More companies are now spending more in corporate social responsibility (CSR) and top 100 listed companies have seen a jump of about 25% in their spending in last year, according to a research by IiAS.
Overall spends of S&P BSE 100 companies increased 25% to Rs.65.5 bn, or 1.7% of their three-year average profits. The largest increase in overall spends have been from public sector companies (PSUs): PSUs have increased their spend by 41% to race upto 1.8% of three-year average profits. This year, PSU spends are higher at 1.8% are higher than those of non-PSUs (which are at 1.7%),” the research said.
The government has mandated all Indian companies to spend at least 2% of their last three years’ net profit. According to IiAS research the CSR initiatives and disclosures of the S&P BSE 100 companies reveals that companies are taking their CSR initiative seriously.
Over 60% of the aggregate FY16 spend was made towards the causes of education, and hunger, healthcare and poverty alleviation. Contributions to the Prime Minister’s Relief Fund, and to the Swachh Bharat Campaign aggregated a little less than Rs 4 billion. 48 companies undertook CSR initiatives that were strategically positioned to the core business. Corporate India has, as is innate to its functioning, also begun a serious effort to measure the impact of its spend. 59 of the 100 companies disclosed that they had undertaken an impact assessment, up from 47 companies in FY15. Kotak Mahindra Bank and Federal Bank, for example, run financial literacy programmes. Others, like HDFC Mutual Fund, have a Cancer Cure Fund that uses invests the fund’s capital to generate returns: these returns are matched by the mutual fund and donated to the Indian Cancer Society, the research added.
Some companies like ITC Limited, HDFC Bank, Wipro Limited, and Tata Power Limited, have also adopted more stringent disclosure standards, following the G4 Sustainability Reporting Guidelines and publishing a separate sustainability report, the research said.