Corporate sustainability has rapidly developed over the years. It is now a critical component of business strategy and management because of the opportunities it has created.- M.Rajendran
The role of a business in society has been a subject of debate for centuries and shall continue to be. Since the growth and development were based on unsustainable means, nature and the environment were badly impacted. It has become not only the reason for environmental degradation but also a cause of social imbalance.
Hence, Corporates now acknowledge their obligations to society and nature and make efforts to pursue sustainable development. The realisation that there is a need for higher social equity and justice, which is an outcome of such growth, must be corrected.
To reflect the ongoing transformation in the domain of CSR and the SDGs, the Asian Development Bank Institute uses India as a case study to explore the interlinkages between CSR and the SDGs. The content stems from an extensive 1-year research effort conducted by a team of economists from India and the Asian Development Bank Institute in Tokyo, Japan. The authors of this book, Shikha Manchanda, Dil B.Rahut, and Tetsushi Sonobe, analysed the interlinkage between CSR and SDG using various case studies in India.
The authors point out that some scholars like Friedman believe that the sole aim of profit maximization should drive a firm. Others believe that a business affects all entities of society, the economy, and politics, and hence should be mindful of those aspects and behave responsibly in the interest of all its stakeholders, including the employees, managers, shareholders, customers, clients, local community, and environment.
The preface of the book describes CSR dynamics. It is pertinent that the readers get an idea of the authors’ analysis through this preface; hence, a few paragraphs are reproduced from the book for the larger benefit and dissemination of findings by the authors and their research analysis on this critical issue.
It points out that corporate giving for social causes is not new and has existed for centuries. Many corporations and philanthropists have impacted society through their efforts, as they believed they had a special obligation to society and benefited from it. However, philanthropy is different from corporate social responsibility (CSR).
The term CSR, popularised by Archie Carroll, highlights corporations’ economic, legal, ethical, and social responsibilities toward society. CSR is no longer considered peripheral to activities, such as philanthropy, but is now recognized as integral to a company’s strategic decision-making and daily operations.
CSR is no longer an optional addon; it has become an inherent part of business practices. The ability to adeptly and efficiently address the needs and expectations of stakeholders (who now possess powerful means to express their demands) is crucial for success in the current global business landscape and essential for the survival of businesses.
The history of CSR demonstrates that until the 1990s, CSR was synonymous with philanthropy. According to a review of case studies and activities that Indian corporations performed, the focus of CSR is shifting from mere philanthropy to empowerment and partnerships, as mentioned in a study by KPMG India 2008.
The period from 1991 to 2012 is synonymous with transforming traditional CSR into a core business strategy. The Indian economy transitioned from philanthropy to a more liberal and ongoing stakeholder participation model. Still, interestingly, growth in CSR spending did not cause a substantial reduction in philanthropic subsidies and donations.
India made history on 1 April 2014, becoming the first country to mandate CSR legally. It led the world in this revolution of spending on and reporting CSR activities in line with Section 135 of the Companies Act, 2013 (Ministry of Corporate Affairs 2013).
The book points out that with well-calibrated social and economic incentives, the private sector has willingly joined hands with the government to follow an all-inclusive growth strategy. Thus, it can be safely concluded that CSR as a practice has emerged from the margins of corporations to assume a mainstream role.
The planet’s future is at risk, with significant economic, social, and environmental challenges. Corporations cannot envision a future without striving to protect the environment in which they thrive. This has given a surge to the theory of linking corporate social responsibility (CSR) with sustainable development and with sustainability and responsibility as two pillars of CSR. India is committed to achieving the 2030 SDGs.
The SDGs present vast opportunities for involvement from the corporate sector, bringing together private players from various industries to work toward the shared goal of sustainable development by harnessing the power of stakeholder collaboration for mutually beneficial growth.
The Cover story and the second cover of this issue highlight this linkage precisely. So, for example, when a company sets its CSR focus on providing skill development training to women and young people to improve their livelihoods, it contributes to several SDGs, such as eliminating poverty, ensuring food security, promoting education, promoting gender equality, and supporting employment and economic growth.
