New Delhi: With the legislation on corporate social responsibility (CSR) now in its fourth year, Indian businesses are seemingly adopting a culture of social responsibility, as there has been a significant hike in the spending under the head in areas such as environment and ecology, gender equality, national heritage and sports development for the financial year 2016-17, says a new study.
The annual CSR Tracker, compiled by business body Confederation of Indian Industry (CII), revealed that a total of 1,522 BSE-listed companies spent Rs8,897 crore, or 92% of the budgeted Rs9,680 crore, on CSR activities in FY17 -- an increase of about 9% from the previous year.
It said the number of BSE-listed companies required to fulfil the mandate has increased to 1,522 in FY17 from 1,270 in FY16 and 1,181 in FY15.
The CII survey suggests that the area of environment and ecology saw a 66% increase in FY17 as against the previous fiscal.
Namita Vikas, group president and global head climate strategy and responsible banking at Yes Bank, said that Indian businesses are giving social, environmental and financial performance due recognition, as the corporate sector has realized that CSR can be an impactful channel to earn a social licence to operate and create positive mind share among key stakeholders.
The bank spent about Rs7.5 crore in FY17 on environment sustainability-related CSR projects. “From a multi-focus area approach, as a bank we have moved to a two-pronged approach to deepen the impact within livelihood and water security and environmental sustainability," Vikas added.
Gender equality witnessed a 115% increase, while national heritage and sports development saw a 153% and 192% increase, respectively. FY17 recorded a noteworthy increase in the CSR spends for armed forces in comparison to FY16. With respect to armed forces veterans, there was an increase of Rs33 crore in FY17 as compared to FY16, when less than Rs1 crore was spent.
According to a spokesperson of Lupin Foundation, the philanthropic arm of pharmaceutical company Lupin Limited, since gender equality has been listed as a key sustainable development goal by the UN, efforts for women’s empowerment have been a “priority intervention area" for the foundation since its inception. “We have always treated the empowerment and progression of women, both economically and socially, as a critical component and key benchmark for social development in rural areas," he said.
At the same time, FY17 registered a huge drop in the contribution made to the PM’s Relief Fund--a mere 45 companies gave about Rs23 crore as compared to the previous fiscal where 79 companies contributed Rs80.55 crore. In FY15, 120 companies contributed Rs107.43 crore.
There was no CSR spend in the areas of technology incubation or slum development by a single public sector enterprise (PSE) in FY17.
CII director general Chandrajit Banerjee said that the alignment of business strategy is slowly but surely happening and companies have begun to disclose impact data, which goes beyond the requirements of the legislation. “This is an indicator of improved transparency though quality of data leaves much to be desired," he added.
The states of Maharashtra, Gujarat and Tamil Nadu remained favoured destinations for CSR investment. Moreover, of the 32 industry categories, the major contributors to CSR in all three financial years from 2015 to 2017 are oil and gas, software and services, utilities, and metals and mining.