Anirban Ghosh, Vice President, Sustainability, Mahindra & Mahindra talks to Samhita Social Ventures about Mahindra’s CSR strategy. He speaks about the need to shift focus from merely implementing CSR activities to looking at creating long-term impact. He also presents a perspective on the challenges that both companies and NGOs face while implementing CSR programs and his long term goals for M&Ms CSR.
Q: What is Mahindra & Mahindra’s CSR philosophy? What are your key focus areas? How do you address these issues?
Our core philosophy is to make a difference to a community. Questions that arise when we think about how to do this are – which community and how do we make a difference?
Most, if not all types of CSR activity, are good to do. There are various needs and various kinds of people; so choosing a program eventually boils down to a question of relevance and a question of the competence of an organization to work in a particular area of CSR.
Q: What factors do you look at while assessing an NGO? Would you choose a well-established organization over one that is smaller but has a wider reach amongst rural communities?
We believe that the biggest thing that an NGO brings to the partnership is a “community connect.” For a corporate organization like us, we neither have the time, ability or resources to build up that connect and if the connect happens to be with an NGO that is not particularly big we’re fine with that. At the same time, we would assess them on their ability to deliver- to the extent possible- because at the end of the day we don’t want to do a lot of activity with no impact. We are not averse to working with newer smaller NGOs, but of course they have to satisfy the criteria which the government has put up.
Q: When you are implementing your CSR programs, how much emphasis do you place on long-term strategies in the field?
In every one of our factories we’ve asked people to adopt a cluster of villages for at least 5 years- because we’ve seen in some of our other large CSR projects, like watershed development, after investing about 20 lakhs a year in a village you make some difference at the end of 5 years.
Since we have a very strong agriculture business we look at agri-productivity enhancement because wherever you go you can increase the productivity of agriculture – which directly has an impact on rural household income. To my mind that’s the best kind of CSR – whatever increases the income of the household or helps increase the income earning capability of persons in a household. So, as many programs that help them increase their income, we’d be happy to do.
Q: What do you expect from NGOs in terms of their impact? Do you look at other factors when judging the effectiveness of a program?
There has to be impact, that’s a no-brainer. In CSR, typically, you do an activity and then ask the question what is the impact? I think that’s putting the cart before the horse. You don’t do that in business. You say, this is the impact I want – I want to sell a 100,000 units, so what do I need to do?
How is it that in CSR we don’t start by defining the impact and then choose what to do?
This is how we would like to approach CSR, so for all our large programs we’ve set goals like this. Since we are an automotive company it is important for us to do work in the area of road safety. Usually lots of activities happen but roads don’t get safer. So we’ve said that we will be focused on reducing the number of fatalities on the road. There are around 140,000 people who die a year on the roads. It is the highest number in the world and there is even a suggestion or belief that we underreport by at least 100%. So the actual number of people? Phenomenally high.
We are initiating fairly large projects with goals to reduce or bring to 0, the number of fatalities that take place on a stretch of road. That’s the impact we want and everything we do will be aligned to that.
Q: Do you have any specific challenges that you face while working directly with NGOs?
When somebody else is doing the work for you on the ground there are immediate issues with that entity being a direct reflection of your own brand image. There are certain risks – one is that your partner does not reveal who is funding him, in which case you’re putting in the investment and he’s garnering the equity. In most places where we are doing work we would want the community to know that we are helping them. You have a Companies Act and it’s specified that a certain amount of money needs to be spent, then for the sustainability of the business it’s important that the name be known. This is not the conventional form of behavior expected in philanthropy, but philanthropy does not have spending mandates.Let’s say that the NGO does make the name known. Then the manner in which the NGO behaves is interpreted as the manner in which the company is behaving – so it had better be consistent with the values of the organization. It becomes a bit of a challenge, to ensure that nothing happens on ground which sullies the image of the brand. There is a lot of faith involved because you never know everything.
The ability to get every rupee utilized well is also something that we worry about. If I were running my NGO and I had one guy working on 4 different projects, after some time the cost of implementing projects should become less. I don’t see that happening and I don’t know how the NGOs will deal with it.
Q: What do you think about investing in capacity building and the overheads of an NGO?
Capacity building is easy to tackle. There is a term I floated called white-collar ESOPS (Employee Social Options). White-collar because these are not the kind of tasks that we are usually asked to do. Say an NGO needs to make a funding proposal, they are small and their ability to make a proposal is low. Let’s say I am a conglomerate making lots of funding proposals, I’ll get one of my colleagues to work with the NGO to help them with their funding proposals and therefore build their capability to do this. We are quite happy to do it as part of our ESOPs and this doesn’t cost any money. In the CSR space, the one thing that needs the least amount of money is training.
Q: But what about overheads?
Overheads are required. I’ve never been in an NGO, so I don’t know where their problems are. I was asked, in a CSR congress, about an NGO that needed money to build an IT system. It’s true, where will the NGO get the money from? In the project budget they can’t say, “I want to buy an IT system,” I’ll probably say no, because it’s not only for me. I understand that they will have problems of that kind but I don’t have an answer to this, yet. Probably the answer lies in different kinds of funders, somebody who funds programs and somebody who funds capacity.
Q: How do you engage your employees? Tell us more about the white-collar ESOPS that you instituted.
Today we don’t have too many of those projects but what we’ve said is that over time, in every one of our projects, we will identify ways in which we can engage employees to do ESOPs in a way that their skills are leveraged. There was an NGO that wanted us to invest in some R&D work so I had one of my colleagues look at their R&D program because he does that every day for our business so he might as well give me an assessment of this business. Some of these projects have gone some distance, some have yet to really get anywhere but we would like to create as many such opportunities as possible.