How to use CSR assessment to improve social impact?

Corporate social responsibility (CSR) is the legal mandate & obligation as well as commitment of businesses to act ethically and responsibly towards their stakeholders, society and the environment. It's very critical and important to review the performance of CSR in toto. By analyzing the CSR performance, one can identify one's CSR's strengths and weaknesses, measure one's impact and improve one's own CSR practices.?In?this?article, I have penned my views, based on my experience and learnings, on how to use CSR assessment to enhance one's social impact.

Context for CSR Assessment

• Besides being a compliance function, CSR (investment) is a strategic & sustainable means to community development. Irrespective of it being mandated, Impact Assessment enables measuring social return on investment, insights into fund utilization vs outcome on a periodic basis, and importantly help?in?course correction & corrective measures.
• Impact assessment, a very critical & integral component of CSR assessment, factors?in?baseline to end line assessment, mapping theory of change and deploy log frame model which is a function of input & activities and track output, outcome and impact. The methodology provides transparency & traceability of fund (utilization) vis-a-vis impact to stakeholders and shareholders. Impact measurement allows company the direction for future investment and strategy (policy) making.?
• Therefore, I believe that CSR Assessment should start with the impact assessment of initiatives and then gradually cover other aspects viz., strategy review, operating guidelines, perspective planning, stakeholder mapping, etc.

What is CSR Assessment?

• CSR assessment is the process of reviewing company's CSR policy guidelines, initiatives, outcomes as well as budget (fund) utilization vis-a-vis the impact.
• The assessment aims at providing the good practices and gaps, areas of improvement or replication, and to (re)set goals, priority(ies) or objectives
• CSR assessment should provide (1) insights into contextual review of CSR Policy; Guiding & Operating Principles; Strategy;?What’s working & areas of improvement; Stakeholder & Partner map; CSR investment pattern over the years vs outcome & impact (2) insights into comparative analyses with partners, peer reviews and other good practices (3) review of the NGO /NPO partners’ performances (4) short to long term goal setting; calibrating initiative indicators, and SROI (5) CSR perspective planning (3-5 years).
• CSR assessment should also review the transformation journey (of pertinent topic) of community and “theory of change” being fructified.
• The CSR assessment should be carried out either by the internal team comprising CSR committee, finance, legal/compliance teams, etc. or the external professional organization, which has expertise and know-how on this topic.

How to Choose or design CSR Assessment Tool(s)?

• Choosing or designing CSR assessment tool(s) is very critical - there is no right or wrong tool. The assessment tool should ideally be designed considering the scope of work and the objectives of the assessment.
• CSR assessment tool is a powerful way to analyze the remit of CSR; end-to-end CSR processes; grant cycle processes; effectiveness of fund utilization and the impact created (by the NGO partners); effectiveness of the CSR policy on the outcome of the program and measures of the guiding & operating principles and the possible lifecycle approach under CSR project management.
• The assessment tool should look into the effectiveness of the stakeholders' engagement and partnership effectiveness, governance practices and regulatory compliances.
• Example one such tool, which cover the wide spectrum of above-mentioned scope is Theory of Change model coupled with Logical Framework (Log-Frame model) which comprehensively covers the above aspects. I have integrated these models into CSR assessment work. This tool is widely used with variation depending on the complexity and the company's CSR assessment requirements. This tool also encompasses the risk assessment (both internal and external) for the CSR of the company.
• Purely from the perspective of assessing the grant utilization effectiveness, Social Return on Investment (SROI) study is effectively used by the CSR / company. The SROI study findings provide the effectiveness of the fund utilized as well as possibly areas of improvement on grant management. Many companies are leveraging SROI studies to gauge the effectiveness of fund utilization vis-a-vis impact creation.
• There are reporting or assessment tools available e.g., Global Reporting Institute (GRI) Tool or Business Responsibility Report (BRR) tool, etc. for companies. Depending on the maturity of the initiative, budget availability, etc., these tools can be leveraged. However, it's important to note that every company can determine to create or choose a particular tool or combination of tools for the assessment purpose.

How to prepare for CSR assessment process?

• It is critical to first define the scope of work, remit and problem statements (or hypotheses) for which the assessment tool is to be designed.
• Next step will be to prepare the internal and external stakeholders for the entire assessment exercise. The positive messaging around the assessment is necessary as it's not a "fault finding" work but an exercise to improve the functioning of the CSR and optimize the grant utilization, and therefore the working constructively with stakeholder (esp. external) is of paramount importance. Thus, engaging with stakeholders from the start of the assessment is critical.
• Data and insight gathering is the next important step. The assessment team should leverage the Theory of Change (and Log-frame) tool or any such tool that has been designed for the assessment exercise.
• It's very important to determine budget requirements and the time-line for the activity.

Analyses and Communication of the Assessment Result

• Once the assessment work is over, the interpretation and analyses are essential. Analyses should provide the comparison with the goals, targets and objectives set out, with the prevailing practices or benchmark, etc. The benchmark can be done with the local or global standard.
• The assessment should also focus on the SWOT (Strength, Weakness, Opportunities, and Threats) analysis and PEST (Political Economical Social and Technological) analysis.
• Upon analyses and review, the final step should be the feedback sharing with the CSR committee, other internal and external stakeholders viz., NGOs or implementing partners.

Challenges and Factors for Considerations

• CSR assessment should not be seen one off activity. The CSR assessment should be driven as an on-going or driven at a particular frequency. CSR assessment should be a collaborative effort.
• For example, the SWOT and PEST analyses can / should be carried out once every 3 years, which will further help the company to better align CSR work with local geo-political scenario, company's strategy & thought-leadership; while Impact Assessment should be driven once a year supported by monthly monitoring & quarterly financial reviews, whereas the SROI to be conducted once every 2 or 3 years. While CSR assessment from the CSR policy, Governing & Operating principles point of view should be carried out once every 3 years. Further, these assessments are interconnected.
• CSR assessment should be pursued as company & stakeholders' collaborative effort for this initiative. What I meant here is the CSR function is being influenced & driven by geo-political situation, socio-economic requirements, ability & credibility of partnership, company's vision & core values, CSR strategy & budget, among other factors. Therefore, the assessment should be done in synchronization with key partners and stakeholders.
• Importantly, the NGO / Non-Profit Organizations (NPOs) or Implementing Agency and company (i.e., CSR) should work together for CSR assessment from the programmatic approach point of view. Context building and capacity enhancement for NGO partners, and it will be a critical success factor for the CSR assessment from programmatic perspective.

CSR assessment is a comprehensive process which should cover the aforementioned steps, and should, ultimately, aim at improving the processes, fund utilization effectiveness, effective implementation and adoption of policy guidelines, and reporting, disclosure & transparency for stakeholders, thereby improving the social impact. However, there may also be other factors which can contribute to the CSR assessment process that I would like the readers to comment.

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