Nearly 1,200 companies listed on the BSE together spent one billion dollars or Rs.6,400 crore towards corporate social responsibility activities in 2014-15, with majority of funds utilised for education, skills, health and sanitation sector, according to a report.
Under the new Companies Act, a certain class of profitable companies must spend every year at least 2 per cent of their average net profit over the preceding three years on CSR.
The norms, which are applicable on a 1,294 BSE-listed companies, came into effect starting April 2014.
Within the first year of the legislation coming into effect, the study found Rs.6,400 crore has been spent for CSR activities with almost 55 per cent being channelled to education, skills, livelihoods, health and sanitation. It added that only about two per cent of the funds have gone to Prime Minister’s relief fund.
The findings, which are based on an analysis of disclosures made by 1,181 BSE-listed companies, done by CII-ITC Centre of Excellence for Sustainable Development, show that Maharashtra and Gujarat saw the most number of companies investing in CSR in states.
It added that more than 90 per cent of the 1,181 companies complied with CSR norm. 87 per cent of the eligible listed companies have actually spent on CSR though 52 per cent shelled out less than the two per cent requirement. About “83 per cent of those 52 per cent of the companies have given reasons for their under-spend,” according to the report. Most firms initially lost time in understanding “a fairly complex piece of legislation”. The other reasons for spending less were due to projects being multi-year or not finding the right projects or implementing agencies.
As many as 97 per cent of the companies analysed had board-level CSR committee while 94 per cent had a CSR policy in place.
Mukund Rajan, who is Co-chair of CII’s National Committee on CSR, said the results of the analysis should put many discussions on the subject in perspective.
“Corporate India has clearly attempted to contribute to nation building which was government's and Parliament's purpose of legislating CSR,” Mr. Rajan said.
Mr. Rajan is a member of the Group Executive Council at Tata Sons as well as Tata brand custodian and group spokesperson.
