CSR Landscape

Meena Galliara

NMIMS

Legal Mandate: Applicable from April1, 2014

Eligibility

GovernanceContribution & Disclosure

Companies meeting any one or more of the following conditions*:‐Sales ≥ INR 1000 Cr ‐Net worth ≥ INR 500 Cr ‐Net Profit ≥ INR 5 Cr

Appoint CSR Committee, Area of Operation & CSR policy- Define area of intervention

2% of average net profit before tax for last three financial years; Reporting of CSR; Explain reasons for not spending; Penalties for non disclosure

Journey so far…

CSR Portal : Jan 2018

CSR Spent

Source: RAJYA SABHA UNSTARRED QUESTION NO. 4031 ANSWERED ON TUESDAY, THE 3rd APRIL, 2018. Available on file:///C:/Users/Meena/Desktop/CSR%202016/CSR%20Rules/CSR%20Spent%20Rajya%20Sabha%20Disclosure%202018.pdf

According to the data from PRIME Database, while 1,019 listed companies spent amount to the tune of Rs 9,034 crore towards CSR in FY17.

• Of 6,286 companies, as many as 2,203 firms spent more than the prescribed amount towards CSR during April-November period of 2016-17

• 3,718 companies spent less than the required amount

• 346 firms did not spend any amount towards such activities.

CSR Spent: 2016-17

EDL: Education, Differently Abled and Livelihood

GWOR: Gender Equality, Women Empowerment, Old Age Homes, Reducing Inequalities

AOF: Any other Fund

EAC: Environment, Animal Welfare, Conservation of Resources

HAC: Heritage, Art & Culture

NEC: Not Mentioned

Maharashtra CSR Spent 2016-17

CSR Expenditure: Areas

CSR Expenditure 2016-17: Listed Companies

Education and vocational skills accounted for 37% of the total CSR spend

The spend has almost trebled from Rs 24.5 crore in 2015-16 to Rs 73 crore in 2016-17 for armed forces veterans, war widows and their dependents

18.6 % drop in 2016-17 on spent towards eradication of hunger and poverty, and promotion of healthcare and sanitation

Community development, infrastructure, social welfare, sports and slum development have also registered significant increases in CSR spends

Source: FE online ( March 5, 2018). India Inc CSR 2017-18: Education, environment and skill development gain priority, Available on https://www.financialexpress.com/industry/india-inc-csr-2017-18-education-environment-and-skill-

development-gain-priority/1087597/

Actions Taken

CSR FAQs on 12/1/16

Sensitizations workshops

CSR Data Portal 19/1/2018: Transparency and Accountability

Annual CSR Awards ( Large & Small Categories)

Disclosures 2014-17: Unspent amount should be transferred to designated Central Govt Funds Like PM Relief Fund, Swachh Bharat Kosh, Clean Ganga Fund

FAQs to be Revised

Proposal to set up E-centralized Scrutiny & Prosecution Mechanism (e-CSPM) by MCA

Appoint Inspectors & Consultants

196 companies: Notices

Report of the Legal Sub Committee on CSR 26/4/18

Actions Taken

CSPM was set up by the Ministry of Corporate Affairs in April 2018 to keep a tab on entities' compliance with CSR obligations.(CSPM) has been tasked to examine the records of top 1,000 companies obliged to spend on CSR.

The Registrar of Companies initiates action against non-compliant companies after due examination of records.

For 2014-15, prosecutions against 254 were sanctioned of which 33 companies have filed applications for compounding.

The government has issued preliminary notices to 272 companies for not complying with corporate social responsibility (CSR) spending requirements under the companies law.

Source: PTI. ( June 24, 2018). Govt issues preliminary notices to 272 companies for not com plying with CSR spending requirements. First Post. Available at https://www.firstpost.com/business/govt-issues-preliminary-notices-to-272-companies-for-not-complying-with-csr-spending-requirements-4808131.html

Need for Sensitivity

Boards are urged to think beyond the 2 percent which is required to be mandatorily spent and be far more sensitive to the ways and methods in which the contribution is made

Earn revenues in fair, humane, and sustainable ways

Corporate world also needs to understand that it is not just the increase in spending which is going to assure their commitment to support initiatives aimed at impacting lives

Implementing CSR with consistency and determination is the key to success and requires an impactful CSR strategy along with capable teams who understand the verve and challenges of working in social change

Case• One of the corporate company’s solution to open defecation was to

build functional toilets, especially for women. However, the company noticed that despite the construction and availability of toilets, women continued to defecate outside.

• The CSR team was frustrated and the management team moved on to the next project, stating that if the women didn’t want to help themselves, there was nothing they could do about it.

• What they didn’t realise was that these women were living in a society which was a very male-dominated, patriarchal society.

• The time they went to defecate outside was the only time they had freedom and could meet their friends, talk to them, and even lend/borrow money. Unless you realise these underlying forces in a society like gender, caste, inequality, discrimination, and poverty, the traditional business mind will draw very linear solutions.

Innovative Projects

Eram Solutions ties-up with TCS

CSR Box: Employee Engagement

Conclude

The landscape of CSR is transforming as a new breed of leaders are bringing new ideas to the table to help bring a difference to society

What was earlier viewed as just an NGO or a volunteering job is now getting transformed into an appropriate service sector

Companies are also realising the value in engaging their employees in the conception and implementation of CSR programmes

• Thanks