Unlocking CSR potential for maximum impact could have been the key after completion of 4 years of CSR Act, but there were no takers for thousand crores worth of CSR funds in 2018. While India needs investing for impact, some greater synergies lie unapped, the reason being unawareness to various concerns in our society. Both CSR and sustainability reflect the need for aligning the business goals with the need for society. 2018 proved to be an active year in Corporate Social Responsibility, CSR with issues related to sustainability, globalization, advocacy on social issues and multiple natural disasters in the forefront. Some of these issues and CSR trends will continue into 2019, but leaders should expect to see the following noteworthy changes:
Fewer stands, more dialogue. More disaster relief, than prevention.
The new Companies Act of 2013 mandates publicly traded companies with Rs 100 crore in annual profit or Rs 500 crore in annual turnover to set aside 2 percent of their profits for affirmative/inclusive social action. Only half of the 1,708 companies listed on NSE have a CSR committee in place despite the CSR Act mandating the same. However, the overall spends by the 1,080 NSE-listed companies who fall under the 2 percent mandatory CSR spend category rose 11 percent in fiscal 2018 to Rs 10,030 crore from Rs 9,060 crore in the previous year.
In the past four years since the introduction of the mandatory CSR spends, the spending by the NSE-listed companies has grown at a compounded rate of 16 percent per annum. It said inequalities reduction, national heritage, the Armed forces, sports, technology incubators and slum development were the most neglected areas when it comes to corporates choosing for their CSR spends.
The spending list was topped by education sector at Rs 3,817 crore and followed by healthcare which saw inflows of Rs 2,509 crore, it said. The top companies in the list of spenders were led by Reliance Industries at Rs 745 crore, followed by ONGC (Rs 503.44 crore), TCS (Rs 400 crore and HDFC Bank (Rs 374.54 crore), it said.
The total number of companies which missed the mandatory 2 percent CSR spend target came down to 345 in FY18 from 361 in the previous year, it said. Maharashtra topped the list of states receiving the largest amount of money for CSR, followed by Gujarat and Rajasthan, while eight states saw a decline in spends. Well, it is a sign that things are changing in the CSR scene in India and yet thousands of crores of CSR funds remain unspent in 2018!
This article has been contributed by SUBAH, an enabler of CSR in India.
Subah is creating a diverse community of conscious stakeholders, groups & citizens who advocate innovative and cognizant solutions to achieve social purposes. Subah renders information, advisory and consultative services on CSR in India to industry, businesses and the government. Connect with them at SubahTeam@gmail.com.