2019 was a big year for Corporate Social Responsibility in India. Corporate India breathed a sigh of relief when the high-level committee on CSR recommended doing away with the penal provision of imprisonment for non-compliance with CSR norms. This had followed the recent amendments to the Companies Act 2013 treating CSR non-compliance as a criminal offence, and declaring stiff penalties and a jail term for violations.
As the year draws to a close, We take you through the biggest news stories you may have missed for CSR in 2019.
NASSCOM Foundation hosts CSR Conference
NASSCOM Foundation, in partnership with BNY Mellon and eClerx, hosted India’s largest Tech for Good driven conference – The CSR Leadership Conference 2018 in Mumbai.
The conference brought over 150 delegates consisting of CEOs, CXOs, CSR Heads from the industry, policymakers, influencers, NGO Leads, Tech4Good champions, and social innovators under one roof to discuss innovative approaches to Corporate Social Responsibility in 2019, understand the problems of the present and then co-create a roadmap to a new, developed and inclusive India. The conference, with a central theme of ‘catalysing change’, saw visionary leaders like Harish Mehta, Founder, NASSCOM; Chairman, Onward Technologies call for collaboration across the industry to solve larger national issues.
Largest Collection for a Cause
Myntra entered the Limca Book of Records – 2019, for undertaking the largest ever collection drive of less frequently used clothes and footwear from shoppers across the nation. This project was part of the popular biannual sale property, ‘Myntra Fashion Upgrade’, that allowed shoppers to exchange such items, against points that they could use to buy new clothes.
Directors of leading companies Form CSR Board
Heads of corporate social responsibility at 27 major companies of the world have come together to launch the CSR Board. The mission of the group is to help members engage in management-level discussions with a trusted network of their peers.
The group is managed by Board.org, a membership organization where senior-level leaders at big companies collaborate in private, peer-to-peer discussions. CSR Board Members include Allstate, Beam Suntory, Best Buy, BJ’s Wholesale Club, Center Point Energy, Cisco, Electronic Arts, Experian, Ferguson Enterprises, Georgia-Pacific, H&R Block, Hard Rock International, Hertz, The J.M. Smucker Company, Mass Mutual, Motorola Solutions, NVIDIA, ON Semiconductor, Pernod Ricard, Stryker, Synopsys, Tyson Foods, Vertex Pharmaceuticals, and Yum! Brands.
Disaster Relief Works are Now Part of CSR
Companies in India will now be able to count all expenditure done towards disaster relief activities as part of their required annual Corporate Social Responsibility (CSR) spend. This move came after the ministry gave special dispensation to companies to include disaster relief expenditure as CSR last year after flooding in Kerala and this year after Cyclone Fani hit Odisha.
The CSR Journal Excellence Awards – 3rd Edition
Tata Power, ReNew Power, Hindustan Zinc, Aditya Birla Capital Ltd., YES Bank Ltd. and Mahindra & Mahindra emerged winners at the third edition of The CSR Journal Excellence Awards.
Speaking at the event, Union Minister of Agriculture and Farmer Welfare, Rural Development and Panchayat Raj, Narendra Singh Tomar, said the role of agriculture in the scope of corporate social responsibility in India was an important area that needed further impetus if India has to achieve its $5 trillion economic goal. Union Minister of State for Home Affairs, G. Kishan Reddy and Union Cabinet Minister of Food Processing, Harsimrat Kaur Badal, felicitated the companies chosen as winners.
Many illustrious women, including Sindhutai Sapkal, social activist and founder-president, The Mother Global Foundation; Anurima Sharma, IRS Officer; Shalini Bharat, director of TISS; Roopa Moudgil, Inspector-General of Police, Railways; Vaishali Nigam Sinha of ReNew Power and Sarika Minda of Spark Minda Foundation were honoured for their contribution to Nation Building.
Adoption of Monuments by Companies
With the view to protect the monuments, the government has asked the corporate houses and public sector companies to adopt buildings with world heritage tag in the country and maintain them under their CSR programmes, state tourism minister with independent charge, Prahlad Singh Patel said.
Under ‘Adopt the Heritage’ programme, jointly initiated by the ministry of tourism and ministry of culture, private and public sector companies and individuals are encouraged to adopt heritage sites and other tourist sites for the development of tourist amenities. The adoptive companies become ‘Monument Mitras’ and provide advanced amenities for tourist destinations. They also look after the operations and the maintenance of the amenities.
Hike 60% CSR expenditure cap, says NITI Aayog
National Institution for Transforming India (NITI) Aayog has asked the Central Public Sector Enterprises (CPSEs) to hike the expenditure cap by 60 % and redirect more funds for the development of 117 districts from across 28 states.
In December 2018, the Department of Public Enterprises has notified rules mandating 60% of Corporate Social Responsibility (CSR) allocation of CPSEs under health and education to be spent on projects in aspirational districts. Concerning this, a meeting was held in July where NITI Aayog stated that CPSEs should think of removing 60% CSR expenditure cap for the aspirational districts. They should also come up with increased funds. These funds are needed to reform 117 districts identified under the Aspirational Districts Programme (ADP).
Listing of Social Enterprises
Union Minister for Finance and Corporate Affairs Nirmala Sitharaman on July 5 said that the government will allow the listing of social enterprises and voluntary organisations on a new electronic fund-raising platform – a Social stock exchange.
The move will be to help those organisations who are working for social welfare objectives and want to raise funds. The social stock exchange will be regulated by market regulator Securities and Exchange Board of India (SEBI), Sitharaman said while presenting the Union Budget 2019-20.
CSR Violations decriminalised, says Finance Minister
CSR Violations have been decriminalised, said Nirmala Sitharaman, Minister for Finance and Corporate Affairs announced at press briefing on August 23. Earlier, parliament approved the Companies (Amendment) Bill which sought to tighten CSR norms and ensure stricter action for non-compliance of the company law regulations.
A key change in the bill pertains to Corporate Social Responsibility (CSR) spending, wherein companies would have to mandatorily keep unspent money in a special account. The new amendments of the act says that any amount remaining unspent under sub-section 5, pursuant to any ongoing project fulfilling such conditions, undertaken by a company in pursuance of its CSR Policy, shall be transferred by the company within a period of thirty days from the end of the financial year to a special account to be opened by the company.
Govt Gives Time till 2024 to Spend CSR funds
The government has clarified that amended CSR laws are with prospective effect and companies have time until July 2024 to use accumulated CSR funds in projects of their choice, a media report said. The Indian Parliament in July passed amendments to the Companies Act under which unspent CSR allocations would have to be transferred to a fund specified by the government.
Corporate affairs secretary Injeti Srinivas has allayed concerns that the government wants to appropriate unspent CSR funds to finance its own programmes, the report said. While leaving the window open until July 2024 for companies to use up their accumulated CSR money, the government is also working on setting up a national corpus with a “strong governance structure” to which unspent funds will need to be transferred if the deadline is not met, Srinivas further said as reported by the publication.
The corpus will be overseen by a body that will include industry representatives who are at the forefront of efforts to promote the causes of society and the environment, he said.
India’s Top 16 Brands Commit to Sustainable Fashion
Union Minister for Textiles Smriti Zubin Irani on 22 Aug launched project SU.RE – Sustainable Resolution – for sustainable fashion at the Lakmé Fashion Winter/Festive 2019, in Mumbai.
The project was launched in association with Clothing Manufacturers Association of India (CMAI), IMG Reliance and United Nations in India. India’s top 16 apparel brands with a combined industry value of INR 30,000 crore are signatories to the project, a release said quoting the minister. The signatories for project SU.RE are Future Group, Shopper’s Stop, Aditya Birla Retail, Arvind Brands, Lifestyle, Max, Raymond, House of Anita Dongre, W, Biba, Westside, 109F, Spykar, Levi’s, Bestsellers and Trends.
Expansion of Scope of CSR Spending
Corporate affairs and finance minister Nirmala Sitharaman on Friday said the government has decided to expand the scope of corporate spend under CSR in 2019. Companies can now contribute towards research across various fields such as science, technology, medicine.
Besides, CSR fund can be spent on incubators funded by the Centre or state or any state-owned companies. This is expected to attract more funds for research and development in the country.
“The Government has also decided to expand the scope of CSR 2 percent spending. Now the fund can be spent on incubators funded by Central or State Government or any agency or Public Sector Undertaking of Central or State Government, and, making contributions to public funded Universities, IITs, National Laboratories and Autonomous Bodies (established under the auspices of ICAR, ICMR, CSIR, DAE, DRDO, DST, Ministry of Electronics and Information Technology) engaged in conducting research in science, technology, engineering and medicine aimed at promoting SDGs (sustainable development goals),” the government said in a statement.
26% of Top 100 Indian Companies Cut Corners
SoulAce recently conducted a study on the CSR expenditure of leading 100 companies by their CSR expenditure for the year 2018-19. The leading 100 companies that were selected for the recent CSR study for spending in Corporate Social Responsibility in 2019 consisted of a mixture of Public Sector Enterprises (25) and Non-Public Sector Enterprises (75). The total expenditure of these 100 companies was INR 9,463 crores.
26% of leading companies are still not spending the prescribed amount despite the CSR law being in place for five years. Companies that have a budget of over INR 100 Cr. tend to spend more than the prescribed limit on CSR activities. Out of companies that had a budget of INR 100 Crores, 54% of them spent more than their prescribed budget, 21% of them spent less and 25% of them spent exactly as per prescribed.
President of India Confers CSR Awards
The President of India, Ram Nath Kovind, presented Corporate Social Responsibility (CSR) Awards to selected companies. The President conferred national awards to winning companies in two categories namely, “Corporate Award for Excellence in CSR” and “Contribution of CSR in Challenging Circumstances”.
The Awards have been instituted by the Ministry of Corporate Affairs to recognize corporate initiatives in the area of Corporate Social Responsibility in 2019 to achieve inclusive growth and inclusive and sustainable development. The Indian Institute of Corporate Affairs (IICA), think-tank of the Ministry, has rendered technical and logistics support in the conduct of the rigorous award process.
Rajasthan government notifies CSR authority
The government on Tuesday notified Rajasthan CSR Authority to guide, monitor, and partner companies for achieving scale and improving efficiency in implementing social welfare projects. The three-tier authority will be represented by the chief minister, chief secretary, additional chief secretary of industries, and commissioner of industries besides senior officials from various departments.
Under the corporate social responsibility (CSR) schemes, 134 companies have spent Rs 436.81 crore in 2017-18 in Rajasthan which rose from Rs 388.79 crore in the previous year. Officials said the spends towards Corporate Social Responsibility in 2019 could be more, but they are yet to prepare the final report.
Punjab Govt. sets up CSR advisory board
In a bid to streamline various corporate social responsibility (CSR) activities and to set up a neutral platform involving all the stakeholders, the Punjab cabinet approved the constitution of the Punjab Corporate Social Responsibility Advisory Board under the chief minister’s chairmanship and a CSR Authority under the chief secretary.
A spokesperson of the Chief Minister’s Office (CMO) said the board and the authority would ensure systematic channelisation of CSR funds into the essential sectors and projects, according to the developmental priorities of the state.
The authority would consist of the chief secretary as its chairman, with the administrative secretary (industries and commerce) and finance secretary as its members, besides a chief executive officer as the member-secretary.
Disability Inclusion on the Agenda
At the event India Inc.- The Valuable 500” in association with CII-India Business Disability Network (IBDN) and EnAble India, 20 conscious and responsible business leaders from India took a pledge to take affirmative actions for Disability Inclusion. Companies signed up for the Valuable 500 include Mahindra, Brookfield Properties, Accenture, IBM, ANZ Bank, Laguna, VINDHYA, Schindler, Central Group Asia, Lalit Hospitality, Dr. Reddy’s Lab, Olive Bar & Kitchen, The Linde Group, Sansera Engineering Ltd, Dusters Total Solutions Services Pvt Ltd, Spark Minda, Mphasis, Refinitiv, ALLEGIS, State Street.
To date, more than 400 companies globally have signed up the Valuable 500 to support this cause and many are already in the process of joining it. Even in the Indian context, the number of such companies is rising, making disability inclusion a part of their vision.
Corporate CSR Funds Not for Govt Projects
The government is not planning to use corporate social responsibility funds from corporates for its projects, minister of state for finance and corporate affairs Anurag Singh Thakur said in a reply to a question in the Rajya Sabha. Thakur also clarified that corporates could now count contributions towards designated technology incubators and contributions to publicly funded universities, Indian Institutes of Technologies (IITs), national laboratories and autonomous bodies engaged in research as part of their CSR expenditure.
CSR is Board-driven Process, Says Govt.
Corporate Social Responsibility (CSR) is a board-driven process and the board of the company is empowered to decide, implement and monitor such activities, Union minister Anurag Singh Thakur said in the Lok Sabha. The Union Minister of state for Finance said a company can also undertake its CSR activities through a registered trust or a registered society or a Section 8 company as per Rule 4(2) of the Companies (Corporate Social Responsibility Policy) Rules, 2014.
Thakur said the entire CSR architecture is disclosure-based and CSR mandated companies are required to file details of CSR amount spent annually in MCA21 registry. Completion status of CSR projects or activities is not maintained by the government.
SEZ for Tripura
The Ministry of Commerce and Industry has notified the setting up of the first ever Special Economic Zone – SEZ in Tripura on December 16, 2019. The SEZ is being set-up at Paschim Jalefa, Sabroom, South Tripura District, which is 130 km away from Agartala. It will be a Sector Specific Economic Zone for Agro-Based Food Processing.
The estimated investment in the project will be around 1550 Crore. The developer of the SEZ will be Tripura Industrial Development Corporation (TIDC) Ltd. The SEZ is estimated to generate 12,000 skilled jobs. Rubber based industries, textile and Apparel Industries, bamboo and Agri-food Processing Industries will be set-up in the SEZ.
These were the stories that made headlines for CSR in 2019. Did The CSR Journal miss out on any earth-shattering CSR news? We’d love to know.