How India Inc can make their CSR spends count

How that the new Companies Bill has mandated that organisations of a certain financial strength spend 2% of their net profit on corporate social responsibility(CSR), two things are likely to happen right away. First, the general spend on development projects will shoot up, with more companies having to set aside funds for this. 

And second, with the government keeping tabs, companies will have to become more transparent about what they are investing in, how and where. Only a handful of companies meet the 2% criterion (or come close) as of now. Fewer still have well-structured, sustainable and far-reaching CSR programmes. But here’s a thought: as they up the ante – and their budgets – for social sector activities, companies might want to pause and think about the best way to make their CSR spend count.

India Inc has gone from chequebook philanthropy and backing causes on a whim to spending more (and in different ways) on stakeholders, be it customers or employees, or rural and semi-urban populations affected by the setting up of factories in their neighbourhoods.

“It’s good to be engaged with people who live in and around your plants, but companies need to look beyond their business interests,” says Amita Joseph, director of the Business and Communities Foundation. “If companies aspire to be national and global entities, their reach [in the social sector] must also be national and global.” Industry gets so many incentives from the government, she adds, that surely companies can have more responsible practices in place.


Some companies are looking beyond their operational imperatives. Thermax, for example, didn’t feel the need to focus on environment and alternative energy (a popular CSR plank) because it is already involved with solar power, wastewater treatment and reducing carbon footprint as part of its business. “We didn’t want to link our CSR activities to our work,” says Manabedra Nath Sanyal, manager, outreach programmes. “We wanted to look at areas completely de-linked from our business, like education and skill-building.”

How India Inc can make their CSR spends count

As Thermax BSE 0.06 % director Anu Aga puts it: “There are enough causes staring at us in India, like malnutrition, women’s empowerment, rural development and even city planning. I can’t think of a single area where we cannot contribute.” Thermax, which spends about 3% of its net profit on CSR activities, has invested Rs 24 crore on education and other development projects in the last six years, says Sanyal.

As part of the affirmative action programme of the Confederation of Indian Industry (CII), an industry grouping, Thermax looks to increase the employability of youngsters from marginalised communities by arming them with the soft skills they might need to land a job. Of the 500 people trained under the affirmative action programme so far, most already had the requisite academic qualifications and domain knowledge; what they needed was help with personality development, knowing how to interact and work with colleagues, the confidence to max interviews and be more ‘job-ready’.

Thermax tied up with Pune’s English Language Training Institute of Symbiosis to create 60-hour modules administered as a crash course to the students on weekends, and also found placements for most of these youngsters. “There are certain sections of people who are deprived of opportunities or are unable to express themselves properly,” says Sanyal. “Our ‘finishing school’ model helps them develop these skills.”

The company has also partnered with voluntary organisations and the Pune municipal school board to operate after-school centres for students from civic schools to learn English, science and mathematics. Since 2007, the company has been running three Englishmedium schools, and supports a fourth. “The groups we target through our CSR activities are not related to our business practices,” says Ag


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