When CSR takes the back seat

A mining company recently announced the temporary closure of its CSR (Corporate Social Responsibility) initiatives in Goa. The company had already hinted of the shutdown due to paucity of funds. The paradox being, the company was awarded the ‘Best CSR Project’ just a few days prior to this announcement. While there is no direct revenue loss, the closure seems to be an offshoot of the suspension of the mining activities in the state. This is a major setback to the Football Academy and healthcare initiatives of the company.

Recently, the Govt. of India had made CSR mandatory for companies based on certain criteria. The norms were primarily based on its financials. It has been less than a year and we already have a company citing arguably valid reasons for abruptly discontinuing their CSR initiatives. CSR definitely seems to have taken the back seat. But are the company’s justified in taking such a step? On the other hand the company may argue, should the beneficiaries of the CSR initiatives also suffer when the company is making a loss? This raises the fundamental question of what CSR means to the company.

Can companies shun from their social responsibility only because part of their business is not economically viable any longer? Corporates often argue that challenging economic conditions forces them to take hard decisions. Also companies are exposed to external business environment which is not within their control. However, companies need to be held accountable for their actions or inactions with regards to their CSR activities.

CSR is most often than not misconstrued as philanthropy or charity. Maybe companies that perceive CSR as charity do not take CSR seriously until and unless the pressure to internalise the costs of these CSR initiatives reaches an excruciating level. Corporates need to recognize the fact that business is very mercenary and it has to be balanced with some missionary aspect. CSR can help in getting that balance right.

Even if you do the wrong thing for the right reason, it works. But if you do the wrong thing even for the right reason, it doesn’t. When embracing a CSR initiative the approach might be philanthropic, but abrupt closure of it would certainly be irresponsible and unethical. This would also indicate the lack of strategic planning of the initiative. This myopic vision towards implementation of CSR initiatives can be detrimental to the image of the company as well as the stakeholders. Most corporates focus their investment in Healthcare and education as a part of their CSR programmes. Abruptly ending these programmes have a cascading effect on the families benefiting from it.

Although the primary responsibility of any business is to be profitable, the prosperity of all stakeholders not only shareholders should be reflected in the company’s action. CSR is one such concept that nurtures this equality amongst all the stakeholders.

As Abraham Lincoln rightly put it “the probability that we may fail in the struggle ought not to deter us from the support of a cause we believe to be just.”