Introduction
With AI taking centre stage in shaping Corporation cost structures and business models across industries has resulted in companies addressing issues which have a direct impact on their profit margins and the way of doing business. This further behoves on companies to improve their delivery mechanisms through sustained innovative solutions by bringing about a resilient and growth oriented culture, which has a lot to do with quick decision making. This has resulted in fuelling innovation, resilience and growth in all functional areas to include CSR and Sustainability as that will give corporations the necessary competitive advantage. It is therefore axiomatic to mention that corporate leaders have to understand what gives them that advantage and report their outcomes as per reporting mandated Government directions. It is equally important to realistically understand the adage – ‘What is not reported is not done’ with an added diktat that what is reported has to be measured in terms of Impact as that gives a direction on future investments under the realm of ROI.
Impact Measurement and CSR Return on Investment (ROI)
Impact assessment on CSR projects for corporations in India is mandated in Section 135 of the Companies Act 2013 and subsequent amendments issued in 2021. When investments on projects of more than 10 Cr and project evaluation of more than one Cr or more is undertaken in a FY, then Impact analysis has to be carried out by a third party. The focus is also shifting from compliance to ROI, using frameworks like Social Return on Investment (SROI), balanced score cards and so on. While SROI is a tool that monetizes social, economic and environmental outcomes, which help in evaluation of social values created in relation to the investment carried out; the ‘Balanced score card’, measures impact on financial efficiency, beneficiary outcomes, internal process efficiency and employee learning growth.
My reflections on measuring impact go back many years and much before amendment to the CSR rules came into being, which made it mandatory for investment of proscribed limits on CSR to be reported. As the Group Corporate Head CSR at Jindal Stainless Limited Group, we initiated a project in partnership with “Super Human Race”, which had brought the concept of monitoring and evaluation on an AI platform. Daily activities in the field were monitored on the dashboard and immediate decisions and project course corrections carried out in real time, which further helped in improving our CSR project implementation process.
Challenges and methods adopted by Companies to track CSR Outcomes
With the Government on-going social project schemes being carried out alongside corporation social projects in a common geographical area, the companies find it difficult to distinguish the impact made by their projects vis-à-vis Government projects unless the projects are being run on a PPP model. There are challenges around timelines on projects relating to infrastructure development, like schools, hospitals etc. and assessing immediate ROI besides of course corporations finding challenges around reporting formats and standards. However, all such issues will be resolved and the beneficiaries will benefit, which should be the bottom line of all endeavors. It is also important to note that CSR is now treated as a strategic business imperative with data-driven insights and aligning with the ESG framework.
In addition, companies are tracking their key metrics and outcomes by analysing the number of beneficiaries employed, improvement in literacy rates and reduction in carbon emissions and economic conversion of water conserved, health outcomes and so on. Social media analysis also gives some indicators on reputation and brand loyalty, which have a direct bearing on retention and recruitment processes.
The way forward 
Seeing the emerging trends on timely and efficiency in reporting, it is obvious that there will be a greater reliance on AI powered monitoring mechanisms to analyse patterns and generate real-time impact dashboards. This will further result in shifting goal posts from the current practice of analysing money spent on CSR projects to analysing project outcomes. The SEBI guidelines on introduction of ‘Social Stock Exchange’ has also resulted in the new trend of ‘Social Audit standards’ mandating qualified listed social auditors for listed companies. In addition to ensuring digital compliance, Form CSR – 2 and Business Responsibility and Sustainability Reporting (BRSR) are becoming more important.
Conclusion
CSR having moved beyond the scope of mere Corporate philanthropy, the just feel good cheque book donation has been replaced with Corporate accountability and impact assessments, which come under the realm of ESG governance. While the Government of India has made it mandatory for corporations to report on investments incurred on CSR projects with added strictures on third party assessments and social audits, yet it is seen that there are still a number of corporations, especially in the SME sector which are yet to carry out their obligations by investing part of their profits.
The hope that total CSR investments will increase over the coming years and society will transform is what will make a corporate sustainable and socially acceptable, for branding through various media tools in the current context are the change makers and influencers. To accomplish the desired corporate goals and objectives, there needs to be a reasonable alignment in the cause of the Government and the corporate. Why is there a need for corporates to engage in social service, when their role remains on making profits, which is good and righteous. However it is in investing such profits into communities to bring about the desired social change that a corporate wants to see that makes the investment a worthwhile cause that will contribute toward the overall growth and development metrics.
