Section 135 of the Companies Act, 2013 is a landmark legislation for India, mandating compliance on certain provisions around spending and reporting on corporate social responsibility (CSR) activities. In doing so, the law formalises companies as a critical stakeholder in the nation’s development. Two years after the law was introduced, stakeholders including companies, social organisations, foundations and the government are optimistic about the potential impact that the law can bring about in the development space.
With support from The Rockefeller Foundation, Samhita undertook a landmark study, to ascertain the current state of play of CSR, key challenges and opportunities and the ‘calls-to-action’ that can make the vision of the act a reality.
The report, ‘Transforming India: The CSR Opportunity’, was launched on August 2, 2016, at the National Stock Exchange in Mumbai. Over 150 decision makers from around 46 companies, 25 NGOs and 13 other sector stakeholders including foundations, consultants and aid agencies, convened to reflect on the opportunity presented by the CSR law for the development sector, and develop actionable ideas for effective CSR initiatives.
At the event, Deepali Khanna, Director – Smart Power for Rural Development at The Rockefeller Foundation, said that the CSR space has reached an inflection point. Stating the need for companies to explore less popular causes, she illustrated how investing in off-grid energy initiatives, a cause espoused by The Rockefeller Foundation, could usher in transformative change. She said, ‘While CSR has focused on causes such as education, sanitation and healthcare, other causes have been neglected possibly due to lack of awareness or a perception that they are risky. Companies could play a role in different aspects of off-grid energy, investing in capital expenditure, livelihood models, facilitating innovation and so on.’
Panel 1: Collaborating for Greater Impact
The first panel leveraged the experiences of three partnerships within CSR, to showcase best practices and present roadmaps for future collaboration. It was moderated by Luis Miranda, Former Chairman, IDFC Private Equity and Managing Trustee, Collective Good Foundation.
- Kunal Kumar (IAS), The Pune Municipal Commissioner and Ganesh Natarajan (Chairman, Pune City Connect and Chairman, NASSCOM Foundation) showcased Pune City Connect, a platform for companies, and government to collaborate on key issues in and around the city of Pune
- Sandhya Venkateswaran (Deputy Director, Bill & Melinda Gates Foundation) and Manisha Bhinge (Senior Manager – Partnerships, Tata Trusts) showcased their collaboration which combined Tata Trusts’ pan-India presence and community engagement prowess with BMGF’s global perspective and robust internal mechanisms
- Ravi Bhatnagar (Manager External Affairs – Reckitt Benckiser) and Priyanka Kaul (COO, Special Projects NDTV) showcased their collaboration around Dettol – Banega Swachh India, a hygiene and sanitation campaign aligned to the Indian Government’s Swacch Bharat (Clean India) Mission
Setting the tone for the panel, Kunal Kumar, Pune Municipal Commissioner spoke of the need for facilitators to enable collaboration through frameworks, knowledge sharing and effective communication channels. He said, ‘There is information asymmetry among the government, academics and CSR practitioners, and a mechanism for collaboration is required for such parties to work together and achieve greater impact.’ He highlighted the example of Pune City Connect, chaired by co-panellist Ganesh Natarajan, a collective of companies which engages the Pune Municipal Corporation to address key issues in the city of Pune.
Continuing with this train of thought Ms. Venkateswaran of BMGF added, ‘Our resources are a miniscule amount vis-à-vis challenges that we want to address. Unless we collaborate, we cannot make a big dent in the development space.’
Panel 2: Demystifying the CSR Law
In the second panel, Nishith Desai, founder of Nishith Desai Associates, engaged key decision makers from India’s leading companies in ‘Demystifying the CSR Law’. The discussion revolved around two key themes – challenges faced by companies in implementing CSR, and the changes that companies would like in the CSR law and related regulations like the Foreign Contribution (regulation) Act (FCRA) and the Lokpal Act. The panel featured:
- Pearl Tiwari, President, CSR and sustainability, Ambuja Cements
- Anirban Ghosh, Vice-President, Group Sustainability, Mahindra and Mahindra
- Deepak Arora, CEO, Essar Foundation
- Shankar Venkateswaran, Chief, Tata Sustainability Group
- Mayuri Misra, Assistant Director of Learning and Development at the National Foundation for CSR, Indian Institute for Corporate Affairs brought in the Government’s perspective on CSR
‘There are significant changes required in legislation to ensure high performance of CSR, for example in the Foreign Contribution (regulation) Act, and the CSR law. This includes adding the provision to partner with social businesses in addition to non-profits’, said Mr. Desai.
The panellists also emphasised the need to align CSR with business to truly realise the intent of the CSR law and implement sustainable programmes. Mr. Venkateswaran of Tata Sustainability Group, indicated that CSR was a subset of the sustainability efforts of any company. Pearl Tiwari believed that many of Ambuja Cements’ CSR efforts feed back into the efficiency and sustainability efforts of their business practices.
The study found strong intent to use the CSR law as a means of bringing about a transformation in the social development status of the country. The event built upon key findings of the report and facilitated further dialogue around building the foundations required to take advantage of the CSR opportunity. Samhita and The Rockefeller Foundation will now engage companies and other stakeholders to address key challenges arising from the study.
You can read the report here. A detailed summary of the event will be made available soon.