Education: India Inc's favourite area to invest CSR funds in

Mumbai: With corporate social responsibility(CSR) becoming a legal mandate, a study has found that a largemajority (81 per cent) of domestic companies identifyeducation as the top core area for their sustainabilityactivities.

Three out of four domestic companies already have a coreCSR team in place or plan to have one in the next couple ofyears, while 58 per cent of them have an annual centralisedbudget for sustainability activities, says a survey conductedby Mercer, a global consulting leader in talent, health,retirement and investments.

“Among the CSR activities education tops the chart with 81per cent adopting this as their mandate, followed by 64 per cent focusing on community-based developmental activities and 61 per cent adopting environmental sustainability within their
own companies,” says the Mercer survey.

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[caption id=“attachment_108452” align=“alignleft” width=“380”]  AFP image[/caption]According to the findings, as much as 78 per cent conduct their CSR by partnering with a local, independent NGOs, and only 17 percent work with their own NGOs.

As part of its law-based affirmative action, the previous UPA government had included a clause in the Companies Act of 2013 which mandated a compulsory two per cent of a company’s net income being spent on CSR.

The recent survey was conducted among top 40 companies and found that 81 per cent of the polled companies feel that CSR is an extremely important component for business strategy.

The survey has found 17 per cent have been running CSR activities even before the law mandated them to do so, while 10 per cent of respondents do not undertake any CSR activities.

Of those conducting CSR activities, 54 per cent have a CSR/sustainability policy for a period of up to five years and 46 per cent have CSR policy of longer period.

“With dedicated CSR teams in place and companies stating that employee volunteering will be involved in their corporate citizenship projects, India is surely striding in the right direction down the sustainability path,” says Mercer India business leader Shanthi Naresh said.

The survey also finds that unlike their global peers, more (44 per cent) of the polled domestic firms have dedicated CSR teams in place, while the global average is only under 25 per cent. Again, 90 per cent of these companies hold HR responsible for CSR against the global average of 69 per cent.

But when it comes to reporting on CSR, domestic companies lag with only about one-third of them issuing an integrated annual report on their CSR activities compared to the global average of nearly 50 per cent.

On CSR spends, the survey finds that the budget ranges from Rs 9,00,000 to Rs 25 crore per annum with the average being Rs 5,8,128,571, which is more than double the median of Rs 2.5 crore, Mercer regional CSR head Cindy Arkin said.

Banks and financial institutions lead in having a centralised CSR budget with their average annual budget of Rs 4.5 crore, while the highest budget of Rs 25 crore has come from the IT sector.

PTI