The Companies Act 2013 expects businesses to spend 2% of their three-year average profits on social initiatives. Even before the Act was put in place, companies recognized they need to think about more than just profits – and did so. But since CSR has become mandatory, companies have embraced social causes with a fervour. They now apply the same rigour to causes as diverse – as hunger, poverty, healthcare, education, cleanliness environmental sustainability, and rural development, as they bring to their business.
The IiAS study of the FY18 Corporate Social Responsibility (CSR) initiatives and disclosures of the S&P BSE 100 companies reveals that companies are taking their CSR initiative seriously, measuring and disclosing the impact they are having on the society. Further, they are on course to achieve the 2% target in the coming years.
Some of the key findings of the study are that companies have spent Rs. 74.6 bn, an increase of 5.8% compared to the previous year. In FY18, companies spent 1.9% of their three-year average profits. The aggregate spends by MNC’s and Institutionally owned entities was 2.0%, while it was 1.9% for promoter owned entities and 1.8% for PSUs. The number of companies meeting the 2% spend target has increased from 46 in FY16, 59 in FY 17 to 68 this year. The top ten companies contribute ~48% to the overall spend on CSR; in FY17, this was 47. Education continues to be the focus area for companies ~30% of the aggregate FY18 spend was made towards education projects. Other areas were rural development (13.3%), hunger, poverty and healthcare projects (20.6 percent).
Source : PTI