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Subhash mittal
1. Presentation at E&H Conference, Saharanpur, UP
25 October 2013
Findings of CSR Study
& Role of CSR in UP
By Subhash Mittal, FCA
Secretary, Socio-Research & Reform Foundation
E-mail: socio-research@sma.net.in
2. Background to the Report
Desire to learn about CSR, before talking about it.
Huge interest one saw in CSR - from civil sector, from
industrialists, from academicians.
Very little hard facts available on CSR in the country
A desire to promote CSR in a manner that it becomes a
sustainable and effective instrument by creating a win-win
situation.
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
3. Scope
Arrive at scope of CSR Interventions in terms
of funding
Identify popular sectors for CSR intervention
Identify methodology of implementation
Additional scope
Assess transparency in the sector and develop
measurement tools for the same
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
4. Methodology
Discussing ToR with various stakeholders
Understand the sector by discussing it with Industry & Sector
representatives
Participate in discussion groups on CSR to develop better
understanding
Prepare list of top 100 corporates by turnover (List as per ET500)
Undertake study of individual company’s Annual Reports, Business
Responsibility Report and CSR Reports
Develop matrix tables for capturing critical information, which is
comparable
Data captured is properly documented for subsequent verification
Ensure sufficient checks for all data captured
Summarise and analyse the results
Prepare a report
Disseminate the results through public platforms
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
5. Evolution of CSR
Traditionally CSR undertaken by city seths through
dharmshala, pios, etc. ~ based more on religious
sentiments
Gandhiji’s call for ‘Trusteeship’ was an important part of
evolution of CSR in country.
Several industrialists of this era have contributed to
welfare (GD Birla, Jamanalal Bajaj, Sarabhai, Murugappa
Group, to name a few)
Institutions like BITS Pilani, IIM Ahemdabad, Physical
Research Lab, Shri Ram College, etc are all result of
initiatives of industrialists
50s -70s was lull period for CRS
Huge growth in CRS since the industrial growth has
picked up
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
6. Legal basis of CSR
Private sector
Presently no legal requirements though corporates try to
provide 0.5% -1.5% of their PAT for CSR. Even lossmaking companies contributing.
Clause 135: CSR mandatory for organisation satisfying
any of three conditions:
Minimum Turnover Rs 1000 crore, or
Networth Rs 500 crore, or
Net profit in any financial year Rs 5 crore or more.
Mandatory 2% CSR, CSR Committee (3), Board
accountable for ensuring mandatory spending otherwise
explain through Directors’ Report
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
7. Legal basis of CSR…………….cont’d
Board to formulate policy to indicate activities to be
undertaken. Presently permitted activities covered
under Sch VII.
Eradication of extreme Hunger & Poverty
Education
Women Empowerment
Child Mortality & Maternal Health
HIV, Malaria & other diseases
Environment Sustainability
Skill Enhancement
Social Enterprise projects
PM / CM or similar other Relief funds
Give preference within vicinity of the operational area
Board to monitor
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
8. Legal basis of CSR…………….cont’d
PUBLIC SECTOR:
Central Public Sector Enterprises need to provide
for as follows:
Less than Rs 100 cr Profit
Rs 100 cr – Rs 500 cr
Above Rs 500 cr
: 3%-5%
: 2% -3%
: 1% - 2%
CSR amount once allocated would not lapse
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
9. Major Findings - Spending
CSR Contribution of top 100 corporates comes
to around 0.82% of PAT, which comes to Rs
2650 crores.
Biggest CSR spending (in absolute terms) by
Reliance Industries
Coal India
Tata Steel
SBI
ONGC
Rs 357 crores
Rs 151 crores
Rs 146 crores
Rs 123 crores
Rs 121 crores
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
10. Major Findings - Spending
No. of Companies
CSR Spending as % of PAT
31
35
27
30
25
17
20
11
15
10
8
6
5
0
Categories - % of PAT
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
11. Sector – wise Spending
Sector-wise CSR Interventions
100
No. of Compnaies
90
80
70
60
50
40
86
78
30
44
20
53
60
47
29
10
0
16
Education
Health
Skill Enhancement
Livelihood & Financial
Inclusion
Environment
Women Empowerment
Disaster Relief
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
7
Sports
Others
12. CSR Projection
Anticipated CSR Contribution (in crores)
Anticipated CSR Contribution as per new Companies Act
7000
6279
6000
5000
4000
3000
76%
2000
939
1000
11%
0
1 to 100
101 to 200
512
302
199
6%
4%
2%
201 to 300
301 to 400
401 to 500
Category of Companies as per ET-500
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
13. Implementation Strategies
Larger CSR programmes are undertaking wider
approach
Infosys works in education in large number of areas
Reliance is undertaking large number of programmes
through different parts of the countries
Banks work for financial inclusion through their
branches
A large number of CSR programmes interventions
are around factories / units (Hero)
Nasscom aligns with its core strength – IT
NIIT has evolved a novel method – low cost IT
education
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
14. Partnering with NGOs
Implementation Methodology
No Information, 9
Foundation only,
11
Foundation plus
NGOs, 47
NGOs only, 33
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
15. Model developed to measure
Transparency in CSR
Has company disclosed CSR contribution
for the year ? (3)
Has company distinctly disclosed activities
undertaken during the year ? (3)
Does it prepare Business Responsibility
Report ? (2)
Does it disclose a CSR strategy ? (1)
Are CSR activities disclosed on web? (1)
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
16. Transparency relating to CSR
47 cases CSR amount has not been disclosed
No distinct information about 32 cases what CSR activities
undertaken during the year
Even among 68 cases where we have taken CSR information
for the year as available, one would need to put in great effort
to decipher this.
Study has developed a CSR Transparency Index. We hope this
will help in improving disclosure of CSR.
10 out of 10
22 companies
5 or less out of 10
53
2 out of 10
5
1 out of 10
7
0 out of 10
4
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
17. Scenario within ‘UP’
Huge need considering 33% of
population falls within 6-18 age
group
Another 13% fall in 0-5.
Large funds available with the Govt
for Education sector.
FY 2013-14 allocations
- State education allocation Rs 32886 cr
- SSA allocation almost Rs 9000 cr
- per capita allocation of Govt funds vis-à-vis
population segment of 6-18 is around
Rs 6339
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013
18. Main Issues to be considered
CSR has potential to evolve into a major source of
development intervention.
Education & Health are two major areas of intervention of CSR.
Need to develop an integrated approach involving Govt, CSOs
and CSRs.
There is a need to develop mechanism to support CSRs in
identification of credible CSOs.
Developing a genuine Partnership Framework between a
corporate & CSO.
Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013