MUMBAI: Big Tata group companies are readying to channel asignificant part of their mandatory charity spend to Tata Trusts, the group’s philanthropic arm and owner, in line with Tata Trusts Chairman Ratan Tata’s effort to streamline all social spends into one powerful programme, said several people with direct knowledge of the plan.
Tata Trusts CSR spent Rs 808 crore in 2016, according to its latest available annual report.
Tata SteelBSE 1.90 %, Tata Motors, Tata ChemicalsBSE -0.06 %, Tata PowerBSE 0.06 %, Tata Global BeveragesBSE -0.26 % and Indian Hotels are in discussions to decide on the quantum of collaboration with Tata Trusts, said these persons. ET reported on August 25 that Tata Consultancy Services is expected to contribute a sizable portion of its corporate social responsibility (CSR) fund to Tata Trusts.
The technology firm, the most profitable in the salt-to-software conglomerate, is the first Tata firm to consider such a move now being followed by other group companies.
Ratan Tata-chaired Tata Trusts own two-thirds of Tata Sons, the holding company and promoter to all Tata group companies. It is a cluster of 14 charity organisations that use dividend income from Tata Sons to work on social welfare projects in education, healthcare, livelihood and sanitation.
Tata Trusts CSR spent Rs 808 crore in 2016, according to its latest available annual report. The total CSR spend of these seven group companies put together was about Rs 623 crore last fiscal, a potential booster for Trusts’ fund pool. The government mandates companies to spend at least 2% of average net profits of the three preceding financial years on CSR activities.
“It’s again coming back to that One Tata philosophy. Given the capability that rests with the Trusts, leave alone the number of projects they undertake, we can do much more toward sustainability if we bring it all together. The idea is to bring together the knowledge, capabilities and resources to take on big projects and create a bigger impact. There is no point in replicating that capability,” Tata Sons chairman N. Chandrasekaran told ET in an interview on Monday.
Tata Steel, Tata Chemicals, Tata Power, Tata Global Beverages and Indian Hotels did not reply to emails seeking comment. Tata Motors said it is looking at a potential collaboration with Tata Trusts to not only support in reaching out to deserving communities.
“We will be happy to contribute a part of our CSR fund to Tata Trusts,’’ said a senior official from Indian Hotels Company Ltd. “I think it’s for the new leadership to decide which model best suits the group,” said Ratan Tata, chairman Tata Trusts said in August, “My preference, of course, would be a unified model that gives us considerable strength, scale, unity and multiple capabilities… whenever a Tata companyBSE 0.00 % is willing to work together with the Trusts, we are happy to make the connection.” “The current CSR programmes that engage with the communities around the plant locations will continue,” one of the persons quoted above said. “Tata companies want to contribute to the larger Tata Trusts as a group to create a larger impact on common causes.”
Article Source: The Economic Times