Corporate Social Responsibility is not a new concept in India, however, the Ministry of Corporate Affairs, Government of India, has recently notified the Section 135 of the Companies Act, 2013 along with Companies (Corporate Social Responsibility Policy) Rules, 2014 “hereinafter CSR Rules” and other notifications related thereto which makes it mandatory (with effect from 1st April, 2014) for certain companies who fulfil the criteria as mentioned under Sub Section 1 of Section 135 to comply with the provisions relevant to Corporate Social Responsibility
As mentioned by United Nations Industrial Development Organization (UNIDO), CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple – Bottom – Line – Approach”), while at the same time addressing the expectations of shareholders and stakeholders.
While proposing the Corporate Social Responsibility Rules under Section 135 of the Companies Act, 2013, the Chairman of the CSR Committee mentioned the Guiding Principle as follows:
“CSR is the process by which an organization thinks about and evolves its relationships with stakeholders for the common good, and demonstrates its commitment in this regard by adoption of appropriate business processes and strategies. Thus CSR is not charity or mere donations. CSR is a way of conducting business, by which corporate entities visibly contribute to the social good. Socially responsible companies do not limit themselves to using resources to engage in activities that increase only their profits. They use CSR to integrate economic, environmental and social objectives with the company’s operations and growth.”
As per regulations of the Companies Act 2013, companies having a net worth of Rs 500 crore or more or a turnover in excess of Rs 1,000 crore or net profits of Rs 5 crore or more are required to mandatorily spend 2% of their profits on CSR programmes.
Finance Minister Arun Jaitley in a recent speech at a CSR event of Axis Bank said that corporate social responsibility spending by large business houses could go up to Rs 14,000 crore, giving a boost to the government’s social sector initiatives. “Now, over the last three to four years that we have seen it function…if you look at India’s large corporates with profitability of Rs 500 crore and above, you have a potential of about Rs 14,000 crore of CSR activities,” he said. Citing some of the examples, Jaitley said corporates can take up jobs in difficult terrain.
Rs 14,000 crore makes a significant amount if added to the government’s initiative towards social sector, he said, adding that this is the amount which is going to increase annually. He exhorted companies to take up challenging areas for spending their CSR fund.
When the CSR clause was put in the Companies Bill, there was opposition from the corporate. Some provisions were diluted and a few dispensations were given for special reasons when the bill was before the House.
CSR spending in India…
The corporate social responsibility movement began as a response to advocacy for corporations to play a role in ameliorating social problems due to their economic power and overarching presence in daily life. Governments of different companies are now modifying their laissez faire approach and considering legal rules.
The US Securities and Exchange Commission, for instance, has moved beyond its mandate as a market regulator to issue rules on conflict minerals, resource extraction payments and gender diversity. And, in 2014, the European Union issued a directive on disclosure of non-financial and diversity information. Similarly, Australian companies are required to disclose how they will manage their environmental and social sustainability risks.
A study by professional services firm KPMG showed that India’s top tier companies’ allocation of Rs 7,300 crore in fiscal 2016 to corporate social responsibility initiatives exceeded regulatory requirements.
Actual spends on CSR activities by Nifty 100 companies that the KPMG survey included were more than Rs 6,500 crore for financial year 2016 versus a little over Rs 5,000 crore a year ago. Research showed that India Inc had been slow to warm up to new rules on corporate social responsibility (CSR) spending, with only 14 Nifty companies managing to spend the mandatory 2% of net profit towards social causes in FY15.
As per Ministry of Corporate Affairs data, around 5,097 companies in India has invested corporate social responsibility (CSR) spend of Rs 9,822 crore for FY 2015-16 vis-a-vis 7,334 companies spending around Rs 8,803 crore for FY 2014-15. In FY 2015-16, the CSR spend has seen a jump of 11.6 percent thanks to strict compliance of CSR budget by corporate entities.
In terms of vertical, the Top 5 sector contributes round 87% of the total expenditure. The top sectors in CSR are: Health/Eradicating Hunger/Poverty and Malnutrition/Safe Drinking Water/Sanitation; Education/Differently Enabled/Livelihood; Rural Development; Environment/Animal Welfare/Conservation of Resources and Swachh Bharat Kosh.
CSR spending by IT corporate…
The Fujitsu Group is member of the United Nations Global Compact. By upholding the Global Compact’s ten principles in the four areas of human rights, labor, environment and anti-corruption, as well as actively implementing corporate social responsibility (CSR) initiatives, Fujitsu is promoting responsible management as a global company while contributing to the building of a sustainable society
“Fujitsu India believes that a large transformation is underway as people and companies seek innovation in country. To lead the growth of the world economy, the younger generation is tasked with generating innovation by starting new enterprises and transforming existing companies. Fujitsu India is identifying individuals every year who have
a. Capability to act quickly to environmental change
b. Capability to identify a social good and ensuring its realization
c. Capability to innovate
d. Capability to connect local and global knowledge
e. Capability to distribute leadership in an organization
And sponsoring them for a free scholarship program in multi campus environment where the selected participants will visit four countries; Japan, Hawaii, Singapore and Thailand. We had minimum 2 participants selected from India every year for last 4 years and post the scholarship program the candidate have published articles as well,” says Santhosh NS, Head of Marketing & Communications – Fujitsu.
Dell EMC’s CSR initiatives adhere to a larger global framework known as the 2020 Legacy of Good goals which outlines Dell’s long-term commitment to society, team members and the environment. “We report our progress towards achieving these goals on a yearly basis and this year we reported the first 2020 Legacy of Good update that recognizes key CSR achievements for the combined company following Dell’s merger with EMC. Some key highlights include contribution of over 1,05,000 hours of volunteer time by the India team members, engaging with 1,175 non-profits working in the areas of education, environment sustainability, women empowerment, people with disabilities etc. In total, the Dell India team members have volunteered 4.5 Lakh hours of their time since 2013-14. Our work done as part of the Dell Youth Learning program is also noteworthy – we engaged with a broad spectrum of 13 non-profits to use Dell – technologies and expertise to improve learning outcomes in government schools, impart digital literacy skills, increase curiosity and foster innovation, develop life skills and provide environment and civics related education to underserved youth. With our support, these partners collectively reached out to 1.86 Lakh youth directly and 1.26 Lakh youth and community members indirectly. On the environment front, at the end of FY17, 97% of our Delloperated facilities in India had at least one active sustainability initiative in one or more of our eligible categories: equipment or building upgrades, renewable energy use, on-site services, water conservation, and employee engagement,” states Srihari Palangala, Director, Marketing, India – Dell EMC.
He continues further, “These are only a few of the many initiatives that we achieved in FY 17 to demonstrate how we have built on our strengths and use technology to make a positive impact.”
Bhaskar Choudhuri, Director- Marketing, Lenovo India states “I strongly believe that CSR can be strongly woven into a brand’s inherent persona, and it is the CMO’s responsibility to integrate topicality and CSR into a marketing campaign. Our most recent #giftthembelief campaign takes an emotional message to parents with kids who are writing exams. There is tremendous pressure on students to perform well and secure exceptional scores to make the cut for their choice of college. Unfortunately, the majority of students don’t manage to get in their choice of college. Through this film, we urge parents to support their children through this challenging phase and give them what they need most – the belief that there is a world full of opportunities and technology can enable one to seize these opportunities. Lenovo has always believed in the power of contextual story-telling to influence mindsets and the response we’ve got to this film is a testimony to our endeavour.”
NetApp firmly believes in giving back to the society and encourages every employee to take some time off to volunteer for several social initiatives. “Our CSR focus covers a range of issues- from working with the disabled, to providing food regularly to the under privileged, our organization and employees are out there making a difference every day,” asserts Parag Amalnerkar, Marketing Leader, India & South Pacific – NetApp.
LG on its part has a remarkable record when it comes to initiating CSR campaigns with a difference. “Our CSR campaigns have always gotten an overwhelming response from the consumers. We aim to partner with them to bring hopes and happiness into the lives of fellow Indians. Some of our leading CSR initiatives are the #Kar Salaam Campaign, which was a unique endeavour to reach out to our brave Armed Forces. The citizens participated in this campaign to express their gratitude to the soldiers and sent in their good wishes to them, for which LG broke the Guinness World Records. The campaign also included a donation of 1 crore INR to the CRPF Welfare Fund. This campaign is very close to LG and was truly one of its kind in India,” says Amit Gujral, Chief Marketing Officer – LG Electronics India
LG’s The Hunger Free India Campaign is a renewed approach towards fighting the menace of hunger and food wastage in the country. It will bring hope to the hungry and a more food secure India, and set an example that must be followed by our youth.
LG extended the brand’s commitment to the environment by launching a massive Tree Plantation Drive across 41 Indian cities in association with various NGO’s, schools, institutes and colleges. All the employees along with the senior management and LG customers planted 20,000 trees across multiple cities and took the pledge to protect the environment and make eco-friendly choices to contribute to a greener world. With this activity, LG once again reinforced its commitment towards maintaining a cleaner and greener environment.
“LG has a practice to grow in a socially and environmentally responsible way and ensure that development is sustainable in nature. LG is dedicated to this cause with a line of energy efficient products in place, that comprise of the unique inverter technology for home appliances like Air conditioners, Refrigerators, Washing Machines etc., and we shall continue to serve society by bring Health and Hygiene conscious products which in-turn conserve energy as well and directly protect the environment via reduced electricity consumptions and surely save money for consumers. In short, it’s Life’s Good with LG for our consumers and environment,” says Amit.
“At CtrlS, we strongly believe in giving back to society. Our CSR initiatives are focused on serving the under privileged (bottom of the pyramid) and rural youth skill enhancement. CtrlS CSR Core Committee oversees the initiatives and a passionate team of volunteers work earnestly in helping us achieve our CSR Goals and impact the society in the desired manner,” says B S Rao, VP – Marketing, CtrlS Datacenters.
Netmagic has been assisting several NGOs working for various social causes, by offering them hosting services at a zero-profit fee. “We have been a certain amount of budget earmarked for all our CSR activities. Our key target through these efforts is to create a deeper and sustainable societal impact with better education –
• We support ‘Teach for India’, that is, part of global ‘Teach for All’ network – they recruit promising college graduates and high performing young professionals to serve as full-time teachers in low-income schools for two years.
• A portion of our CSR deployable funds go to Nanhi Kali NGO which facilitates education for underprivileged girl children in India.
• Sponsor CRY initiatives
• Helping in the education of underprivileged children
• River rejuvenation project in India,” says Prasenjit Roy, Senior Vice President & Chief Marketing Officer – Netmagic (An NTT Communications Company).
“A brand is a part of the larger ecosystem it operates in a manner which includes the larger community,” says Bidisha Nagaraj, Chief Marketing Officer – Schneider Electric India. “This is the essence of our CSR initiatives that lies at the core of the Schneider Electric’s culture and strategy. Currently, we are doing a rural electrification program called, “Access to Energy”. Through this program, we have touched about 400 villages till date. With the strong willingness to involve local communities and local stakeholders, the programme addresses critical issues to provide sustainable access to electricity.”
Schneider Electric’s CSR projects are spread across skill development, teachers’ training, employment support, entrepreneurship development, rural electrification in off grid areas through green energy, Conserve my Planet programme which it runs among the schools in India to create green ambassadors.
But there are some companies that take up CSR activities but do not like to publicize them. Says Vishal Parekh, Marketing Director, Kingston Technology & HyperX – India, “We undertake several CSR programs which can do good for people, planet and better tomorrow. However, we do not publicize about it.”