Integrating corporate responsibility into business strategy
Dr PV Ramesh, Chairman and Managing Director, REC, says that commitment towards nation-building constitutes the company's core value.
Both the company and the community benefit from CSR initiatives. Do you subscribe to this?
CSR practices are embedded as a genuine part of the company's value and operations as it helps to increase the company's profile and competitiveness. The government also recognises the role that CSR can play in contributing to India's economy, and therefore, law has been put in place for organisations registered under the Company's Act, 2015 that a budget of 2% of average net profit of immediately previous three financial years is to be allocated for CSR and sustainable activities every year. The government has provided a regulatory framework governing issues such as employment rights, environmental protection, equality and fair trading to ensure that the interests of enterprises and interests of wider society are mutually supportive.
In today's time, the investors care about social responsibility projects undertaken by the company they are partnering with. Not only does this mean that corporations must have sound business plans and budgets, but it also means that they should have a strong sense of corporate social responsibility. A strategic approach to corporate social investment can lead to potential benefits and create opportunities to build a reputation as a responsible business, which can in turn lead to competitive advantage. It helps you to be more favourable in the eyes of the clients. Therefore, it is important to have strong CSR projects which can increase the chances of getting news coverage as a corporation's image depends on its social responsibility projects and on how aware the clients or the stakeholders are about these projects. It is also important for an organisation to have a strong and mutually beneficial relationship with the community. It is at the local level that the impact of CSR activities can be felt in social, economic and environmental terms.
Can you discuss your company's CSR journey?
REC has been spending in CSR activities since 2009-10. The budgetary provision for CSR has increased from `3.18 crore in 2009-10 to `146.57 crore in 2016-17. Since the start of CSR in REC, our sanctioned amount has always exceeded the budgetary provision set for any particular year.
What are the key focus areas for your company's CSR ?
At REC, we believe that CSR and sustainability starts with a company's value system and a principled approach to doingbusiness. REC has been setting aside a portion of its profits each year for expenditure towards initiatives in various areas under CSR, such as education, women empowerment, and job oriented skill development programmes for the youth, health and hygiene, environment sustainability, etc.
What is the implementation method of CSR at your company?
At REC, before taking up any CSR project, baseline survey or need assessment study is conducted through our in-house resources or through specialised agencies or through assessing reliable data from recognised authoritative secondary sources, to assess the needs of the intended beneficiaries for a realistic assessment of the resource inputs required for the expected level of social/economic/environmental impact. All the documents collected is put on public domain through the company's annual report. As most of the CSR initiatives are taken up by the organisation in the chosen areas/locations in project mode, in association with select specialised agencies and the disbursements of CSR funds for implementing the projects are linked to achievement of prescribed milestones. There is a critical need for implementation progress/ monitoring of project from time to time, so as to ensure achievement of project objectives are in line with disbursement of grant funds. Therefore, REC does monitoring periodically with the help of identified key performance indicators; the periodicity being determined largely by the nature of performance indicators.
What is your CSR team's strength?
We have a dedicated division that looks after the CSR initiatives; the team comprises of professional from social work background as well as financial background. Further, we are under process for engaging people from social/development sector having national and international experience. Our regional offices across India ensure execution of our projects. In addition, we also engage third party professional agencies to execute CSR activities as well as to conduct impact/need assessment of project and its sustainability.