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Corporate Engagement in India: 2% CSR Allocation


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Namrata Rana, Director, Futurescape

Namrata Rana will speak about the new CSR law that requires Indian compa- nies to donate 2% of their profits to nonprofits.

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Corporate Engagement in India: 2% CSR Allocation

  1. 1. India Implications of the 2% CSR allocation Namrata Rana Twitter - @namratarana 2014 Summit on Social Media & Online Giving
  2. 2. By 2020 India will be the 3rd largest economy in the world
  3. 3. Can the move towards higher value, volume and profit be made while giving back to society and the environment?
  4. 4. India is home to the largest number of poor and illiterate
  5. 5. 3 out of 10 people need to be taught how to read
  6. 6. 4 out of 10 people need to be given food
  7. 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. 8. Every year 15000 farmers need to be given hope
  9. 9. A quarter of the population needs to be taken out of the dark
  10. 10. Over 49% of urban areas and 65% of rural areas need to be given toilets
  11. 11. The need for growth will put extraordinary pressure on our natural resources and our infrastructure. Water.Waste. Energy. Urbanization. Livelihood....are just some of the several challenges India faces
  12. 12. 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 are its implications?
  13. 13. 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.
  14. 14. 10 areas where the CSR Budget can be spent i) Eradicating hunger, poverty and malnutrition, promoting preventative health care and sanitation and making available safe drinking water; ! ii) Promoting education including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects. ! iii) Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and other such facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;
  15. 15. iv) Ensuring environmental sustainability, ecological balance, protections of flora and fauna, animal welfare, agroforestry, conversation of natural resources and maintaining quality of soil, air and water; ! v) Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts’ ! vi) Measures for the benefit of armed forces veterans, war widows and their dependents ! vii) Training to promote rural sports, regionally recognised sports, Paralympics sports 10 areas where the CSR Budget can be spent
  16. 16. 10 areas where the CSR Budget can be spent viii) Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women; ! ix) Contributions or funds provided by technology incubators located within academic institutions which are approved by the Central Government; ! x) Rural development projects
  17. 17. A quick look at some of some research on what companies are doing…. Research : Collaboration between Prof Utkarsh Majmudar and Namrata Rana Supported by IIM Udaipur
  18. 18. AUTOMOTIVE India has the highest accident rate in the world. ! Reports of 19 auto companies reveal a high focus on employees and community (around manufacturing plants) ! SAFE DRIVING - a missed opportunity Research http:// ResponsibleFuture/entry/strategic- approach-towards-automotive-csr-part-2
  19. 19. STEEL India has 18 percent of the world’s population and 4 percent of the globe’s water resources. ! We studied the annual reports and websites of steel companies and found that 9 out of 22 companies do not have any information on water related initiatives. Research ResponsibleFuture/entry/water-scarcity-and- steel-companies
  20. 20. TOYS We found that over 56 International toy brands are sold in India. Parents are increasingly concerned about responsible - safe - non toxic - non plastic toys. ! Of these 56 companies only 11 company websites mention CSR activities of which only 4 - LEGO, Mattel, Walt Disney and Wild Republic Toys talk of socially responsible activities being conducted in India. Research ResponsibleFuture/entry/to-play-or-not-to- play
  21. 21. Plastic Plastics are one of worst products to dispose, taking hundreds of years to degrade. ! Out of the 12 companies studied only one, produces a sustainability report. The remaining companies provide information through their annual reports and websites. ! Almost no focus on reuse - recycle aspects of plastic. Research ResponsibleFuture/entry/csr-sustainability- and-the-plastic-industry
  22. 22. FMCG Mostly market to women and children - large TV and Print budgets. ! Out of the total sample of 32 companies we find that only 18 companies have initiatives that focus on Women and Children. 5 companies are doing health & hygiene related activities. 4 companies have activities that focus on Child Malnutrition. 5 companies are doing activities that support education and related activities. 5 companies focus on empowering women through skill upgradation and capacity building programs. Research strategic-to-fmcg-companies1
  23. 23. Implementing the 2% mandate is not easy Corporates face many challenges……
  24. 24. NEED Challenges ! CSR in many companies is either part of HR or Corporate Communications. Need for a separate department with specific deliverables.
  25. 25. NEED 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.
  26. 26. NEED 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
  27. 27. NEED 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
  28. 28. What should be spent, where and on whom? Can you help companies achieve their strategic goals? Are you ready for the challenge?
  29. 29. Namrata Rana Twitter - @namratarana Level 4, Rectangle 1 Commercial Complex D4, Saket New Delhi - 110017, INDIA +91 (11) 6654 4196 Twitter - @futurescape