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Giving Compass' Take:
• Stanford Social Innovation Review takes a look at the landscape in India when it comes to Corporate Social Responsibility and finds that there are a lot of opportunities to catalyze development through business.
• What can US companies learn from this piece? There's a good rundown of what the components for "catalytic interventions" are, kept general enough that it can easily apply to CSR practitioners around the world.
India became the first country globally to introduce mandatory requirements on corporate social responsibility (CSR) for companies, under Section 135 of the Companies Act, 2013. The mandate’s objective was to make companies “discharge their social responsibility through their innovative ideas and management skills,” and government hoped it would breathe new life into the development sector.
Against the backdrop of widening income inequality and an estimated 260 million people living below the poverty line, CSR funds accounted for a mere 1 percent of the total public spending in India in 2015-16. So far, companies have preferred to spend their CSR monies on programmatic grants that focus on direct delivery of services. But if companies are to make meaningful progress against the development challenges at hand, the very nature of how they see CSR needs to evolve.
Companies need to shift focus in two ways: from individual to ecosystem, and from delivering services to building capacity and enabling the market.
In other words, companies need to become catalysts for development.
A catalytic intervention is defined by its ability to:
- Unlock more resources by seeding the flow of mainstream capital
- Address market failures
- Reduce transaction costs and information asymmetry between various actors
- Introduce new stakeholders to the ecosystem and leverage their competencies
Furthermore, there are three ways in which companies can be catalytic: through how they spend their CSR funds, who they work with, and how they leverage their core business competence to achieve social outcomes.
Read the full article about the new frontiers in Indian Corporate Responsibility by Anushree Parekh and Sandhya Tenneti at Stanford Social Innovation Review.