Csr Mandat 3
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Transcript of Csr Mandat 3
April 27, 2023 1
CSR MandateIndia
“Era of Command and Control"
PRESENTATION FLOW
CSR- EVOLUTION AND UNDERSTANDING
CSR MANDATE
CSR FRAMEWORK
CSR- EVOLUTION AND UNDERSTANDING
Integrated CSR into a sustainable business
strategy
Industrialization had an influential effect on CSR
First PhaseTill 1850s
Second Phase1900s to 1980s
Third PhasePresent
Culture, religion, family values and tradition
“Era of Command and Control"
CSR is a way of conducting business, by which corporate entities visibly contribute to the social good.
CSR EVOLUTION IN INDIA
CSR - UNDERSTANDING
CSR AS VALUE CREATION
CSR AS PHILANTHROPY
Innovation, Sustainable business models
Compliance with legislations
Contribute with money and knowledge
Fundamental strategic and operational impact
Medium to High Operational Cost
Little Strategic or Operational Effect
CSR AS RISK
MANAGEMENT
Three Different Understanding of CSR
CSR MANDATE
Clause 135 of the Companies Bill (the “CSR Clause”) requires a qualifying
corporation to spend on CSR at least 2 percent of its average net profits made in the preceding three financial years..
Bill is applicable to any company with...
A net worth of rupees 500 crore
A turnover of rupees 1000 crore
A net profit of rupees 5 crore
or more in any fiscal year
CSR MANDATE – COMPANY BILL 2013
WHAT ACCOUNTS AS CSR?
Eradicating Hunger
Promotion of Education
Gender Equality and Empowering Women
Reducing child mortality and improving maternal health
Combating human (IMV)immunodeficiency virus,
other diseases
Ensuring Environmental Sustainability
Employment Enhancing Vocational Skills
Social Business Projects
Contribution to the Prime Ministers National Relief Fund
Such other Matters as may be prescribed
CSR MANDATE – POSITIVE IMPACT
Business can contribute to equitable and sustainable
economic development..
ONE-THIRD of the population is illiterate
TWO-THIRD lack access to proper sanitation
MILLIONS OF PEOPLE
still live on less than RS 100 a day.
CSR MANDATE – NEGATIVE IMPACT
Indian companies still equate CSR with CORPORATE
PHILANTHROPY
Companies may treat it as a “CHECK THE BOX”
exercise rather than looking at ways to doing social and
environmental good.
Companies will comply by CHANNELING
FUNDS to community organizations.
Effort to meet the spending obligations, companies may
not do the right
WHERE INDIAN COMPANY STANDS?
Company Revenue Avg Profit after
Tax
Actual Spent - CSR
2% of PAT
Indian Oil 442,459 7,783 83 156
Reliance Industries 368,571 21,138 288 423
Tata Steel 135,978 3,895 146 78
TCS 48,894 8,935 51 179
Grasim Industries 27,899 3,395 16 68
Cairn India 11,861 5,108 NA 102
HDFC Bank 27,606 4,108 NA 82
Oil India 17,215 2,988 50 60
Infosys 33,734 7,128 26 143Source: Forbes India magazine of 22 March, 2013
Comparative Analysis on how much Indian firms are spending on CSR currently.
INDIA’S TOP 100 COMPANIES 2% of PAT – 5611 Crores
Actual Spent – 1765 Crores
CSR FRAMEWORK
EffectiveCSR
FRAMEWORK – CSR
Aligned with
Business Objectives
Sustainable
Compliance with
Company Bill Act
Result Oriented Scalable
Brand Visibility Social Capital Partnerships & Relationships
Business Opportunities Nation Building
PROCEDURE TO COMPANY
“CSR Committee”
Create ““Corporate Social
Responsibility Policy”
Develop
“CSR Initiatives to be Reported”
Report “Two percent of net
profit”
Allocate
*The two percent CSR spending needs to be computed as two percent of the average net profits made by the company during every block of three years.