csr in india 20110225 david

8/13/2019 CSR in India 20110225 David

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CSR in IndiaFrom voluntary to mandatory?

February 25, 2011David Karlsson


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Outline

Background

CSR in the CompaniesBill 2009

Whats next?


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Background

CSR traditionally practiced mainly as

philanthropy

Changing conditions call for a more holistic

approach?


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CSR in the private sectorVoluntary Guidelines, December 2009

Core elements;

1. Care for all Stakeholders

2. Ethical Functioning

3. Respect for Workers Rights and Welfare

4. Respect for Human Rights

5. Respect for Environment

6. Activities for Social and Inclusive Development


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business practices that ensures the

distribution of wealth and well-being of

communities in which the business

operates. Salman Khursheed

[ ] large section of the population

remaining as un-included from the

mainstream R. Bandyopadhyay


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CSR in the public sectorGuidelines, March 2010

CSR spending already mandatory for CPSEs

(CSR) is a concept whereby organisations serve

the interests of society by taking responsibility forthe impact of their activities on customers,

employees, shareholders, communities, and the

environment in all aspects of their operations.


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Companies Bill 2009

Revision of Companies Bill from 1956

Some suggestions:

Rotation of auditor/audit firms every five years Restrictions on Layers of Subsidiaries

Capping the number of maximum directorships

Managerial remuneration limits


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Companies Bill 2009

Proposal by the Parliamentary Standing

Committee on Finance (August 2010) Every company having a net worth of70 million or

more, turnover of140 million or more, or a net profit

of0,7 million or more, during a year, shall be

required to spend every year at least 2% of the

companys average net profit during the three

immediately preceding financial years, on CSRactivities of the companys choosing


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Compar ison of Guidelines fo r

Pr ivate/Publ ic secto r CSR spend ing

Profit CSR Spend

70 million 0,5-2%

Criteria CSR Spend

Net worth of>70 million

At least 2%

Turnover of

>140 million

At least 2%

Net profit of>0,7 million

At least 2%

Private companies CPSEs


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Stakeholder consultationsReactions of India Inc.

CSR is about conscience

The issue is on the practical side

No definition of CSRhow to implementand monitor? Consequences for non-

compliance?

Law will be counterproductive


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What does CSR spending mean?

According to voluntary guidelines;

Identification of projects/activities Physichal targets with time frame

Implementation and monitoring


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Whats next?

Revised Companies Bill ready in April?

Clause on mandatory CSR spending likelyto be included

But what will the exact formulation be?

csr in india 20110225 david

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