FUSING COMPANIES’ CSR COMPLIANCE WITH FULFILLING SUSTAINABLE DEVELOPMENT GOALS

This article has been authored by Nency Shah, a 3rd year law student at Institute of Law Nirma University, Ahmedabad.

Introduction

Companies play a vital role in an economic system of a nation as it generates enormous amounts of profits that create value which in turn can be re-invested to create further economic development and positively impact the society at large. Since businesses have a considerable impact on society, it is all the more important to consider this impact meaningful on a nation’s domestic populace. Thus, it should ideally be an ethical obligation for corporations to operate in a way that is respectful to the general population and their surrounding environment. This can be said to be the backbone of the emergence of the Corporate Social Responsibility (CSR) policy to give back and add positive social value to the community. However, since the 20th century, it has been a long-standing question on CSR activities. It has been relatively misunderstood to be a voluntary kind of social arrangement based on companies’ discretion in the name of charity. In this fast-paced economic globalization where, along with changing scenario of businesses, global issues like poverty, climate change, lack of quality education, gender inequality, etc., have risen at a fast pace. Thus, corporations, in present times, cannot practice the activities of CSR merely for the purpose of philanthropy to ameliorate its image in the general public as, when the future of the world is at stake, with the planet facing social, economic and environmental challenges, companies must not base their future without preserving the environment that they wish to survive in. This thought process gave rise to the concept of integrating CSR with Sustainable Development Goals (SDGs). Though the evolution of SDGs has a much longer history, some shreds of evidence support the expansion of CSR with the sustainable development movement. Thus, CSR now includes sustainability and responsibility as its complementary elements. The true character of integration of CSR activities with SDGs can only be depicted when a company adds to the value of humanity and its surroundings to be more responsible and sustainable towards the community that has helped them survive and grow. Thus, in the words of Franck Riboud, the Former Chairman, Danone, Europe;

“An enterprise exists and lasts only because it creates value for society as a whole … The ‘raison d’être’ of the enterprise lies in its social usefulness. It is to serve society and mankind, in the everyday lives of men and women, through the products, services, employment or even the dividends it provides”.

Interface Between Corporate Social Responsibility (CSR) And Sustainable Development Goals (SDGs)

Countries around the globe have been more cautious about combating global issues, given the number of challenges that humanity now faces. The United Nations (UN) General Assembly adopted 17 SDGs in September 2015, which targeted improving some of the sections like poverty, hunger, health, education, water, energy, sanitization, etc. Individuals, private and public sectors, through collective efforts, must face these issues unitedly through good governance as it concerns almost every country globally. SDGs have ample opportunities for the corporate sector to participate in achieving the common aim of sustainable development through aligning the interests of different stakeholders with each of the 17 goals and hence attaining a cumulative synchronized growth.

Scenario in India

India as a country has signed the declaration for sustainable development along with other countries; however, additionally, in the same period, the CSR policy was introduced in India under section 135 of the Companies Act, 2013, and this proved to be interconnected to the SDGs in ways for example:

One of the Schedule VII activities of the Companies Act, 2013 like Eradicating hunger, poverty, and malnutrition, promoting preventive health care and sanitation, including contribution to the Swach Bharat Kosh set up by the central government for the promotion of sanitation and making available safe driving water; was mapped to the SDG 1, 2, 3 and 6.

In order for India to be successful in achieving SDGs, the government, private sector, and civil society must form a collaborative network within themselves. It is also of pertinence that projects of that kind be initiated that are expandable, replicable, and sustainable. The Indian Government seems to reasonably use SDGs as its roadmap to formulate national policies; for instance, the Government of India has tasked NITI Aayog to design and develop a framework defining policies, procedures and map to implement the SDGs by government regulatory mechanics. Now it is the responsibility of corporations to prove themselves as a facilitator in the implementation of SDGs.

Some of the Indian companies that have mapped their existing projects with SDGs are:

· Tata Steel commenced an initiative that was targeted to improve sexual and reproductive health and well-being in adolescents in Saraikela Kharsawan district of Jharkhand. Youth Resource Centers (YRCs) were established, and as a part of the impact, 40,000 adolescents were reached out.

· In order to combat the issue of waste management, an initiative was started by SBI that aimed at Setting up community-run solid waste management systems in the villages of Rajasthan.

· In order to resolve the issue of scarce water availability, Ambuja Cement started an initiative to construct water harvesting structures in Kodinar, Gir Somnath district, Gujarat. This initiative resolved the principal problem and also helped reduce the water salinity, and helped the community to carry out agriculture in those places.

· In order to fulfill the requirement of quality education, Jubilant LifeSciences, a pharmaceutical company, through its “Project Muskaan” focuses on enhancing the quality of education by introducing extra-curricular activities in the project schools.

· In order to build sustainable solutions for managing waste at source and building zero waste communities, Coco-Cola India has started the initiative “Alag Karo – Har Din Teen Bin” in partnership with Saahas, Tetra Pak, and GIZ.

· GAIL, through its ‘Hawa Badlo Campaign,’ aimed to create awareness regarding air pollution and fight the same. This project got significant social media support, and people pledged to switch to natural gas options to reduce air pollution caused by fuel.

· There are many more such companies/corporations that have linked their existing projects to SDGs to be a part of sustainable growth. Still, companies do not make an active effort to develop new projects to align them with SDGs, but they try and incorporate SDGs into their existing matrix. It diminishes the value of making the best use of SDGs in the newer projects.

Suggestions

Other alternate ways are required to prevent the diminishing value of making the best use of SDGs by various companies through their ongoing projects. The approaches suggested here must provide ways in which companies remain actively invested towards contributing to the SDGs and not merely perform the activities as a part of their obligation towards CSR and then integrate the same with SDGs. The author suggests some approaches in the following part.

· Companies must act as catalysts to promote SDGs, and for that they must alleviate the negative impact and align positive impact to SDGs. So, for instance, if India is ranked 6th in the COP 23 and has climate risk at its peak, companies must strategize to alleviate this risk and work towards making a new business model that helps positively in such a situation. This will, in turn, help them and society at large and hence will support one of the SDGs.

· A different participatory approach must be designed wherein there is an engagement of different stakeholders to understand which project needs urgent corporate intervention or needs urgent requirement of action which is aligned with SDG. A thinking approach must be designed as well to work on innovative niche ideas which keep up the stakeholders engaged with their new business models impacting the SDGs positively.

· Collaborative approach and partnership between various stakeholders like integration of government policies with the private sector, including businesses and civil societies, will prove productive and accelerate India’s vision to achieve SDGs.

· These suggestions will be pragmatic only if there are incentives in place for the corporations wherein if companies delve into bringing solutions to address the issues of SDGs and become a part of acceleration by bringing in fresh perspectives to break down the long route of 2030 into several small achievable milestones, then there must be instilled something for them to be motivated enough to work and think beyond their profits and feel morally obligated to do so. Hence, the government must formulate such policies where corporations are incentivized sufficiently to bring in such niche observations on the plate.