Despite a strong interest in impact investing, only 28% of organizations feel “very prepared” to navigate its complexities, according to Deloitte India’s CSR preparedness survey. Over 50% of organizations are engaging with India’s Social Stock Exchange and exploring innovative models like social bonds and pay-for-success initiatives. This indicates a significant interest in adopting impactful financial strategies, but highlights a gap in readiness and expertise.
Evolving CSR Strategies Amid Regulatory Changes
The survey reveals that half of the organizations are re-evaluating their CSR strategies due to changing regulatory landscapes and enhanced disclosure requirements, both locally and globally. This shift is pushing companies to rethink their approaches to CSR, ensuring they are not just compliant but also strategically aligned with broader business goals.
India’s CSR landscape is shifting from compliance-driven activities to strategic imperatives, with 80% of organizations recognizing CSR as crucial to their corporate strategy. This transition is underscored by 80% of organizations measuring the performance and progress of CSR initiatives in-house, indicating a move towards standardized monitoring for accountability. This approach allows organizations to not only track their CSR efforts more effectively but also demonstrate their impact in a quantifiable manner.
Sumeet Salwan, Partner at Deloitte India, emphasized that CSR has become a strategic driver in corporate strategy, now prominent in boardroom and investor agendas. He noted, “The growing trend in CSR expenditure highlights its role in catalyzing societal progress, with strong leadership integrating CSR as a strategic lever to address beneficiary needs effectively.” This strategic integration is vital as it ensures that CSR efforts are not isolated initiatives but are woven into the fabric of the organization’s overarching strategy.
Approximately 25% of the surveyed organizations reported spending Rs 100 crore or more on CSR activities. Those with over 15 years of experience have even established dedicated foundations to drive their CSR initiatives. This level of investment and commitment reflects a deep-seated recognition of the importance of CSR in driving long-term value for both society and the business.
Technology’s Crucial Role in Shaping CSR
Technology is playing an increasingly important role in CSR, with over one-third of organizations willing to invest in tech solutions for effective CSR management. These technologies range from big data analytics and artificial intelligence (AI) to enterprise resource planning (ERP) systems, all of which can enhance the efficiency and impact of CSR initiatives.
However, technology also poses significant challenges, with about half of the organizations identifying it as one of the top three challenges in CSR implementation. Amit Tandon, Partner at Deloitte India, highlighted the importance of embracing technology in the evolving CSR sector. He stated, “Companies need to invest in big data analytics, AI, and ERP systems for effective CSR implementation and monitoring. Prioritizing knowledge sharing, collaboration, and upskilling through training programs and partnerships with tech providers is essential.” This investment in technology and skills is critical to overcoming barriers and maximizing the impact of CSR programs.
The survey also found that 65% of organizations have started conducting mandatory impact assessments following amendments to CSR regulations in January 2021. These assessments help organizations to evaluate the effectiveness of their CSR activities and ensure they are achieving their intended outcomes. Most organizations are leaning towards output-led decision-making to drive growth and ensure superior project outcomes. Their CSR programs primarily focus on healthcare, sustainability, and education to address key societal issues effectively.
In conclusion, while many organizations are interested in impact investing and have begun integrating CSR into their corporate strategies, there is still a significant need for increased preparedness and technological investment to fully realize the potential of these initiatives.
