In a world where innovation is rapidly commoditised, strategic differentiation is becoming less about what companies produce, and more about what they represent. Historically, companies have embedded themselves in society through philanthropic Corporate Social Responsibility (CSR) efforts. But going beyond philanthropy calls for deep, embedded, and long-term commitment — strategically aligned with business goals.

Globally, the top five US companies — with a market capitalisation of over $11 trillion — now collectively impact more than 22 per cent of the GDP of the six largest global economies. As governments scale back or struggle to fulfil their social mandates, expectations from the private sector are increasing dramatically. The question is: how can CSR become more than social goodwill? How can businesses see strategic advantage in it? And can AI play a role here?

Unique datasets

As Jay Barney and Martin Reeves argued in the Harvard Business Review, sustainable competitive advantage now comes from proprietary, continuously improving data, especially when used with AI. Interestingly, such unique datasets no longer emerge from customer behaviour only, but are generated from insights of CSR initiatives — especially when such initiatives are rooted in the company’s core mission and executed with compassion.

CSR, in that light, becomes more than a trust-building vehicle, it is a unique database generator, and a brand amplifier. Thus CSR in India has to evolve much beyond the 2013 Companies Act mandating certain threshold of CSR spending. CSR is no more “feel-good” stories and instead proactive business choices.

When companies collect high-integrity, on-ground, micro level data on everything from human behaviour to infrastructure needs — and use it responsibly with AI, they unlock context-specific insights that are difficult to imitate. A healthcare company undertaking CSR in underserved areas, identifies longitudinal patterns in maternal health and deploys predictive interventions using AI for sustainable competitive advantage. This cycle — data to insight to impact — creates a reinforcing loop clearly highlighting strategic intent and social value.

As management teachers Bryan Husted and David Bruce Allen emphasise, competitive advantage flows from social initiatives built around a firm’s unique capability for stakeholder engagement developed using AI and CSR data. And Bill Gates recent prediction on sectors like healthcare and education, where AI makes intelligence available for free in future, the entire competitive advantage of companies may lie in CSR driven intent, trust, and ethics.

The most compelling CSR strategies are those that are deeply embedded in a company’s mission and culture. They emerge not just from mandates, but from values. They are implemented not by standalone CSR teams, but by cross-functional collaboration — from HR and legal to operations and technology. In this sense, CSR becomes integral to an operating system, not a standalone statutory requirement.

From a governance standpoint, this integration opens up new strategic thinking. Forward-looking companies are now embedding CSR metrics into board KPIs, aligning ESG targets with investor expectations, and using impact dashboards to track community outcomes. With policy instruments like India’s Social Stock Exchange, the future is nudging CSR from storytelling to expressing a company’s strategic intent.

In that future, companies won’t be asked “how much did you spend on CSR?” but “what systems did you change to make greater social impact?” Social media can play a significant role of amplifying the achievements. Hence in the age of AI, companies through their CSR activities may hope to create unique strategic intent for sustainable competitive advantage.

Mitra is Professor, and Saxena is an MBA from IIM Kozhikode

Published on July 1, 2025