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By Liz Cross and Liz Allen

India has become the first country in the world to mandate a minimum spend on corporate social responsibility (CSR) initiatives.  Its new CSR guidelines require companies to spend two per cent of their net profit on social development and it seems to have provoked celebration and derision in equal measures.

The CSR guidelines are, of course, commendable, but our question is ‘would they not be better, like most things in life, if they made it compelling rather than compulsory?’

Having worked with businesses, charities and social enterprises in India and other parts of the world over a number of years, we believe ‘compelling’ would be more fruitful and we have evidence it makes for better business.

We applaud the intentions of the Indian government to require businesses to invest in CSR but in mandating it, many may overlook the evidence we can share that those companies that embed social responsibility in their DNA improve their trade, derive competitive advantage and increase profitability.  With a more sustainable commitment to doing well and doing good, companies also attract and retain talent – for profit is easy; more than for profit unlocks creativity.  

Put simply, trading in a more social, entrepreneurial and ethical way (and then measuring the impact on profit, people and planet) unlocks the innovation and discretionary effort in the workforce and customer base – and enables you to do well and do good. 

So being an investor in positive social change shouldn’t – and doesn’t have to – feel like a corporate task or even a corporate tax.

When contributing as key note speaker at two events for the UK India Business Council, we met business leaders, based in India and in the UK, who get the imperative of trading for mutual advantage; they are open to leading the way in changing how businesses grow and trade internationally, which delivers more and wastes less.

We met universities, innovators, manufacturers and professional bodies that get the need to develop emerging leaders who change the way we build sustainability on a global basis.

Whether we agree with the approach to set such a target or not, the law has changed and the Indian government has set out specific guidelines on how CSR activities should be handled, stipulating they should be implemented by a CSR committee that includes independent directors.

Our experience of working on and with those developing the Public Services (Social Value) Act 2012 and its implementation, gives us an insight as to how India-based/India-facing businesses could develop and deliver more social impact and grow commercial value too.  

We have worked with a UK-based construction business to create competitive advantage that has enabled access to £1bn new framework opportunities and social and environmental returns that would make most charities proud with their achievements. 

We know a lot about governance and evidence based philanthropy and social investment, so if you want to avoid this new legislation feeling like a tax and actually seize the opportunities it might create, we’d love to bring all our experience and proven track record to help you see the compelling reasons to do well, do good and do it with concern for dignity, mutuality and sustainable wealth creation  

Why not talk to us about how we can help?

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