Given the power of consumer franchise, all the market participants force is required to be aligned to support a new movement for innovation in corporate social responsibility or in short CSR.
To make â€˜consumer choiceâ€™ a compelling market driver would need creation of a supportive institutional framework to facilitate the process of making an informed choice by market participants. Elaborating on some of these enablers,
First, the Policy and Institutional Framework can be:
1.Market participants would need an effective tool to make an informed choice in favor of a responsible corporation. The Government can support the development of a series of Trustmarks (Tms) defined by Industry segments which could be displayed on products and services to convey to the consumer that the enterprise follows a strong commitment to building natural and social capital. These Tms, crafted on sound scientific and market principles are voluntary in nature and will stand for the positive impact a company has made on the environment and the society.
2.The Tms need to be administered by a reputed and independent body or bodies, much like the financial rating agencies. An institutional framework and appropriate guidelines can be created by a Government-industry partnership to provide organizational support and credibility.
3.Government can consider to extend fiscal and financial concessions, priority clearance and other incentives to organizations that attain sustained high ratings on Tms.
Role of industry:
1.In championing a sincere commitment to a vision that embraces contribution to Society as a key component of business strategy.
2.In moving towards voluntary disclosure of Triple Bottom line performance in the Companyâ€™s Annual Reports, verified by independent reputed third party organizations.
3.In making a strong effort to attain the CSR sustainability Tms and displaying the same on their products and services.
4.In enlarging the Companyâ€™s contribution by giving preference to vendors with a strong CSR and Sustainability orientation.
5.In encouraging Modern Retail outlets to develop special sections that display and sell products with Tms.
Role of Investors:
1.Investors play a critical role in encouraging social accountability in corporate behavior. Globally, there are today hundreds of funds that invest in socially responsible enterprises. These funds rely on Sustainability indices such as Dow Jones Sustainability World index, FTS4Good, Domini 400 Social Index and others to, guide investment decisions. These funds have already channeled large amount of investorsâ€™ savings into companies that have high social brand capital.
2.India has witnessed some welcome developments in this direction in recent years. The ABN Bank launched a Sustainable Development Fund as Indiaâ€™s first Socially Responsible Investing Fund. Recently CRISIL, S&P, and KLD have announced that they would develop an Environmental, Social and corporate Governance (ESG) Index of Indian companies. The institute of Chartered Accountants of India is also reported to be working on developing a similar evaluation.
3.Individual investors, while seeking to maximize returns from their portfolio holdings could exercise a powerful choice for companies with high Triple Bottom Line performance.
Role of Society organizations:
1.Consumer awareness will benefit immensely, if civil society organization and consumers bodies actively advocate the usage of Tms. They could also promote awareness amongst constituents to support products and services of companies with higher Sustainability ratings.
Making markets work for CSR will indeed provide the compelling foundation for such initiatives. The emergence of young global community share common views, common concerns, and common hopes and aspiration. This is a force that is lying dormant amongst Indiaâ€™s confident new young generation and once unleashed will be a formidable catalyst for change.