Leveraging CSR to finance technological innovations that catalyze social transformation
In 2019, Finance Minister Nirmala Sitharaman announced that the scope of corporate social responsibility (CSR) was being expanded to allow companies to support research and innovation through government-funded incubators, or government-funded agencies. central and state governments or state utilities.
In addition, any contribution intended to support public universities such as IITs could also be considered as CSR. This has opened up exciting opportunities for companies to deviate from traditional ways of spending on CSR, such as donating to NGOs and charities, contributing to disaster relief funds or launching campaigns. and short-term CSR projects.
Wouldn’t it be more exciting to create new technologies that change our solution-seeking paradigm than to implement existing technological solutions?
Two factors motivate CSR. First, it is a compliance issue. Most Indian companies are required to spend 2% of their average net profit over the past three years on CSR activities.
Second, it is increasingly being used to create a positive brand identity for companies and contribute to their ESG compliance. Branding has grown in importance as stakeholders have become more aware and involved in social issues. Employees, investors and consumers are now looking to partner with organizations that are just as interested and committed to doing social good as they are. Several European banks’ borrowing rates are linked to a company’s commitment to ESG and social impact.
In response, Indian companies are also trying to present a more holistic brand image to the public. Challenges, despite this growing awareness, remain in identifying the right partners and projects, as well as selecting projects that are long-term impactful, scalable and self-sustaining.
Technology for social good
It is now widely recognized that the key to non-linear scaling of any project lies in leveraging technology. Solving societal problems is no exception. A policy environment that encourages CSR investments in technology-driven solutions has made sustainable and scalable solutions a reality. In addition, collaborations with local organizations and the establishment of governance and community engagement structures can ensure that these projects become self-sufficient in the long term.
The Center announced that January 16 would be celebrated nationwide as Startup Day. There is a vibrant and thriving start-up ecosystem centered around most higher education institutions. These institutions are high-energy centers of innovation and pioneers in the development of technologies and innovations with social impact.
For example, IIT Madras is home to one of the best deep tech startup ecosystems in the country, with a new tech startup incubated every week. Working in sectors such as health, education, agriculture, skills development, housing, energy, clean water, etc., these companies present a huge opportunity for businesses to partner with. and to have a profound social impact.
CSR can be used to significantly support the higher education sector in several ways. Funds may be channeled towards the implementation of socially relevant projects conceptualized by faculty members, or to support scientific research that will uncover answers to key scientific questions underlying social problems.
Additionally, grants can be awarded to government-recognized incubators, establishing new incubators, helping existing incubators hire more people through internships and fellowships, and providing seed funding for start-ups. start-ups. The fact that the government’s CSR policy allows a company to choose to intervene at any point in the process of creating end-to-end technological value is a great catalyst.
Several examples of such projects aimed at solving major social problems in different fields can be presented. Some of the examples include creating sustainable, affordable and recyclable building materials, developing India-centric greening options such as new heat and power management systems, and addressing socio-technical issues. (such as flood management systems) by carrying out a thorough risk analysis. on the relevant parameters.
Projects such as these, made possible by CSR funding and led by higher education institutions, accelerate the transition from lab to actual and serve communities in innovative ways.
Leveraging CSR for innovation through educational institutions such as IITs also presents an opportunity to harness and nurture the potential of students and faculty. These institutions and incubators are hotbeds for creating the next generation of innovators.
Globally, IIT alumni are contributing to the development of sustainable businesses. There is also an increased sensitivity and responsibility among these young people to find innovative solutions to social problems. Indian companies must recognize the dynamic intelligence and talent of these highly motivated individuals and invest in them for socially relevant initiatives aimed at improving society.
Whether it is sanitation, energy, water, agriculture or power, there is a technology solution for every critical need waiting to be researched, developed and implemented. It’s time for companies to leverage their CSR to invest in projects that will create long-term transformative value, drive change, contribute to the research and innovation ecosystem, and nurture future talent by establishing partnerships with educational institutions.
CSR should be invested in creating unimaginable technological solutions to chronic societal problems.
Panchagnula is Dean (Alumni and Corporate Relations) of IIT Madras; and Nair is CEO, Office of Institutional Advancement, IIT Madras
February 16, 2022