CSR news digest – 001
Over 530 companies may face action for CSR norm violations
More than 530 firms have come under the scanner of the government for violating CSR spending norms under the companies law and are likely to face action. The violations pertain to the 2014-15 financial year and reports to this regard have been submitted by Registrar of Companies (RoCs) concerned to the Corporate Affairs Ministry, sources said.
Sources said more than 530 companies have violated the CSR norm as instances of “non-compliance” as well as “non-disclosure” have been
detected for the 2014-15 fiscal –which was also the first year of implementation of the norm. These companies are located in different states including Maharashtra, Odisha, Madhya Pradesh and Gujarat, sources added.
India Inc’s CSR spending rises 22% in FY16
India Inc spent 22% more money on corporate social responsibility-related activities in 2015-16.
Coimbatore: India Inc spent 22% more money on CSR(corporate social responsibility)-related activities in 2015-16 (fiscal 2016) with bulk of the money going into education, skills development, healthcare and sanitation initiatives.
In absolute terms, the total money spent rose by Rs 2,500 crore to Rs 8,300 crore in fiscal 2016, data compiled by ratings agency Crisil showed.
“A standout feature last fiscal was about focus shifting to CSR outcomes,” said Ashu Suyash, managing director and CEO, Crisil.
“There were two reasons for the 22 percentage point jump in adherence by the larger companies: one, they are overcoming the challenge of large-scale interventions, which takes more time and effort. And two, they are using implementing agencies, mainly non-governmental organisations, for execution,” Crisil stated.
HR department has to play a bigger role in CSR initiatives
It has to ensure greater involvement of employees
Another area in which HRM finds increased application is corporate social responsibility (CSR). As organisations are seeking to make their CSR activities more value-based and highlight their culture and vision, greater and more direct involvement of employees is required. Given this, the HR department has to drive CSR routines within their organizations.
Similarly, HR should design CSR initiatives in such a manner that they drive employee engagement. For the employees, these activities unite the organisational value system and the various aspects of their larger life.
By encouraging them to take ownership of these initiatives, the HR department can make them co-creators of the CSR value.
CSR for disabled people to get a boost from new law
With the passage of a new bill on people with disabilities in the winter session and the CSR rules already in place, companies will have more ways to deploy funds.
KickStart Cabs, a taxi service for people with reduced mobility, is part of the CSR projects of Mphasis.
The winter session of Parliament, which began on 16th November and ended on 16th December in 2016, failed to achieve much in terms of usual business, except perhaps the passage of the historic Rights of Persons with Disabilities Bill, 2016.
The Bill has revived many debates, including the one on the need to create inclusive infrastructure to facilitate greater independence among the differently-abled. One of the key players in this debate is the corporate sector which has engaged with the issue in a limited way so far—from token reservations for internal employment to working with differently-abled persons under the ambit of corporate social responsibility (CSR). The Bill is expected to increase corporate support for and engagement with the differently-abled.
Are CSR funds in education being used smartly?
The cause of education received the highest amount of CSR funding but all the money is not being used for academics and training.
New Delhi: The latest Annual Status of Education Report (ASER) published on Wednesday highlights the “pretty disappointing” overall learning levels in schools across India. Yet, the funds coming to education, especially from corporate social responsibility (CSR) budgets, are on the rise.
In FY16, education received the highest amount of CSR funding among all social development activities allowed under CSR Rules. According to Prime Database, a capital market data provider, 920 National Stock Exchange-listed companies together spent Rs2,042 crore on education, up from Rs 1,570 crore in FY15.
A closer study of the annual reports reveals the CSR funds classified as being spent on education are not exclusively going to education. For instance, some companies used the funds to construct toilets at schools
In FY16, education received the highest amount of CSR funding among all social development activities allowed under CSR Rules. Photo: Mint
under the Swachh Bharat mission, or to provide infrastructure and equipment. Funds used for such activities sometimes are grouped under ‘promoting education.’
“It is not enough just to build infrastructure. The government already does that. What we need is to supplement that infrastructure with quality education,” Jain of Dell Foundation said.
A different paradigm for CSR
Companies can contribute to social progress more effectively if they embed social issues in the business models
Several years ago Charles Handy wrote: “Companies that survive longest are the ones that work out what they uniquely can give to the world — not just growth or money but their excellence, their respect for others, or their ability to make people happy. Some call those things a soul”.
From time to time, chairmen of companies have talked about “doing well by doing good”, and sustainability updates are increasingly finding their place in annual reports. And yet, big issues affecting the well-being of the people and planet are not being addressed with the resolve and attention they deserve. This, despite the fact that we have enough knowledge to at least analyse, understand and address some of the more endemic social and environmental concerns of today.
Mandatory CSR, on the other hand, has created parallel structures in most companies, separating business and CSR teams, with the latter struggling to either identify right development partners or NGOs to “manage” CSR
programmes, or, worse still, running programmes on their own, in sectors where they neither have deep knowledge nor adequate experience. The basic flaw in separating CSR from what is (or, should be) corporate responsibility is that it ignores the core idea that business is a microcosm of society and must contribute to social progress even as it generates economic growth and employment.
In a discussion on business strategy for example, we would not expect pharmaceutical companies to diversify into primary school education, or car companies to diversify into healthcare, but when it comes to CSR, that is approximately where we end up! The irony is that the small CSR team feels really good about its contribution to improving some lives, whereas the business people miss the much bigger opportunities of improving significantly more lives and in a much larger context.
If business truly related to employees, it would take care of their well-being and not be exploitative by hiring contract workers, so they could be paid less than regular workers. If business truly related to its communities it would perhaps prioritise innovation on solving the needs of the poor, more than it has.
In conclusion, CSR must not substitute what companies should be doing anyway as part of socially responsible behaviour. And, if we are to live with the minimum 2 per cent target as currently defined, a bigger impact will be created, if the categories are reduced and made more specific; if CSR programmes emanate from the core competencies of respective companies; and if implementation encourages the formation of public-private partnerships to create systemic solutions for the delivery of social benefits.
6 CSR Trends To Watch In 2017
In the past decade, we’ve witnessed a stunning transition as corporate social responsibility (CSR) evolved from a nice-to-have silo to a fundamental strategic priority for businesses large and small. More recently, we’ve watched as companies went beyond their own walls, using their influence to advocate for global solutions around issues such as climate change, education, poverty, and equal and human rights.
Corporations stepping up as advocates and problem-solvers
Many executives believe that this growing commitment to sustainability and responsibility means we’ll see more corporations step up to address challenges outside the company.
A shift from “corporate social responsibility” to “social impact”
Indeed, the traditional frame of ‘Corporate Social Responsibility’ is beginning to give way to departments and senior executives with titles like ‘Social Impact,’ and I expect this trend to accelerate in 2017.
Study after study has shown that consumers and employees prefer to purchase from and work for companies that are invested in social and environmental responsibility. But getting customers to know about CSR programs – and make purchasing decisions that support those programs – isn’t always easy. Neither is making sure employees actually know what the company is doing from a CSR perspective.
Indeed. While 2017 may bring massive changes, the CSR community is optimistic about the continued leadership role business can and will play in driving social impact, changing consumer behavior and raising global standards. Here’s to a productive year.
Delhi airport wins award for CSR
The Delhi International Airport (Private) Limited (DIAL) has won the ‘Golden Peacock Award for Corporate Social Responsibility (CSR) in the transportation sector under the Aviation category for the year 2016.
“We are honoured to receive this prestigious award. The award reaffirms our unflinching commitment towards achieving exemplary results for our society while following the best practises,” said DIAL Chief Executive Officer I Prabhakara Rao.
Hyundai does its CSR bit for India, transforms third village
Korean carmaker Hyundai is making an impact in the interiors of India and how. The residents of Madhuramangalam village in Kancheepuram district of Tamil Nadu beamed with pride as Y K Koo, MD, Hyundai Motor India, handed over revamped and renovated facilities of the village, back to them.
This is the third village to have undergone transformation under the Hyundai Motor India Foundation (HMIF)’s Dream Village project.
HMIF, the Corporate Social Responsibility arm of Hyundai Motor India, has undertaken an ambitious plan to unleash the true potential of Indian villages by extending support in sprucing up infrastructure while training residents in income generation projects and creating employment opportunities to help them support themselves lifelong.
Y K Koo, MD, Hyundai Motor India, and other company staffers at the handover of the revamped Madhuramangalam village.
Dairy farming, quail and country chicken rearing and Ari embroidery have been taught to different groups as part of skill training and social enterprise. Nearly 84 families are expected to benefit from these initiatives. All these add up to strengthen our government’s move in setting up efficient infrastructure while laying a strong foundation for growth, development and self-sufficiency.
Since 2006, HMIF has undertaken a variety of sustainable projects, whose impact is now being felt. At least 217 schools and 110,000 students have benefitted with the benches and desks and almost 750 families now have clean sanitation facilities. HMIF has revamped sanitation facilities in over 48 village schools with 50 more on the anvil. The Go Green project has rejuvenated 171 hectares of arid lands till date in Kancheepuram, Thiruvallur and Vellore districts and has provided 240 marginalised farmers a sustainable livelihood, preventing their migration to cities for menial jobs.
Companies spent over Rs18,600 crore towards CSR in 2 years
In 2015-16, a total of 5,097 companies incurred a corporate social responsibility expenditure of Rs9,822.30 crore with private sector accounting for the major chunk.
Of the total amount, 4,925 private firms incurred CSR expenses of Rs6,462.10 crore while 172 public sector companies shelled out Rs3,360.20 crore, MoS for corporate affairs Arjun Ram Meghwal told the Lok Sabha. Photo: PTI
New Delhi: As many as 12,431 companies together shelled out more than Rs18,625 crore towards social welfare activities in the last two financial years, the government said on Friday.
In 2015-16, a total of 5,097 companies incurred a CSR expenditure of Rs9,822.30 crore with private sector entities accounting for the major chunk. Of the total amount, 4,925 private firms incurred CSR expenses of Rs6,462.10 crore while 172 public sector companies shelled out Rs3,360.20 crore, minister of state for corporate affairs Arjun Ram Meghwal told the Lok Sabha.
According to the written reply, 7,334 companies spent a total of Rs8,803 crore towards CSR works in the 2014-15 financial year. While 7,108 private companies saw an expenditure of Rs6,306 crore, as many as 226 public sector undertakings spent Rs2,497 crore.