India: CSR spending increased, but more needs to be done

The Companies Act, 2013, requires companies above a certain financial threshold to spend at least two per cent of their average net profit of the preceding three years on CSR. Although CSR spending is compulsory, the Act has taken a ‘comply or explain’ approach, where a company has to provide reasons if the spending is less than the stipulated amount. Spending on activities by the top 100 increased to Rs 5,240 crore in 2014-15. The figure had stood at Rs 3,000 crore in 2012-13, when CSR spending was voluntary. Although the increase looks healthy, Institutional Investor Advisory Services (IiAS), the corporate governance consultancy that has compiled these numbers, points out that the figure, at Rs 5,240 crore, was actually 26 per cent lower than the amount indicated in the law. This underlines the largely pro forma approach to CSR spending, and its limited utility as a means of promoting awareness of social responsibility in the corporate world.

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Article
10 January 2016

Most of top listed firms fail to meet minimum CSR spending

Author: Amrita Pillay, Livemint

Most of India’s top listed firms did not manage to meet the minimum spending requirement on corporate social responsibility (CSR) as laid down in the New Companies Act 2013, even though aggregate CSR spending was high as some of them spent more than the mandated amount...About 32 of the Nifty 50 companies have missed this target, according to data compiled by CimplyFive Corporate Secretarial Services Pvt. Ltd, a firm provides services and technology to improve regulatory compliance across firms.

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Article
9 January 2016

Mandating CSR spending won't help

Author: Business Standard

If CSR could substitute for state action, Gates Foundation would have transformed Bihar...The inclusion of CSR spending in the Companies Act suggests a basic misunderstanding of the role of corporate activity in an economy. Corporate activity cannot be a substitute or proxy for the government in enhancing human development indicators. One obvious reason is scale: No company, no matter how large and open-handed, can match the spread or penetration of a government - particularly in India. Had this been the case, the Gates Foundation, for example, with its awesome financial outlays and admirable programmes, could well have transformed Bihar, its focus area for many years, into a model of health, hygiene and sanitation. That apart, few corporate groups, oriented by their nature to profit, are interested in social spending as an end in itself. For the most part, large manufacturing companies tend to confine their CSR activities to the ambit of their operations.

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Article
4 January 2016

In FY15, India Inc took to social causes in a big way

Author: Business Standard

The move to make corporate social responsibility (CSR) spending mandatory has resulted in a spurt in social spending by India Inc. Spending on activities by top 100 increased to Rs 5,240 crore in 2014-15. The figure stood at Rs 3,000 crore in 2012-13, when CSR spending was voluntary. Corporate governance firm Institutional Investor Advisory Services projects spending will increase to Rs 8,500 crore in the current financial year...According to IiAS, CSR spends in were around 26 per cent lower than the prescribed amount.

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Article
4 January 2016

Linking CSR with business practices

Author: Kelly Scharff & Sarah Berman , Gateway House

CSR in India has been detached from business practices. A more effective approach to CSR would entail efforts to integrate sustainable business with societal giving, rather than simply requiring companies to donate money and outsource all of its CSR efforts.

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Article
21 December 2015

India: Listed firms spent Rs.6,400 cr in 2014-15 on CSR, reports Confederation of Indian Industry

Author: SME Times

Over 1,000 Bombay Stock Exchange (BSE)-listed companies together spent Rs.6,400 crore towards corporate social responsibility (CSR) activities last fiscal, the Confederation of Indian Industry (CII)...Over 90 percent of 1,181 companies in a survey complied with the CSR norms and "around Rs.6,400 crore has been spent" in the last fiscal, according to a CII-ITC Centre of Excellence for Sustainable Development report...Almost 55 percent of that has been channelled to education, skills, livelihoods, health and sanitation," it said...According to the report, 87 percent of the eligible listed companies have actually spent on CSR but 52 percent shelled out less than two percent as required...The reasons for spending less are projects being multi-year, or the inability to find the right projects or implementing agencies, it added.


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Article
22 November 2015

India: Healthcare to Swachh Bharat, how firms spent CSR funds

Author: Sandeep Singh & Shruti Srivastava, Indian Express

Forced to spend a portion of their profits on activities linked to corporate social responsibility (CSR) to meet the requirements of the Companies Act 2013, India’s top 50 companies that make up the benchmark Nifty index at the National Stock Exchange claim to have spent over Rs 4,600 crore in the financial year ended March 2015 on social initiatives. Healthcare, education, environment and Swachh Bharat initiative dominated the sectors where money was spent by these companies...

Article
9 August 2015

India: Health, education get Gujarat companies' 90% CSR spend

Author: Kalpesh Damor, Times News Network

Gujarat-based companies choose health and education when it comes to corporate social responsibility (CSR) programmes. These two sectors account for around 90% of the amount spent on CSR...In fiscal 2014-15, health and education topped the list of several Gujarati companies such as Adani Port and SEZ Ltd (APSEZ), Cadila Healthcare, Torrent Power, Cera Sanitaryware Ltd and Atul Ltd...As per the Companies Act, 2013 all companies are required to spend at least 2% of the average net profits on CSR — fiscal 2014-15 was the first year of implementation...ndustry experts, however, are divided over making CSR mandatory. Some believe that regulation (with regard to CSR) is not a good for corporate firms and it is better to keep it voluntary.

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Article
19 May 2015

Institute of Chartered Accountants of India issues norms for CSR accounting by cos

Author: Lubna Kably, Times of India

The  Institute of Chartered Accountants of India ( ICAI) recently issued a guidance note which will help  India Inc in accounting for its  corporate social responsibility (CSR) expenses...To ensure transparent financial reporting, this guidance note requires the company to debit (charge) its profit and loss account (P&L a/c) with the CSR expenses incurred by it during the year. Further, such expenses are to be shown as a separate line item in the P&L a/c...According to government sources, the financial statements of a company, including notes to the accounts and the director's reports, will help keep track of the CSR spending by India Inc. Currently, there is no penalty imposed for not complying with these norms — only a disclosure is required in the director's report.

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Article
13 May 2015

State Bank of India to launch company for CSR push

Author: Sangita Mehta, Economic Times

State Bank of India (SBI) will soon launch SBI Foundation, a company that will undertake activities pertaining to corporate social responsibility (CSR) on behalf of the group. The bank has received approval from the Reserve Bank of India for setting up the company, which is likely to be launched on July 1, the foundation day of the bank...The SBI Foundation will essentially focus on skill development, women's empowerment, sanitation and education," said Vinod Pande, chief general manager at SBI in charge of CSR.  

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Article
31 March 2015

Setting The Compass For CSR In India: 5 Key Directions

Author: Amitangshu Acharya, Huffington Post

...[T]he Government of India passed the Companies Act, 2013 and made it mandatory for businesses above a certain profit margin to engage with Corporate Social Responsibility (CSR)...Demanding miracles from CSR units in such early years is unrealistic. However, fascinating insights and challenges are emerging in its infancy...Rethinking hyperlocalisation of CSR spends...The second concern is an emerging CSR fetish for investing in tangible products and assets....Thirdly, there is an unwritten rule that the CSR compass should always point to the magnetic North of government agenda....One key challenge that CSR units have faced over the last year has been to identify and work with NGOs in India....Finally, if CSR seeks to make a difference, egos and logos will have to take a backseat. There are enough anecdotes on how efforts to bring together different CSR units on a common cause often fall through, as branding dilutions are ill afforded.

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