Findings of CSR Study & Role of CSR in UP · 2015-01-13 · welfare (GD Birla, Jamanalal Bajaj,...
Transcript of Findings of CSR Study & Role of CSR in UP · 2015-01-13 · welfare (GD Birla, Jamanalal Bajaj,...
Presentation at E&H Conference, Sahranpur, UP25 October 2013
Findings of CSR Study & Role of CSR in UP
By Subhash Mittal, FCASecretary, Socio-Research & Reform Foundation
E-mail: [email protected]
Findings of CSR Study & Role of CSR in UP by Subhash MittalE&H Foundation, Saharanpur, 25 Oct 2013
Background to the Report
Desire to learn about CSR, before talking about it.
Huge interest one saw in CSR - from civil sector, from industrialists, from academicians.
Very little hard facts available on CSR in the country
A desire to promote CSR in a manner that it becomes a sustainable and effective instrument by creating a win-win situation.
Scope
Arrive at scope of CSR Interventions in terms of funding
Identify popular sectors for CSR intervention
Identify methodology of implementation
Additional scope
Assess transparency in the sector and develop measurement tools for the same
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
Methodology
Discussing ToR with various stakeholders
Understand the sector by discussing it with Industry & Sector representatives
Participate in discussion groups on CSR to develop better understanding
Prepare list of top 100 corporates (List as per SEBI)
Undertake study of individual company’s Annual Reports, Business Responsibility Report and CSR Reports
Develop matrix tables for capturing critical information, which is comparable
Data captured is properly documented for subsequent verification
Ensure sufficient checks for all data captured
Summarise and analyse the results
Prepare a report
Disseminate the results through public platforms
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
Evolution of CSR
Traditionally CSR undertaken by city seths through dharmshala, pios, etc. ~ based more on religious sentiments
Gandhiji’s call for ‘Trusteeship’ was an important part of evolution of CSR in country.
Several industrialists of this era have contributed to welfare (GD Birla, Jamanalal Bajaj, Sarabhai, MurugappaGroup, to name a few)
Institutions like BITS Pilani, IIM Ahemdabad, Physical Research Lab, Shri Ram College, etc are all result of initiatives of industrialists
50s -70s was lull period for CRS Huge growth in CRS since the industrial growth has
picked up
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
Legal basis of CSR
Private sector
Presently no legal requirements though corporates try to provide 0.5% -1.5% of their PAT for CSR. Even loss-making companies contributing.
Clause 135: CSR mandatory for organisation satisfying any of three conditions:
Minimum Turnover Rs 1000 crore, or
Networth Rs 500 crore, or
Net profit in any financial year Rs 5 crore or more.
Mandatory 2% CSR, CSR Committee (3), Board accountable for ensuring mandatory spending otherwise explain through Directors’ Report
Legal basis of CSR…………….cont’d
Board to formulate policy to indicate activities to be undertaken. Presently permitted activities covered under Sch VII. Eradication of extreme Hunger & Poverty Education Women Empowerment Child Mortality & Maternal Health HIV, Malaria & other diseases Environment Sustainability Skill Enhancement Social Enterprise projects PM / CM or similar other Relief funds
Give preference within vicinity of the operational area
Board to monitor
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
Legal basis of CSR…………….cont’d
PUBLIC SECTOR:
Central Public Sector Enterprises need to provide for as follows:
Less than Rs 100 cr Profit : 3%-5%
Rs 100 cr – Rs 500 cr : 2% -3%
Above Rs 500 cr : 1% - 2%
CSR amount once allocated would not lapse
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
Major Findings - Spending
CSR Contribution of top 100 corporates comes
to around 0.82% of PAT, which comes to Rs
2650 crores.
Biggest CSR spending (in absolute terms) by Reliance Industries Rs 357 crores
Coal India Rs 151 crores
Tata Steel Rs 146 crores
SBI Rs 123 crores
ONGC Rs 121 crores
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
Major Findings - Spending
0
5
10
15
20
25
30
35
> =2% 2% - 1% 1% - 0.5% 0.5% - 0.1% Loss-making
entities
CSR Not
Available
6
11
17
31
8
27
No.
of
Co
mp
an
ies
Categories - % of PAT
CSR Spending as % of PAT
Sector – wise Spending
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
8678
4453
47
29
167
60
0
10
20
30
40
50
60
70
80
90
100
Education Health Skill Enhancement Livelihood & Financial Inclusion
Environment Women Empowerment Disaster Relief Sports Others
No
. o
f C
om
pn
aie
s
Sector-wise CSR Interventions
CSR Projection
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
6279
939512
302 199
76%
11%6% 4% 2%
0
1000
2000
3000
4000
5000
6000
7000
1 to 100 101 to 200 201 to 300 301 to 400 401 to 500
An
ticip
ate
d C
SR
Con
trib
uti
on
(in
cro
res)
Category of Companies as per ET-500
Anticipated CSR Contribution as per new Companies Act
Implementation Strategies
Larger CSR programmes are undertaking wider approach
Infosys works in education in large number of areas
Reliance is undertaking large number of programmes through different parts of the countries
Banks work for financial inclusion through their branches
A large number of CSR programmes interventions are around factories / units (Hero)
Nasscom aligns with its core strength – IT
NIIT has evolved a novel method – low cost IT education
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
Partnering with NGOs
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
Foundation
only, 11
NGOs only, 33Foundation plus
NGOs, 47
No Information, 9
Implementation Methodology
Model developed to measure Transparency in CSR
Has company disclosed CSR contribution for the year ? (3)
Has company distinctly disclosed activities undertaken during the year ? (3)
Does it prepare Business Responsibility
Report ? (2)
Does it disclose a CSR strategy ? (1)
Are CSR activities disclosed on web? (1)
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
Transparency relating to CSR
47 cases CSR amount has not been disclosed
No distinct information about 32 cases what CSR activities undertaken during the year
Even among 68 cases where we have taken CSR information for the year as available, one would need to put in great effort to decipher this.
Study has developed a CSR Transparency Index. We hope this will help in improving disclosure of CSR.
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
10 out of 10 22 companies
5 or less out of 10 53
2 out of 10 5
1 out of 10 7
0 out of 10 4
Scenario within ‘UP’ Huge need considering 33% of
population falls within 6-18 age group
Another 13% fall in 0-5.
Large funds available with the Govtfor Education sector.
FY 2013-14 allocations
- State education allocation Rs 32886 cr
- SSA allocation almost Rs 9000 cr
- per capita allocation of Govt funds vis-à-vis population segment of 6-18 is around Rs 6339
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
Main Issues to be considered
CSR has potential to evolve into a major source of development intervention.
Education & Health are two major areas of intervention of CSR.
Need to develop an integrated approach involving Govt, CSOs and CSRs.
There is a need to develop mechanism to support CSRs in identification of credible CSOs.
Developing a genuine Partnership Framework between a corporate & CSO.
Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
Thank You.