In the latest NSE quarterly briefing titled “Statutory CSR Under the Companies Act – Stylized Facts and the Way Forward”, Professor Subrata Sarkar examines the manner in which companies have complied with the provisions relating to corporate social responsibility (CSR) under the Companies Act, 2013.
An executive summary of the briefing is as follows:
– The legal provision mandating CSR expenditure for all listed companies satisfying certain specific criteria came on 30th August 2013 under the Companies Act, 2013.
– An analysis of the first two years of data on CSR expenditures shows that:
– A small number of large, profitable companies account for the bulk of the CSR expenditure;
– Education, health and environmental sustainability together account for about half of the total CSR expenditure;
– Contribution to government relief funds is picking up sharply, perhaps because the smaller companies find it a very convenient route;
– The distribution of CSR expenditure across states is also highly skewed, with Maharashtra accounting for about one-fourth. There are indications that CSR expenditure is relating high in states with high concentration of factors.
– An analysis of these early trends could provide useful insights to review the implementation framework of CSR and fine-tune it in the coming years so that CSR activities can better attain the objectives for which they were designed.