Vice President – Human Capital
She joined UnitedHealth Group Information Services (UHGIS) in October 2011. Prior to joining UHGI... more>>
The India Philanthropy Report 2011 quotes author, Arpan Seth, I dont think there is a clear distinction between philanthropy and CSR. Its like a Venn diagram where theres overlap between the two." Individual giving has been in the news recently with Bill Gates and Warren Buffet calling upon the rich the world over to donate 50 percent of their wealth to charity. Corporate giving, however, is still an issue of wide debate and demur, fuelled largely by the ambiguity that surrounds it.
Today, industry sees corporate social responsibility through significantly different lenses. At the one end of the spectrum are companies who view scrupulous paying of taxes as doing their bit for society; treading the middle path are companies who view providing lunch and medical facilities for employees as their social responsibility yet again are those who believe in writing out a cheque and then there is the new emerging breed who have a view of problems ranging from literacy to environment and engage their employees to help address these hands-on, funding their efforts through the corporate kitty.
These ahead-of-the-pack corporate groups have not just assumed responsibility for a variety of social issues, but have realized that true sustainability lies in ensuring the well-being and progress of the communities in which they exist and work. More importantly, they have seen the value CSR generates in terms of the fulfillment that their employees perceive by contributing to society. This translates to higher levels of overall employee satisfaction - an indicator that progressive companies use to measure comprehensive business performance.
This nature and complexion of CSR is bound to change in times to come as social standards evolve. Though CSR has emerged as an inescapable priority for business leaders in every country, the prevailing approaches to CSR are still fragmented and too disconnected from business and strategy to allow companies to benefit society truly meaningfully. And this is where the future of CSR will lie as I see more and more companies beginning to analyze their prospects for social responsibility using the same frameworks that guide their core business choices. In doing this, they will make CSR much more than a cost, or a charitable deed-they will turn it into a competitive advantage.
Philanthropic initiatives are typically described in terms of money or volunteer hours spent but almost never in terms of impact or explicit performance targets. This is where we will need to invest thought and effort in future. If companies begin to look at the value chain - all the activities a company engages in while doing business - it can be used as a framework to identify the positive and negative social impact of those activities. This could range from atmospheric pollution levels to disposal of wastes and obsolete products to use of eco-friendly material in the manufacturing plants to personnel policies such as job training, layoffs and use of child labour to ethical research and responsible advertising. Companies that have walked this path have effectively integrated business with society and therefore shown measurable impact. DuPont, for example, has saved over $2 billion from reductions in energy use since 1990. Changes to the materials McDonalds uses to wrap its food have reduced its solid waste by 30%. These were smart business decisions apart from their environmental benefits. And this is the path smart organizations should tread in quest of executing their CSR.
The second area of future focus is influencing the competitive context in which companies operate. The competitive context significantly affects a companys ability to carry out its strategy, especially in the long run. Social conditions form a key part of this context. The ability to recruit appropriate human resources, for example, may depend on a number of social factors that companies can influence, such as the local educational system, the availability of housing and health facilities. When a company chooses to address social issues that intersect with its business interests it does both itself and society a meaningful service that is impactful, measurable and sustainable. A case in point is UnitedHealth Group, a leading health care company serving more than 75 million people worldwide, that has invested in two charitable foundations that complement its brand by improving the quality and cost-effectiveness of medical care, expanding access to health care services, nurturing the future health workforce and enhancing community well-being.
Therefore, the logical trend will be towards prioritizing of social issues in terms of value chain activities and the socio-competitive context. It may also entail a move away from generic social issues that are nice to do but do not garner a competitive advantage. This will form the realm of strategic CSR of the future.
Experts on HR
VP - HR