NEW DELHI (India CSR): The Economic Survey 2024 highlighted the growing role of the corporate sector in social responsibility. In 2014, a new provision under Section 135 of the Companies Act, 2013, made it mandatory for companies to allocate funds to social initiatives. This led to a steady rise in Corporate Social Responsibility (CSR) spending, which increased from Rs 17,000 crore in FY18 to Rs 26,000 crore in FY22.
Unutilized CSR Funds
As the fiscal year ends, companies that haven’t yet utilized their CSR amount must transfer it to a designated fund under Schedule VII of the Act within six months. To ensure meaningful use of these funds, businesses can invest in initiatives like tree plantation projects, which offer multiple benefits. Allocating CSR funds to such projects helps companies comply with regulations and also contribute to a greener environment.
CSR Spending Mandate
This approach aligns with Section 135 of the Indian Companies Act, which mandates that companies with a net worth of Rs 500 crore or more, a turnover of Rs 1,000 crore or more, or a net profit of Rs five crore or more must spend at least two per cent of their average net profits from the last three years on CSR projects.
Tree Plantation Benefits
“Channelising CSR funds towards tree plantation programmes can have a profound impact on the environment. Supporting afforestation efforts can lead to decarbonisation and help reduce the amount of carbon dioxide (CO2) and other greenhouse gases in the atmosphere. Increased vegetation also nourishes wildlife habitats, improves biodiversity, augments groundwater recharge, mitigates climate change and also creates employment opportunities, particularly for underserved rural and tribal communities ,” says Mr Pradip Shah, co-founder of Grow-Trees.com.
Effective CSR Utilization
According to him, for companies looking to meet their CSR obligations before the March 31 deadline, partnering for afforestation ensures effective fund utilisation, adherence to regulations, and long-term impact. The companies can also obtain a fund utilisation certificate, ensuring full compliance with CSR regulations through such collaborations. These partnerships also align with UN Sustainable Development Goals (SDGs), reinforcing the company’s environmental commitments.
Strengthening ESG Goals
Meanwhile, from a company’s perspective, investing in green CSR projects highlights its commitment to Environmental, Social and Governance (ESG) goals, strengthening its reputation among investors, customers, and employees. It also allows businesses to make meaningful use of their year-end budgets, by contributing to a healthier environment as well as community development.
(India CSR)
