Corporate Social Responsibility

3rd April, 2024

Practices, Issues & Challenges

Vinod Pande
 What Employees Think of CSR

CSR! Is that really for

me? I’m an iBanker/IT
Executive. Have lot of
business to do!

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 What is CSR
Corporate Social Responsibility is the
continuing commitment by businesses to
behave ethically and contribute to the
economic development while improving
the quality of life of the workforce and
their families as well as of the local
community and the society at large

- World Business Council for Sustainable Development

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 What is CSR

CORPORATE SOCIAL RESPONSIBILITY

The responsibility of business towards

the society
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 CSR – A Game Changer

INDIA IS ONE OF THE FIRST COUNTRIES TO

FORMULATE A LEGAL FRAMEWORK ON
CORPORATE SOCIAL RESPONSIBILITY (CSR)
THE CONCEPT OF CSR WAS STARTED IN INDIA
FROM THE PRINCIPLES OF “TRUSTEESHIP” AND
“GIVING BACK TO SOCIETY”.
AS INDIA’S ECONOMIC PRIDE SHRI RATAN TATA
OBSERVES THAT “BUSINESSES SHOULD GO
BEYOND THE INTERESTS OF THEIR COMPANIES
TO THE COMMUNITY THEY SERVE”.
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 CSR PROVISIONS of the COMPANIES ACT

SECTION 135 of the Act

1) Every company having a net worth of rupees 500 crore or
more or a turnover of rupees 1,000 crore or more , or a
net profit of rupees 5 crore or more during any financial
year, shall constitute a Corporate Social Responsibility
Committee (CSR Committee) of the Board consisting of
three or more directors, out of which at least one
director shall be an independent director;
2) The Board's report shall disclose the composition of the
Corporate Social Responsibility Committee 6
 Section 135 – Contd.
3) The CSR Committee shall,

a. formulate and recommend to the Board, a

Corporate Social Responsibility Policy (CSR
Policy) which shall indicate the activities to be
undertaken by the company as specified in
Schedule VII;

b. recommend the amount of expenditure to be

incurred on the activities referred to in clause (a);
and

c. monitor the Corporate Social Responsibility Policy

of the company from time to time. 7
 Section 135 - Contd.
4) The Board of every company shall,

a) After taking into account the recommendations

made by the CSR Committee, approve the CSR
Policy for the company and disclose the contents
of such Policy in its report and also place it on the
company's website, if any, in such manner as may
be prescribed; and
b) ensure that the activities as are included in CSR
Policy of the company are undertaken by the
company.

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 Section 135 – Contd.

5) The Board of every company referred to in sub-section

(1), shall ensure that the company spends, in every
financial year, at least two per cent of the average net
profits of the company made during the three
immediately preceding financial years, in pursuance of
its CSR Policy.

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 Schedule VII
Activities which may be included by companies in
their Corporate Social Responsibility Policies:

(i) eradicating hunger, poverty and malnutrition;

promoting preventive health care and sanitation
and making available safe drinking water;

(ii) promoting education, including special

education and employment enhancing
vocational skills especially among children,
women, elderly, and the differently abled and
livelihood enhancement projects;

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 Schedule VII – Contd.

(iii) promoting gender equality and empowering women,

setting up homes and hostels for women and orphans;
setting up old age homes, day care centers and such
other facilities for senior citizens and measures for
reducing inequalities faced by socially and
economically backward groups;

(iv) Ensuring environmental sustainability, ecological

balance, protection of flora and fauna, animal welfare,
agroforestry, conservation of natural resources and
maintaining quality of soil, air and water;

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 Schedule VII – Contd.

(V) Protection of national heritage, art and culture

including restoration of building and sites of historical
importance and works of art; setting up public libraries;
promotion and development of traditional arts and
handicrafts;

(vi)measures for the benefit of armed forces veterans, war

widows and their dependents;

(vii) training to promote rural sports, nationally recognized

sports, Paralympic sports and Olympic sports;

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 Schedule VII – Contd.
viii) contribution to the Prime Minister’s National
Relief Fund or any other fund set up by the Central
Government for socio-economic development and
relief and welfare of the Scheduled Castes, the
Scheduled Tribes, other backward classes,
minorities and women;
(ix) contributions or funds provided to technology
incubators located within academic institutions
which are approved by the Central Government;

(x) rural development projects.

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 CSR Practices
CSR PRACTICES HAVE COME A LONG WAY SINCE THE
CSR ACT MADE IT MANDATORY FOR ALL CORPORATES
PRIOR TO THE ACT THERE WERE CERTAIN CORPORATES
LIKE THE TATA’S OR EVEN SBI WHO WERE IN ANY CASE
INVOLVED IN SOCIAL WORK AMONG THE COMMUNITY
THEY OPERATED IN.
IN FACT I’VE SEEN TISCO’S SOCIAL WORK IN
JAMSHEDPUR & SBI’S WORK IN BIHAR.
SBI, WHICH I JOINED IN 1980, DID SOCIAL WORK
THROUGH ITS BRANCHES OR THROUGH THE WIVES OF
THE SENIOR OFFICIALS WHO FORMED A MAHILA SAMITI
IN EACH STATE, WHO DID SOCIAL WORK. THERE WAS NO
CSR ACT THEN. 14
 CSR Practices

SOME OF THE MAJOR PRACTICES OR AREAS IN WHICH

LARGER CORPORATES WORK IN ARE
• REDUCING THE CARBON FOOTPRINT – EXTREMELY IMP.
• ENGAGING IN CHARITY WORK AMONG THE COMMUNITY
THEY OPERATE IN.
• INVESTING IN ENVIRONMENTALLY CONSCIOUS
BUSINESSES.
• GETTING INVOLVED IN VOLUNTEER WORK INCLUDING
INVOLVING THEIR EMPLOYEES IN SOCIAL WORK.
• TAKING ENVIRONMENTAL FRIENDLY AND SUSTAINABLE
INITIATIVES
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 CSR Challenges

AFTER THE APPROVAL OF THE ACT, IT WAS INITIALLY A BIG

CHALLENGE FOR THE CORPORATES TO IMPLEMENT IT.
THE REASONS WERE THAT MOST OF THEM WERE NOT SURE ON

HOW TO SPEND THE AMOUNT

WHERE TO SPEND IT
HOW TO ENSURE THE NGOS THEY DECIDE TO GIVE THE
MONEY TO ARE TRUSTWORTHY ENOUGH & WILL UTILISE IT
FOR THE PURPOSE DEFINED
IMPACT ASSESSMENT WAS INITIALLY NOT SOMETHING THAT
CORPORATES DID
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 CSR Challenges

TO MEET THE INITIAL CHALLENGES THAT THE

CORPORATES FACED IN IMPLEMENTING THE ACT, THE
ACT ITSELF PROVIDED OPTIONS AND OPPORTUNITIES.
THE BEST PART OF THE ACT WAS TO ENSURE CERTAIN
GUIDELINES WERE ISSUED, WHICH COULD BE
FOLLOWED.
SCHEDULE VII OF THE ACT GAVE A LIST OF ACTIVITIES
WHICH WERE PERMITTED TO BE DONE AS PER THE ACT.
THIS ENSURED THAT ANY COMPANY WHICH WAS
ELIGIBLE OR MANDATED TO DO CSR ACTIVITIES AS PER
THE ACT HAD NO CONFUSION.
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 CSR Challenges
How the Challenges Were Met
• Corporates are now aware of the importance of CSR
• They now realise that :

• CSR is about corporate citizenship

• It is about giving back to the society
• It is about business sustainability
• It is about thriving in a competitive business
environment

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 Benefits of CSR
Legislati

Winning new
s
fit

businesses
ne

Increase in Enhanced
Be

Relationship with
customer retention
stakeholders

Saving money Attracting,

on energy and
operating cost
Benefits Retaining and
Maintaining a happy

of CSR workforce

Differentiating
yourself from the
competitor Media interest
and good

s
reputation

fit
Enhancing your

ne
influence in the industry Access to funding

Be
opportunities

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 CSR Practices, Issues & Challenges
Practices :
Since now CSR is mandatory, almost all eligible corporates contribute
2% of their average Net Profit over the past 3 years for the social good.
So – every corporate practices social good
Issues :
There used to be issues on doing CSR, as mandated by the
Government, mostly in finding the right activity, the right NGO, the
correct location for doing the act of social good. But over the years a
number of reliable NGOs have come up who are doing good work.
Therefore, the issues of where to do, what to do, through whom & for
whom to do are more or less resolved.
Challenges:
There still are certain challenges.more in the nature of decision
making. What my experience is that most corporates go by the views of
the CEO, not by the professional advise of the CSR team. But that is
almost taken care of now. That is because every corporate now wants
to be seen as doing good. So the challenges are almost taken care of!

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 Sustainability Tips

• Go paperless, pay bills online. Do not take a receipt or card

payments. Just check the merchants receipt. You get an sms
anyway.
• Use Olx or Quikr to sell used products
• Use BluSmart more than Ola & Uber
• Donate old clothes
• Avoid plastics, plant a tree
• Give food leftovers to a needy person
• Use led lamps, switch off lights when not in use
• Save water, take a bucket bath, shut the tap while
brushing/shaving
 To quote J R D Tata –
“I do not want India to be an
economic superpower. I want India
to be a happy country”.
 CSR -
The Act of Giving for
Over TEN Years

​“We don’t inherit the Earth from our ancestors, we borrow

it from our children.
We should, therefore, leave it in a condition they deserve”