There was substantial improvement in the corporate social responsibility (CSR) performance of most companies in 2016-17 over the previous year, says an analysis by the Confederation of Indian Industry (CII).
The analysis, based on disclosures of close to 1,270 companies listed on BSE, shows that these companies collectively spent ₹8,185 crore, which is 27 per cent more than the spend of ₹6,400 crore in FY15.
Out of these, 35 are public sector enterprises, whose contribution amounted to 32.16 per cent (₹2,632.5 crore) of the total CSR spend.
“The spend is 92 per cent of the required CSR budget of ₹8,900 crore, using 2 per cent of average net profits of three financial years. The companies collectively had budgeted ₹10,257 crore, which is 15 per cent more than the minimum budget required,’ CII said in a release.
Chandrajit Banerjee, Director-General of CII, said: “The results of CII’s Annual CSR Tracker 2016, clearly demonstrate improvement in the practice and disclosure of practice of CSR by companies.
“That companies are budgeting and spending more than the minimum legislative requirement suggests that companies want to do more for betterment of communities.”
On the route of CSR spend, the analysis found that the number of companies spending exclusively through corporate foundations had increased to 72 from 60 in FY15.
Companies exclusively spending money directly marginally increased to 233 from 227, whereas spending money exclusively through implementing agencies stood steady at 249, compared with 251 in FY15.
“This tends to suggest that companies are building their own capacities for implementation,” the CII added.
Spending pattern
Among the areas of CSR spends, health and sanitation, education and skill development, and rural development were the preferred ones. However, the absolute amount of money contributed to Prime Minister’s Relief Fund declined by 25 per cent to ₹80.55 crore.
Out of the 32 industry categories, absolute spends decreased in just two industries —commercial services and supplies, and oil and gas — while big increases were reported in automobiles and auto components, consumer durables, metals and mining, financial services, pharma and biotech, telecom services and equipment, textiles, apparels and accessories, transportation, and utilities.
Naushad Forbes, President, CII, said: “CSR is a matter of board-level accountability and the boards should be allowed the space to conduct their job without interference or influence from certain stakeholders that have tendencies to exploit CSR legislation for their narrow gains.”
This article was taken from here.