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India - The 2% CSR Allocation - Implications for the CSR Manager

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The Indian Parliament (Lok Sabha) has voted in favour of the Companies Bill 2011 which says that corporates ought to spend 2% of net profits on CSR activities. Can the move towards higher value, …

The Indian Parliament (Lok Sabha) has voted in favour of the Companies Bill 2011 which says that corporates ought to spend 2% of net profits on CSR activities. Can the move towards higher value, volume and profit be made while giving back to society and the environment? Can the newly available CSR budgets change the face of India by eradicating hunger, poverty, and building a better India?

While it is still early days, much is being said about the implications of this mandate and many in the corporate world are examining what the bill means for them.

The presentation examines some of these issues.

Published in: Business, Economy & Finance

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  • Learn from Taiwan. Corporates should educate employees on modern agriculture. Companies should spent part of their CSR funds on agriculture Take care of the old and insane in our streets. Part of CSR funds should be for such orphans.
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  • 1. India The 2% CSR Allocation Implications for the CSR Manager Namrata Rana The Customer Experience Company
  • 2. The new Companies Bill has mandated that organisations of a certain financial strength spend 2% of their net profit on corporate social responsibility (CSR), What does it mean for the CSR manager of today?
  • 3. Can the move towards higher value, volume and profit be made while giving back to society and the environment?
  • 4. India is home to the largest number of poor and illiterate
  • 5. 3 out of 10 people need to be taught how to read
  • 6. 4 out of 10 people need to be given food
  • 7. Every year a million children need to be saved before they are a month old and another million before they are 5 years old.
  • 8. Every year 15000 farmers need to be given hope
  • 9. A quarter of the population needs to be taken out of the dark
  • 10. Over 49% of urban areas and 65% of rural areas need to be given toilets
  • 11. Are you ready for the challenge?
  • 12. By 2020 India will be the 3rd largest economy in the world
  • 13. This will put extraordinary pressure on our natural resources and our infrastructure. Water. Waste. Energy. Urbanization. Livelihood.... are just some of the several challenges we face
  • 14. Going by the government’s 2% norm Rs 63 billion is expected to flow in from India’s top 500 listed companies. If we expand this list to the top 1,000 corporations, add MNCs, co-operative banks and SMEs, then we are talking about at least Rs 120 billion. Each of India’s 660 districts could get over Rs 18 crore of this investment.
  • 15. What should be spent, where and on whom? Can you help your company achieve its strategic goals?
  • 16. But the corporate landscape is challenging......
  • 17. Challenges CSR in many companies is either part of HR or Corporate Communications. Need for a separate department with specific deliverables. NEED
  • 18. Challenges CSR budgets are expected to double, this will also lead to increased scrutiny by stakeholders. Need for re-skilling of existing teams and establishment of processes. NEED
  • 19. Challenges Many CSR initiatives have been ad hoc and not necessarily linked to requirements. Need for a strategic focus + Study of stakeholders needs and aspirations, + an action plan that can run for several years NEED
  • 20. Challenges CSR initiatives in the past may not have formed part of standard corporate reporting Need to assess, monitor and report initiatives and judge efficacy NEED
  • 21. Then, ask some tough questions? WHO - is your core audience, for which CSR initiatives need to be designed? WHAT - is your value proposition and is this in synch with your core business? WHEN - did your competition launch their CSR initiatives, do you want to be distinct from them? WHERE - is the sweet spot, through which you can benefit both the community and the company? WHY - are you investing in CSR if you cannot deliver what you are promising?
  • 22. Define your core intent Do you want to...... Run a good business Give Some thing Back Be a good neighbour Be a beacon to others Transform an industry or industries
  • 23. Take a close look at the implementation, after defining the broad areas you want to look at as part of CSR.
  • 24. Ask yourself how your CSR will scale from year to year? And develop an approach that is sustainable... Philanthropic Transactional Integrative Strong partnerships Fundamental Impact Improves competitive context Events sponsorships Cause marketing Employee volunteerism Mitigate value chain impacts Donations Grants Actions
  • 25. While developing your CSR strategy it might be useful to look at a Macro view too For Example: The starting point of the Indian Planning Commission’s consultations with stakeholders for the 12th plan were these challenges..... Enhancing capacity for growth SOURCE - Scenarios shaping India’s growth Enhancing skills and faster generation of employment Managing the environment Markets for efficiency and Inclusion Decentralization Empowerment and Information Technology and Innovation Securing the energy future of India Accelerated development of transport infrastructure Rural transformation + growth of agriculture Managing Urbanization Improved access to quality of education Preventive and curative healthcare
  • 26. Are you ready?
  • 27. Futurescape, Delhi Level 4, Rectangle 1, Commercial Complex D4 Saket, Behind Sheraton, Delhi New Delhi – 110017, INDIA Futurescape, Mumbai Level 2, Raheja Centre Point 294 CST Road Near Mumbai University Off Bandra–Kurla Complex, Santacruz (E) Mumbai – 400098, INDIA Telephone: +91 9910201783 +91 (11) 6654 4196 Email: innovate@futurescape.in Web: www.futurescape.in Twitter: @futurescape