When someone says, “massive Indian enterprise,” which businesses come to mind? Tata Motors? Tata Steel? Reliance Industries? If so, well done- these corporation are among India’s top revenue generating companies; however, they are joined by public sector enterprises- four of 10 Forbes slots go these behemoths of central government. Given the massive scope of such entities, they have the resources to play a major role in development, especially in terms of Corporate Social Responsibility (CSR).
As of March 31, 2019, India had 348 Central Public Sector Enterprises (CPSEs). The CSR practices of such companies are not terribly well documented; however, some insights are available through their public reports. In spring 2020, I used such resources to conduct a peer review study of CSR practices by CPSEs. The study shed light on how India’s CPSEs approach CSR and has implications for social sector organizations seeking CSR funding.
CSR Practices of CPSEs
The study consisted of a literature review identifying best practices across a variety of CSR mechanisms and a content analysis of annual and non-financial reports for four CPSEs. The study sought to identify and describe patterns in the companies’ CSR practices. Key findings relevant to social sector organizations are as follows:
Collectively, the companies contributed the most to pan-India projects. State-wise, Odisha, Gujarat, and Assam received the most project funding. Generally, spending by the companies mirrored the location of their operations.
Each of the companies identity areas in their CSR policies. The companies’ thrust areas significantly overlap, with healthcare, drinking water, education, and skill development representing a stated focus for each organization. In terms of actual investments, the companies funded CSR projects in nine areas. Spending in childcare, education, and skills development, as well as healthcare, drinking water, and sanitation, significantly outpaced spending in other areas, representing a combined 77% of CSR expenditures. Smaller, but still significant, investments were made in Swachh Bharat Abhiyan, Community Development and environment, and other areas. According to these expenditures, these subject companies share a focus on education, healthcare, and livelihoods, as well as a common lack of investment in several thematic areas (namely, central govt. relief funds and technology incubation).
Projects by Sustainable Development Goal
Collectively, the subject companies targeted 10 SDG focus areas. The companies demonstrated a strong focus on Goal 3 (good health and wellbeing), Goal 2 (quality education), and Goal 8 (decent work and economic growth). Combined, these three SDGs represented 70% of the projects highlighted on the companies’ websites, indicative of not only actual focuses but possible branding strategy.
Targeting CPSEs for CSR funding
CPSEs fund an enormous number of CSR projects. As social sector organizations seek CSR funding as implementing agencies, CPSEs should not be overlooked. Based on the above findings, it appears as though pan-India projects, or projects in geographies proximate to the CPSEs major operations, are most likely to get funded. In terms of thematic areas, projects around childcare, education, development, healthcare, drinking water, and sanitation appear to be popular among CPSEs. In terms of SDGs, Goal 3 (good health and wellbeing), Goal 2 (quality education), and Goal 8 (decent work and economic growth) are popular in the sector.
In terms of framing proposals, many CPSEs utilize the Global Reporting Initiative framework for reporting on CSR activities. This framework looks at projects and spending in terms of Sustainable Development Goals. Companies like to promote their efforts in a similar way, as SDGs are commonly understood. Thus, proposals should highlight how projects align with SDGs; however, organizations may also look beyond this nomenclature for national policies and missions such Niti Aayog Aspirational Districts Program.
Most of the companies require implementing agencies to have at least three years of relevant experience. Newer organizations, or those lacking experience in the proposed project area, are more likely to get funded if they partner with another more experienced organization. Similarly, some CPSEs are moving away from one-off projects, instead preferencing longer term strategic projects (e.g., flagship programs and projects of 1-3 years). On the other hand, any proposal should clearly document a plan for exit and turnover to the community. Clear start and end points, with defined milestones, are important too. Finally, proposals should include procedures for documentation and a plan for review and monitoring.