Corporate spending on CSR more than just a law, shows an 8% increase after FY 2017-18

The increase in corporate spending shows an astounding increase of 8% as compared to the previous year on CSR (Corporate Social Responsibility). Which puts CSR at 98% of the prescribed spend- based on the act, S&P BSE 100 companies were asked to spend Rs.72.0 billion CSR, according to a report released by liAs, a proxy advisory firm.

According to the report corporate spending shows 1.9% of their three-year average profit, Public Sector Undertakings met 2% target spend. Though, the actual spend which stands at 20.6 billion this year, has witnessed a low of 13.8%, following a 26% decline in three year average profits.

On aggregate, over 30% investment in FY2017-18 has been made towards education projects, while another 30% has been spent on rural development and health care projects. The projects solving the issues of hunger, poverty and malnutrition are also getting the due attention as we are witnessing an upward trend in CSR spend in these areas, added report.

Ticking the CSR box though has come down. This is reflected clearly in the contributions to the Prime Minister’s Relief Fund, and technology incubators declined by 89% this year.

A lacuna till now has been disclosures on impact assessment. This is changing. During the current year, 81 of the 100 companies disclosed that they have undertaken an impact assessment, up from 59 companies in FY16.

According to the companies Act 2013 it is expected from businesses to spend 2% of their three-year average profit on social responsibilities. Even before the act rolled out, companies recognized that they need to think more than just profits- and rightly did so. Since, CSR spending has now become mandatory, companies have given social issues the top priority. They now understand that hunger, healthcare, education and poverty are global issues, which must be eradicated.