Tech underpins new wave of Indian corporate social responsibility

“There is something magical about the convergence with people halfway around the world. The issues you are dealing with in South Africa are so similar to the ones we are going through in India.”

So says Priya Naik, founder and CEO of Samhita Social Ventures in India, addressing delegates at the Trialogue Business in Society Conference in Johannesburg on 9th May. Ms Naik, whose company name ‘Samhita’ means ‘collective good’, was updating South African delegates on corporate social responsibility (CSR) developments in India, where the government introduced a CSR law in 2013.

India has the sixth-largest economy in the world, the largest youth workforce globally and one third of the world’s poorest people. The 2013 law was introduced to encourage some 16,000 companies to engage with government and civil society “to leverage their core strengths to improve how India functions”.

Indian companies over a certain size now have to spend 2% of profit after tax on CSR. Their boards also have to discuss CSR four times annually. “The regulation has brought humanity into the boardroom.”

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By 2016, almost 19,000 companies contributed over $2bn to CSR, with the top 10 accounting for a third of spend. Key sectors included education, healthcare and rural development.

“The bulk of Indian expenditure, however, went into infrastructure such as building school toilets. This was a response to government calls for action – education and sanitation – without considering the larger picture such as water and waste disposal,” said Naik.

Samhita has played a key role in bringing corporates, government and related organisations. “Indian CSR has transitioned from crazy cheque writing, to much larger, strategic thinking,” she explained.

Ms Naik outlined four current trends in Indian CSR:

• Strategic CSR: Companies are moving towards more strategic, systematic and differentiated CSR initiatives, with a growing focus on flagship programmes;
• Governance: Companies are strengthening their own governance capabilities, with some setting up their own foundations;
• Collaboration: There is increasing appetite for collaboration with other companies, government, foundations and social enterprises – and investing in innovation through these partnerships; and
• Execution: Companies are slowly building up their own CSR teams, but finding professional talent remains a concern.

Three key challenges remain:

• Fragmented decision-making: Companies face knowledge gaps at every stage of the CSR life cycle, and there is an absence of common frameworks, benchmarks, standards and best practice;
• Mismatch of expectations: Stakeholders, brought together by the law, are still working in silos and sometimes at cross purposes. Smaller, local NGOs have been unable to access opportunities; and 
• Absence of enablers: The CSR ecosystem currently lacks relevant intermediaries and enablers, which are necessary for bridging gaps and ensuring cohesive and strategic decision-making.

“The CSR ecosystem in India is chaotic, preventing stakeholders from accessing information, partners and resources.”

For example, most companies allocate funds to sanitation, but are not spending all their budgets as they are unsure who to give funding to. An already complex situation is exacerbated by India’s caste system and the diverse stakeholders involved.

“Tech-enabled collaboration successfully brings together diverse players across the ecosystem in a single place. Samhita’s GoodCSR platform eases implementation, monitoring, evaluation and reporting. We want to co-create standards for CSR excellence to ensure transparency, best practice, deepen scale and impact, build accountability, increase efficacy and efficiency.”

Ms Naik said this tech platform enabled them to disseminate knowledge and report to multiple stakeholders. “The role of technology is critical. If we lose sight of how technology is going to disrupt matters over the next few years, we will be in a lot of trouble.

 “We have learnt a lot here (in South Africa) and are looking forward to working together.”