The India effect of CSR legislation and enterprise management

With the continuous development of the information industry and the advancement of trade globalization, India has become a new star in Asia's trade, finance, technology and film industry, and has played a leading role in CSR and sustainable development. What changes have occurred in India’s CSR driven by legislation? Does it also affect Indian management education? Does CSR play an important role in management teaching? 
 
China Sustainability Tribune interviewed Dr. Divya Kirti Gupta about CSR development and management education in India.
 
Dr. Divya Kirti Gupta is working as Associate Professor at GITAM Hyderabad Business School, GITAM (Deemed to be University), Hyderabad, Telangana State, India. She is the ambassador of the Academic & Research Group, ISO26000 Stakeholders Global Network (ISO 26000 SGN) and elected representative of developing countries for Stakeholder Advisory Group, ISO26000. She is also the co-drafter of ISO 26000, the International Guidance Standard on Social Responsibility of Organizations. Her research interests include CSR, Organization Development, e-Democracy, and Management Thought.


China Sustainability Tribune: CSR behavior (in addition to adhering to the most basic corporate bottom line) has always been considered voluntary and is based on a company’s own situation and related strategies. However, CSR behavior is enforced by the law which requires that “any large enterprise that fails to meet the minimum standards should explain its failure in its annual report. Otherwise, the company will be fined.” Some people think it will backfire and make enterprises lose the initiative to fulfill their social responsibilities. What is your opinion?

Dr. Gupta: In India, companies have been focusing on CSR for quite some time now. GRI and SDGs have been quite popular in India. This is still continuing. However, with the Companies Act (2013), a new way has got added, which provides direction for the organizations and enables CSR engagement of more organizations in India. ‘Schedule VII’ of the Act clearly mentions the focus areas that may be considered by the organizations for their CSR initiatives and interventions. 

This doesn’t mean that the organizations are being told to do and act upon a scheme, or their freedom of choice is being curtailed, but in fact it is leading to a convergence, which I call ‘Tri-element Convergence’. The three elements in this are: (a) The needs of the society; (b) The vision of the corporates in terms of their social responsibility towards society; and (c) Government and NGOs’ efforts for the sustained development of society.

I agree that there might be shortcomings in this approach. Your concern on making CSR mandatory is genuine. At times, there are coordination issues in the ‘Tri-element Convergence’. It impinges upon the implementation, execution and transparency. 

Nevertheless, people are closely observing the system. There is a dynamic process of feedback and assimilation, which is helping government, organizations and people in fine-tuning their convergence. It is also encouraging them to address the new dimensions and challenges in CSR. Capacity building programmes are being organized by different agencies for those who are designing and implementing CSR policies in the organizations. Most importantly, National Standards are being developed around the CSR requirements of the Companies Act (2013) for certification. 

Hence the legislation not only attempts to provide encouragement and direction for the ideas and efforts in CSR in India, but it also provides scope for the companies to improve their CSR footprint. Therefore, there is a continuous review and exchange of views in the system, there is sufficient space for course correction.