Mandatory CSR- is it great Idea


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Mandatory CSR- is it great Idea

  1. 1. Mandatory CSR- is it great Idea? <ul><li>Saroj Ku. Behera </li></ul><ul><li>Management Representative </li></ul><ul><li>Lawrence &Mayo </li></ul>o
  2. 2. Brief Outlines <ul><li>According to global survey by Ernst & Young, 94 %of companies believe the development of a CSR strategy can deliver real business benefits, ..... </li></ul><ul><li>Research found that company CSR programs influence 70 %of all consumer purchasing decisions. </li></ul>
  3. 3. What does ”CSR spending” mean? <ul><li>According to voluntary guidelines; </li></ul><ul><ul><li>Identification of projects/activities </li></ul></ul><ul><ul><li>Physichal targets with time frame </li></ul></ul><ul><ul><li>Implementation and monitoring </li></ul></ul>
  4. 4. Organizations with CSR Initiatives
  5. 5. Inc Reaction to mandatory CSR spending &quot; I don't think you generate CSR by putting statutory requirements. I think there is enough social consciousness among the larger companies to drive it on the basis of what they consider their responsibility,” , Wipro chairman Azim Premji In the largest act of philanthropy by an Indian, Wipro chairman Azim Premji will give about Rs 8,846 crore ($2 billion) to improve school education in India
  6. 6. <ul><li>Philanthropic organizations should be allowed to operate reasonably freely and not with control to my mind. When governments start controlling things, things don’t work as well as when people are motivated to do these things.” Adi Godrej, MD, Godrej Group </li></ul><ul><li>CSR mandatory would make it cosmetic. “I don’t think anything should be made mandatory because it then becomes very cosmetic, I think there needs to be a realization from corporate India that they have to necessarily engage in this because without that their businesses themselves are not sort of exuding good governance </li></ul><ul><li>Kiran Mazumdar Shaw, CMD, Biocon Ltd </li></ul><ul><li>I am not in favor, I don’t know what will be achieved, Nitin Paranjpe, MD & CEO, HUL </li></ul>
  7. 7. Mandatory “CSR spend”, where societies will get Rs 8,700+ cr a yr <ul><li>There are about 1,200+ Indian listed companies who have posted profits for the last financial year. The total aggregate profits posted by these companies for the last financial year works out to Rs 4,37,167 crore. </li></ul><ul><li>If the proposal becomes a guideline, then all the profit making companies will have to pay 2% of their PAT as CSR.. </li></ul><ul><li>ONGC which recorded Rs 22,456 crore as PAT in the last financial year may have to spend Rs 449 crore as CSR . </li></ul><ul><li>Reliance Industries which posted Rs 20,211 crore PAT may have to spend Rs 404 crore towards CSR, while Piramal Healthcare whose PAT was at Rs 12,883 crore may spend Rs 258 crore on such activities. etc </li></ul>
  8. 8. Recommendations for better CSR <ul><li>Companies should extend their CSR activities in less privileged states rather than concentrate in operated areas. </li></ul><ul><li>There is also need for public-private partnership with well-defined controls and process for the best use of resources for social change </li></ul><ul><li>It will give better results if activities are based on a more participatory approach and touch the grassroots level </li></ul><ul><li>Special training need to be given to business mangers in working with social issues. </li></ul>
  9. 9. Conclusion <ul><li>CSR holds a very important place in the development scenario of the world today and can pose as an alternative tool for sustainable development </li></ul><ul><li>Nevertheless CSR has certain limitations which restrict its activities. The need of the hour is to formulate effective strategic policies and adopt various instruments according to the company history </li></ul>