In times of disaster and crisis, the importance of a coordinated and effective response cannot be overstated. Beyond immediate relief efforts, there is a growing recognition of the role that Corporate Social Responsibility (CSR) plays in disaster response and resilience. This blog post explored the pivotal role of CSR in building stronger communities and fostering resilience in the face of disasters. From proactive disaster preparedness to sustainable recovery and long-term resilience building, CSR initiatives have the power to make a significant impact. With CSRs stepping into disaster, it can contribute to creating a more resilient and prepared society.
Proactive disaster preparedness can help in building resilient communities. CSR initiatives can play a pivotal role in supporting early warning systems, risk assessments, and community training programs. By investing in disaster preparedness measures, businesses can help communities become better equipped to respond to and recover from disasters by driving their resources and knowledge toward disaster risk reduction, infrastructure development, and capacity building, emphasizing the need for a comprehensive approach to strengthen resilience. This becomes a pivotal cause for the corporate donors that are functioning in disaster-prone regions. The companies can invest in early warning systems by providing financial support for the installation of advanced monitoring equipment and establishing a communication network that can quickly disseminate alerts to the local population. It can also support risk assessments conducted by experts to identify vulnerable areas and develop strategies for mitigating risks. Further, it can organize community training programs in collaboration with NGOs. These programs educate residents on emergency preparedness, including first aid, evacuation procedures, and the establishment of community-led response teams.
At the global level, nearly 700 major catastrophes take place every year affecting billions in different countries. The disasters periodically visit the same geographical regions and set the development clock back by decades. It is similar to taking two steps forward and one step backward. In some countries, this equation even gets reversed. The repeated occurrence of natural catastrophes undermines the economic viability of the communities as well as the corporate sector – further impoverishing the impoverished and sapping the very soul. It is estimated that 28 developing countries, including India, suffered direct losses of over 1 billion USD each during the past twenty years. In respect of some countries, it amounts to an erosion of over 1% of their annual GDP. In India, natural disasters eroded 2% of the GDP during 1996-2001 and consumed 12% of the Government revenue during the same period. On average, the disasters have been affecting nearly six million people annually in India, and over six percent of the population is directly hit. In addition, natural disasters pose a major threat to economic development in India as disaster-loss figures are rapidly increasing.
For example, during 1965-1980, the losses were to the tune of 2.9 billion USD while during 1981- 1995, the same increased to 13.4 billion USD according to the ministry of Disaster Management of India. The three major natural disasters in recent years to have caused massive losses to the industries and the corporates have been the Gujarat Cyclone of 1998, the Orissa Super-Cyclone of 1999, and the Bhuj Earthquake of 2001.
The Gujarat Cyclone of 1998 with two landfalls and a wind velocity between 170-200 kmph, ripped through the industrial heart of Gujarat and inflicted an economic loss of nearly Rupees 2,500 crores. The Kandla Port, gateway to the granaries of north India and the industrial belt of west and north India, and neighboring facilities suffered extensive damage and a loss of nearly 600 crores. The corporate sector including Reliance Industries’ Jamnagar oil refinery suffered losses amounting to Rupees 100 crore and Gujarat State Fertilizer Corporation’s output was disrupted to the tune of 2,000 tonnes per day. The wind lifted the heavy cranes and machinery and twisted the transmission towers.
The Orissa Super-Cyclone in 1999 inflicted a cumulative loss of nearly 1,000 crores on the industrial sector. The major industries like the Paradeep Port, Oswal Fertilizers, and CESCO suffered heavy losses. A large number of industrial units remained inundated for days together.
However, it was during Bhuj Earthquake, 2001 that the need for a comprehensive strategy and planning targeted at safeguarding the industrial and lifeline infrastructure was underscored. The earthquake caused nearly ten thousand industrial units to go out of production as it struck the industrial heartland of the State. The total economic loss was assessed at over Rupees five thousand crores. The entire spectrum of industries including lifeline structures like bridges, roads, power, rail network telecommunication, air control towers, and aerodromes suffered damages and hampered restoration and rehabilitation activities.
These are all prime examples of why the role of CSR in disaster management must be strengthened to increase resilience and build stronger and better barricades when disasters hit.
During times of crisis, immediate disaster relief efforts are crucial in saving lives and providing essential support to affected communities. Under CSR, corporate donors can provide emergency aid, such as food, water, shelter, and medical assistance. Recognizing the urgent need for shelter, the company collaborates with relief agencies and NGOs to set up temporary shelters for those displaced by the earthquake. They can provide tents, sleeping mats, and other necessary materials to ensure that affected individuals and families have a safe place to stay until more permanent solutions can be implemented. Recognizing the importance of timely and accurate information during a crisis, the company can support communication efforts by setting up communication centers and providing access to communication devices. They can work with local communities and relief organizations to disseminate vital information about relief services, emergency contact numbers, and safety precautions to ensure that affected individuals are well-informed and can seek help when needed. This way, timely and coordinated response efforts can be ensured by the companies by leveraging their resources, expertise, and supply chains to deliver effective relief.
One of the major mechanisms for risk transfer is the insurance sector and the proposed instrument is the insurance-linked savings-cumloan-cum-subsidy scheme. The logic behind cross-sectoral risk transfers is that the transferor takes on the risk as a part or consequence of its core business and his incentive is that the cost of transferring or hedging the risk is calculated to be lower than the cost of retaining it.
However, insurance in India is yet to receive due recognition as a socio-economic issue with the result that the insurance market in India, both life and non-life, has not been able to fulfill its potential and achieve higher penetration levels. The cover for natural disasters is today considered as part of the cover against the fire hazard. The need of the hour is to view disaster insurance as a step toward disaster preparedness. In some countries, a typical insurance strategy for catastrophic risk allows insurance against “layers” of risk up to 100 to 500 years with the underlying rationale being that losses up to a certain limit can probably be sustained without major difficulties whereas for rarer but more catastrophic events risk transfer needs to be undertaken.
Long-Term Recovery and Rehabilitation: Rebuilding Lives
Disasters often leave a lasting impact on communities, requiring long-term recovery and rehabilitation efforts. CSR initiatives can contribute to rebuilding lives and ensuring sustainable development post-disaster through livelihood restoration, infrastructure reconstruction, and social welfare programs to enable communities to recover and thrive. The company takes an active role in rebuilding homes and infrastructure that were damaged or destroyed by the flood. They collaborate with local authorities, NGOs, and construction firms to design and construct safe and resilient houses, schools, healthcare centers, and other essential facilities. They support vocational training programs, entrepreneurship development, and microfinance initiatives that empower people to rebuild their businesses and regain self-sufficiency. Recognizing the psychological impact of a disaster, the company invests in psychosocial support programs. They can also partner with mental health professionals and organizations to provide counseling services, trauma support, and resilience-building activities for individuals and families affected by the flood. Through partnerships with NGOs, government agencies, and local stakeholders, businesses can play a crucial role in supporting long-term recovery and contributing to the overall well-being of affected communities.
Conclusion
The role of Corporate Social Responsibility (CSR) in disaster response and resilience is of paramount importance. From proactive disaster preparedness to immediate relief efforts, long-term recovery, collaboration, community engagement, and sustainable development, CSR initiatives can make a significant difference in building stronger communities and fostering resilience during times of crisis. Here are some of the NGOs listed on Give Discover that are actively working on Disaster Management. As disasters become more frequent and severe, the need for robust CSR practices in disaster management becomes even more critical. A collective effort to embrace the power of CSR and work towards a more resilient and prepared future for all is the need of the hour. Are we ready for it?
Disclaimer: This article has been published by Give Discover which is an information platform providing browsable and searchable information about social impact in India. The purpose of the article is to simplify and share information. The above article is no substitute for the legal/expert interpretation. Expert advice on these matters is advised and recommended. Give Discover does not take any responsibility for any loss or damage caused to any organization or individual in any manner, due to any step taken, directly or indirectly, on the basis of the above article.
