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Draft Reporting Guidelines for Corporate Social Responsiblity

 

Introduction

In the year 2013, the Companies Act was revised to make CSR spending and reporting obligatory (Section 135, Sub-section (1) and (2) & 469 of Companies Act 2013 & CSR Rules, 27th Feb, 2014) for the companies. The CSR norms require companies with -- a net profit of 5 crore or more, turnover of 1,000 crore of more or a net worth of 500 crore or more, to spend at least 2 per cent of their average net profits made during three (3) immediately preceding financial years on activities for social development. Companies have been reporting their CSR performance for the past two years. A large number of these companies could not fulfill or have partially fulfilled the minimum 2 per cent criteria for the financial year 2015-16.

Some of the major reasons for this shortfall are:

  • Poor understanding of the social needs of varied communities

  • Inadequate infrastructure and implementation capability within the organisations

  • Poor connect between mandated areas under CSR Rules 2014 and Business Continuity

  • Low or no value addition to business or community

 

Intent

Recognising the need for a responsible and uniform reporting standard, CSE intends to set-up a committee to deliberate on the issues of improved CSR performance of the companies with visible value addition to community and business, and develop comprehensive CSR reporting guidelines. The key objectives of these guidelines are:

  • To improve accountability of and transparency in CSR spending

  • To guide the CSR implementing agencies in improving CSR Governance

  • To assist in capturing impacts of CSR on community and business - making it measurable & comprehensive

  • To standardise CSR reporting

  • To encourage learning from each other's CSR reporting

  • To encourage disaggregated CSR spending and reporting on issues of environment, gender, disadvantaged communities and alike

The CSR Reporting Guidelines are to be designed to be applicable to all companies in India, i.e. for large, medium and small companies. The CSR Report should necessarily cover the following:

  • Organisational Background

  • CSR Governance Structure

  • Stakeholder Consultation

  • Drivers for sustainability

  • Criteria for prioritising CSR Activities

  • Disaggregated data on CSR spending

  • Allocations as per Schedule VII

  • Details of CSR implementing agency

  • Portfolio of CSR Activities and details of implementation

  • Status of Implementation of CSR Activities:
    • Brief description and current status of projects
    • Geographical distribution of projects
    • Budget allocated and actual expenditure
    • Targeted communities -- their socio-economic situations
    • Outcomes of implementation of CSR Activities (Tangible and Intangible) 

  • Key learnings during reporting period

  • Way forward

 

For inputs and suggestions, kindly contact

Vikrant W.,
Programme Officer, Impact Assessment
Email - vikrant@cseindia.org
Phone - +91-11-2995 5124 / 6110 (Ext. 204)

 

 

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