Role of CSR in Achieving SDGs
Simultaneous universal political developments centred on themes of welfare and Private-Public Partnerships see a distinct role for the private sector to contribute to the achievement of the goals.
The Sustainable Development Goals (SDGs) developed by the United Nations in 2015 seek to succeed the Millennium Development Goals (MDGs) by addressing its shortcomings and working to further strengthen and sustain development efforts where the former have been successful.
Covering vast areas of human development, equality and sustainability, the SDGs are mandated for the year 2030. Simultaneous universal political developments centred on themes of welfare and Private-Public Partnerships (PPP) see a distinct role for the private sector to contribute to the achievement of the aforementioned goals.
It is in this context that we see a direct co-relation between Corporate Social Responsibility (CSR) and the progression in working towards these goals.
How CSR works and its impact
Formerly understood as philanthropic, CSR has now been made legally binding under the Companies Act, 2013. All firms that fit the criteria listed in the Act are expected to contribute a certain percentage of their profits for social good. A collective impact of the same can go miles in achieving social development.
“The Companies Act (under Schedule VII) lists specified activities that fall in the purview of CSR.”
However, a critical concern is the rather undefined structures for the implementation and monitoring of these activities. In this context the SDGs can act as a guiding principle for CSR activities.
How do SDGs accommodate CSR?
The primary problem with MDGs was that it led to a donor-recipient relationship in the context of development, i.e., there existed a degree of dependency between policy activators (say the government or a First World developed country) and those who benefitted from such a policy (the target group or a third world developing country). The SDGs seek to attack this notion and thus stress on the need of a collaborative environment for achieving its objectives – thereby requiring all concerned and affected parties (the Government, the community and the company) to act in unison.
‘Creating a strong business and building a better world are not conflicting goals – they are both essential ingredients for long-term success,’ had mentioned William ClayFord Jr. Executive Chairman of the Ford Motor Company.
Collaboration is the key
At the latest Conference of Parties on Climate Change, India was declared as the sixth most vulnerable nation to climate change. This does not only mean a region-specific risk affecting the population but the businesses as well.
India’s climate risk is particularly with regards to fall in average rainfall and rise in average temperature, while the effects of the same will affect society at first, it will also eventually translate into an economic impact affecting regular business operations.
“Therefore, there is an imminent need for business houses to realise the far reaching impacts if we fail to achieve the SDGs and to work towards a positive change which will not only de-risk business but also add value to the society at large.”
Specific Cases to consider:
- Danone and Bangladesh
Danone, a health food company in collaboration with Muhammad Yunus’ Grahmeen Bank campaign launched the Grahmeen Danone Foods Ltd – a social enterprise that makes yogurts using the local farmers produce – leading to greater rural employment and remunerative earnings for the farmer. The profits of the enterprise are spent on community development while Danone has learnt the production of low-cost nutritious products and how to sell to lower income groups – a new market entry strategy.
- Westpac (Australia) and the Pacific
As a part of its 2013-2017 sustainability strategy, Westpac looked at greater financial inclusion of Pacific islanders (300,000 people) into financial systems, 50 per cent of which were women. The programme included creation of bank accounts and basic financial literacy awareness. While the programme helped in greater financial inclusion of marginalised sections of the population with equal weightage on gender equality, the project also helped Westpac to increase its customer base and to undertake diversification from an ageing Australian population demography.
- ASDA and water conservation
ASDA, a UK-based fresh produce retail chain undertook a study to analyse the impact of climate change on its supply chain. The study, covering all factors affecting price, quality, and availability declared that 95 per cent of the produce was under threat of climate change. Consequently, ASDA launched a drip irrigation project for the celery farmers of Spain in an attempt to reduce water requirements and to ensure long-term produce sustainability with the limited availability of water. This had a two-way impact in ensuring continuity in the supply chain for ASDA and water conservation for the Spanish village. The results of the study were made public to guide others in the sector.
4th Wheel is hosting a workshop on identification of contextualised indicators to measure SDGs in India. The workshop will showcase best practices on indicator identification and impact evaluation. Get more details of the workshop here and register to attend here.