrate them in the existing economy whatsoever.
Economic empowerment does not necessarily translate into empowerment. Resource theorists argue that changes to the power dynamics between partners can influence the level of domestic violence (Goode, 1971). Specifically, physical abuse may be used as a tool to compensate for lack or lessening of power in the relationship.
For instance, if an Indian wife were to simultaneously begin paid work (ie, gain an income resource) and do less household chores (ie, challenge the family power equation), this could be perceived as a threat to the husband’s power in the marriage and lead to physical violence.
A gendered resource theory, such as that developed by Anderson (1997), situated within an ecological framework of domestic violence, would seek to discover how shifting gender norms affect the spousal “resources” differently across India significantly more violence. So long as their basic right to a safe environment remains inaccessible, growth in other aspects remains nought.
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