With Indian consumers becoming more ’cause’ conscious (read: CSR a buzzword), their brand preferences keep shifting to favour the brand that is socially more responsible. The phenomenon directly creates a connection between the sales and the CSR.
The trend suggests, ‘the better the CSR policy, the more the sales.’ The trend affects most product categories that are bought on a daily basis, with consumers making a purchase decision almost every day. This could be one of the major reasons why Indian FMCG companies are most actively engaged in responsible activities and rank on top in the latest Associated Chambers of Commerce and Industry of India (ASSOCHAM) report on CSR by Indian corporates. The report says that of 175 Indian companies studied, 52 companies in the FMCG sector have taken the maximum of CSR initiatives. This was followed by the chemical sector and then the IT sector.
Most of the initiatives taken by the companies primarily focus on welfare of the community. ‘Community welfare’ ranks on top in the priority list in the ASSOCHAM study. The second most-sought-out CSR initiative was providing education and enlightening the rural youth in the country.
With stringent norms, lure of carbon credits and growing consciousness, environment-based CSR initiatives get the third place in the priority list of Indian corporates. Healthcare follows environment and becomes priority number four.
‘Though there has been evidence of a paradigm shift from charity to a long-term strategy, the concept is still believed to be strongly linked to philanthropy. There is a need to bring about an attitudinal change in people about the concept by having more coherent and ethnically driven discourses on CSR,’ wrote Swati Piramal, president, ASSOCHAM, in one of her articles related to the report.
‘It has to be understood that CSR is about how companies balance their business ethics and behaviour with business growth and commercial success along with a positive change in the stakeholder community,’ Piramal added.
Bhartruhari Mahtab, member, parliamentary committee on finance, wrote: ‘Ideally, CSR policy should function as a built-in, self-regulating mechanism in which companies would monitor and ensure their support to law and ethical standards.
‘Companies would also embrace responsibility for the impact of its activities on environment, consumers, employees, communities, stakeholders and all other members of the public sphere.’
Mahtab’s quote was in sync with what NR Narayana Murthy of Infosys, who stated: ‘CSR is really about ensuring that the company can grow on a sustainable basis, while ensuring fairness to all stakeholders.’