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What Is Corporate Social Responsibility (CSR) ?

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6 views

What Is Corporate Social Responsibility (CSR) ?

Uploaded by

adityakumar.iift2325
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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1. What is Corporate Social Responsibility (CSR)?

Corporate Social Responsibility (CSR) refers to the practice of businesses


integrating social, environmental, and ethical responsibilities into their
operations. It involves going beyond profit-making to address societal needs,
protect the environment, and contribute to the overall development of
communities.

CSR focuses on sustainable practices in areas such as:


• Social Responsibility: Promoting education, health care, and community
development.
• Environmental Responsibility: Supporting sustainability, reducing carbon
footprints, and conserving resources.
• Economic Responsibility: Ensuring ethical business practices and fair
wages.

2. CSR Mandate in India


The provisions of CSR applies to every company fulfiing any of the following
conditions in the preceding financial year:

• Net worth of more than Rs.500 crore


• Turnover of more than Rs.1000 crore
• Net profit of more than Rs.5 crore
The Board of Directors of every company ensures that the company spends in
every financial year at least 2% of its average net profits made during the
immediately preceding three financial years as per its CSR policy.
If the company has not completed three financial years since its incorporation,
it must spend 2% of its average net profits made during the immediately
preceding financial years as per its CSR policy.

3. CSR Activities:
Activities are defined under Schedule VII of the Companies Act, 2013, which
includes:

1. Eradicating hunger, poverty, and malnutrition.


2. Promoting education, including special education and vocational skills.
3. Promoting gender equality and empowering women.
4. Ensuring environmental sustainability, conservation of resources, and
ecological balance.
5. Protection of national heritage, art, and culture.
6. Contributions to Prime Minister's Relief Fund or any other
government-approved fund.
7. Promoting sports and rural development projects.
8. Support for technology incubators.

4. Implementation Guidelines:
• CSR projects must be undertaken within India.
• Companies can implement CSR activities through:

Direct programs by the company.


Collaboration with registered NGOs or trusts.

• Unspent CSR funds must either be transferred to a specified fund or spent in


the following years, depending on the project’s nature.

5. Reporting and Governance:

• Companies must report CSR activities annually in the Board's Report


and disclose details on spending, implementation, and outcomes.
• Non-compliance (such as failure to spend the required CSR amount)
requires explanation, and penalties may apply.

6. Impact Assessment

• Impact assessment is only mandatory for companies with the mandatory


CSR fund of INR 10 crore, and specific CSR project or program with INR 1
Crore or above.
• Companies can set aside a 2% of the CSR spent or INR 50 Lakh,
whichever is higher, for the impact assessment.
• The impact assessments must be undertaken by an independent agency
(third party agency).
• Impact assessment needs to be done after the completion of one year
since the end of the project. For example, if your CSR project was
completed in April 2020, your impact assessment process for the same
should begin in May 2021.
• The assessment report which will be produced at the end of the process
will be annexed to the company’s annual report on CSR.

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