CSR in India: A Force for Environmental Responsibility or a PR Stunt?

India, as one of the largest and oldest democracies in the world, bears a major responsibility in tackling the growing issue of climate change. While the government can play a significant role in addressing this enormous challenge, it cannot do so alone. Private enterprises, with their greater access to financial resources, can contribute to this effort through their Corporate Social Responsibility (CSR) programs. Such contributions can be beneficial for both society and the companies involved.

Most of us will agree that Corporate Social Responsibility (CSR) is crucial in today’s economy to ensure future life and business sustainability. It is not just part of philanthropy or social service but the future business mode. India quickly understood the scope of CSR as it made laws to make it compulsory in 2013. Because of early initiatives, India has become the leading spender on CSR globally.

Recent Survey in India

CSRBOX, India’s leading CSR knowledge and impact intelligence-driven platform, has released its flagship research publication, the ‘India CSR Outlook Report’, for the 8th consecutive year. The report analyses the CSR spending of 301 large Indian companies in the FY 2021-22 and highlights the trends and priorities of the CSR landscape in India. The report reveals that 37.87% of the companies spent more than their prescribed CSR budget, 32.89% spent the same, and 29.24% spent less. Poverty Alleviation, Healthcare, WASH, Education, Skills Development, and Rural Development were identified as the priority thematic areas, accounting for 70% of India’s total CSR fund. Reliance Industries Ltd., HDFC Bank, Tata Consultancy Services, ONGC, and Tata Steel emerged as the top 5 spenders, accounting for more than 1/4th of total CSR spending.

The report also highlighted that public sector undertakings accounted for 26.23 % of total CSR spending. At the same time, Oil Drilling Lubricants & Petrochemicals, Banking & Finance, and Computer Software & IT Sector companies jointly shared more than 50% of India’s total CSR fund. In addition, Maharashtra, Odisha, and Delhi received nearly 1/4th of India’s total CSR fund.

Problem

Despite all these efforts, there is a lot more needed to do as a larger number of companies look at CSR as some form of liability which they need to do. The recent Corporate Social Responsibility Policy Amendment Rules, 2022, is a major landmark in the direction of proper management in India. It will motivate private companies to contribute more and more towards investing funds in management.

Way Ahead

It can be achieved by increasing awareness among the business community, as CSR is often seen as a cost centre. However, research suggests a contrasting viewpoint which includes many intangible benefits, such as brand value, increased sales, employee retention and engagement, cost savings, poverty alleviation, and risk management. Customers perceive companies that lead with a purpose positively, which translates into greater sales. CSR initiatives foster values such as empathy and loyalty among employees, leading to low attrition. Responsible companies have found new technologies that have reduced operating costs, and CSR programs bring out change at the grassroots level by harnessing the operational efficiency of the corporate sector. Social and environmental risks affect businesses in the long term and are completely out of their control.

Read More: Sustainable Development Goals Serve as a Catalyst for Corporate Social Responsibility and Innovation