CSR and Public Sector Enterprises: Tips for Social Sector Organizations

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:

Geographic focus

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.

Thematic focuses

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).

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. (Source: Unpublished report, DuTremble, IICA, 2020)

 

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.

Dominique is serving as an American India Foundation (AIF) Clinton Fellow with the Indian Institute of Corporate Affairs in Gurugram, Haryana. For her Fellowship project, she is studying the national indicators for aspirational districts, identifying possible investment areas for corporate social responsibility, and creating a framework for corporate engagement. Dominique graduated with a Bachelor’s in political science in 2013 and a Master’s in community development and planning in 2015. With focuses in comparative politics and economic development, she went on to serve six years as a regional community development planner. As a principal planner with the Central Massachusetts Regional Planning Commission, she built and managed a program to shepherd communities through state initiatives, coordinated comprehensive planning efforts, and led a variety of community engagement and economic development initiatives. In this role, she also served as a municipal circuit rider, staffing town planning and economic development offices. Prior to her career in regional planning, Dominique worked in the private sector and completed government internships at the local, federal, and quasi-governmental levels. Her mission is to build pathways out of poverty using economic growth as a vehicle for social and economic opportunity. Through the AIF Clinton Fellowship, Dominique will be working on corporate social responsibility projects. She is excited to develop a broad knowledge of India’s development ecosystem, gain new tools and perspectives in community development, and contribute to initiatives serving under-resourced areas and populations.

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