CSR and the Decade of Action
To review and refresh the nuances of the Act, amendments and notifications and also the proposed amendments to the CSR Rules, MMA organised a conclave in association with CSR Spark and Konrad-Adenauer- Stiftung on the theme “CSR and the Decade of Action” on Saturday, 19 December 2020 at MMA Management Center. The conclave had the following broad objectives:
To learn the intricacies of the CSR Law and the proposed amendments.
To develop insights on Greater Compliance, Transparency and Stronger Governance of International Agensies (IAs).
To prepare for the “Decade of Action,” mapping of SDGs with Schedule VII and orienting CSR interventions towards attainment of goals.
Mr Nagahari Krishna, Director, Danfoss Industries Pvt Ltd delivered the welcome address. In his opening remarks, he was happy to note that many companies are doing much more than what is stipulated in the mandatory CSR provisions of Companies Act 2013. He suggested that the annual CSR spend of companies must be channelized such that the 17 sustainable development goals (SDGs) can be met in a progressive way.
The Chief Guest Mr N K Ranganathan, Grundfos Water Ambassador, Grundfos Pumps India Pvt Ltd gave away the prizes to the winners of various competitions held in connection with the 19th MMA All India Student Convention 2020.
During his address, Mr Ranganathan underlined the need for companies to map their CSR activities to UN’s SDGs so that they are on the right track. “As it is practically difficult for a company to focus on all the SDGs, they pick and choose SDGs which are dear to them and pursue them in their CSR activities,” he said.
He also emphasised the need to have proper measurements of what have been achieved. “That which cannot be measured, cannot be implemented,” he stressed. He cautioned that inequalities in society will lead to unrest and so, we need to instill hope in people. He added that we need leaders who are accountable and suggested that we need to make use of traditional knowledge in our best practices and in policy making. He listed out the initiatives taken by his company in the areas of water, energy and people.
Mr R S Krishnaswamy, Founder and Chief Parton, CSR Spark and Dr R Sujatha, SDG Associate Government of Tamil Nadu and Honorary Director, Karupa Institute of Development Initiative (KIDI) were the distinguished speakers in the conclave.
Dr Sujatha remarked that the ‘Decade of Action,” started with the pandemic, which has forced us to work in the New Normal in a more sustainable way. She gave an overview of the transformation from MDGs to SDGs. “The MDGs were mostly mandates for the government. But SDGs require action by different players,” she said and listed out the reasons as to why we should implement the SDGs.
She pointed out that the 4th SDG should have been achieved by 2020. But due to Covid, it has taken a backseat.
She explained why India plays a crucial role to the success or failure of SDGs. India, she said, has 169 targets focussing on global change, ending poverty, protecting the planet and ensuring prosperity. “India has 306 indicators and Tamil Nadu Government has 314 indicators,” she noted and added that this flexibility in fixing the number of indicators was not available with MDGs.
She outlined what Corporates can do as part of CSR and presented the status of Tamil Nadu with respect to the SDGs. She concluded saying that each goal is important and that they are all interconnected. She remarked, “A committed group of people can make the change happen. This conclave by MMA-KAS is a great initiative to accelerate SDGs and CSR.”
LEVERAGING CSR DURING THE DECADE OF ACTION
R S KRISHNASWAMY
The United Nations, in its endeavour to make the world a better place to live in, adopted the Sustainable Development Goals (SDGs) in 2015. These global goals came into effect from 1 January 2016 and are aimed at eradicating poverty and hunger, protecting the planet, and enabling the people to live in peace and prosperity by the year 2030. The 17 SDGs can be grouped under 5Ps—People, Planet, Prosperity, Peace and Partnerships. The SDGs come with 169 targets and 230 indicators for monitoring the progress towards the goals.
After five years of the SDGs, we enter “The Decade of Action,” during which we are to mobilise everyone everywhere, demand urgency and ambition, and design new innovations and solutions so as to leave no one behind during these ten years that we have to transform the world.
International agencies (IA) and Governments are already working towards the goals. Meanwhile, businesses have also been recognised as vital partners. With the mandating of the CSR law in our country, it is appropriate that all activities under Corporate Social Responsibility be leveraged to further the attainment of the Global Goals during The Decade of Action.
Against this backdrop, it is pertinent that we focus on the following aspects:
1. The performance of CSR during the first five years, for which data is available on the portal http://www.csr.gov.in
2. Bottlenecks in CSR implementation
3. Latest amendments to the CSR law
4. Available Government infrastructure that can be utilised
5. Leveraging of CSR to converge with the Government programmes
6. Impact of convergence.
1. PERFORMANCE OF CSR
CSR in itself is a standing example for Goal 17 of the SDGs. It is a partnership amongst the Beneficiaries, the Corporates, the Implementing Agencies and the Government. The Government on its part has been mandating and monitoring the activities under CSR, the Corporates have been enthusiastically delivering CSR programmes through the vibrant Implementing Agencies, and the Beneficiaries are ensuring the sustainability of the CSR programmes.
The total cumulative spend over the first five years has been around 71,000 crores, with around 25,000 companies executing CSR programmes during the FY 2018 – 19. There is a provision to transfer the CSR spend to designated funds. Yet, it is heartening to note that more than 90% has been actually spent on activities spread over various sectors. Such activities have been undertaken either directly or through their own foundations or through IAs. The intent of the CSR Law has been well understood.
2. BOTTLENECKS IN CSR IMPLEMENTATION
We have to identify the shortfalls and take steps to improve the CSR environment, if we contemplate leveraging of CSR activities to converge with the Government programmes.
a) With the divergent sectors and wide geographical spread, it is pertinent to have strong and robust IAs, who are knowledgeable, compliant and have the requisite capacity to implement the programmes. Weak IAs deter the easy implementation of CSR programmes.
b) There is a lack of a proper forum to identify projects and suitable beneficiaries who could help to implement and sustain the programmes.
c) While intervening in public areas like lakes and government-run schools, for example, there is difficulty in obtaining fast-tracked permission from the authorities concerned.
d) A huge inequality in sector-wise and geographical areas can be observed.
e) There is always a trust deficit amongst the key players in CSR.
f) Mismatch of Schedule VII of the CSR Law with the SDGs should be addressed.
While seeking to address these bottlenecks, we must delve into the available government infrastructure, which can be utilised to leverage CSR to promote the Global Goals.
3. LATEST AMENDMENTS TO THE CSR LAW
The Ministry of Corporate Affairs has been continuously fine-tuning Section 135 of the Companies Act 2013 along with the Rules and Schedule VII associated with CSR. An update of amendments to Schedule VII can be viewed here.
The rules have been amended on 22.01.2021 as per notification on The Gazette of India. Salient features in this amendment are:
a) Inclusion of spending on research on new vaccine, drugs and medical devices related to COVID 19 for three FYs.
b) Overseas training of sports persons has been permitted.
c) Criteria for international organisations has been spelt out.
d) Clarification on “on-going projects” is available.
e) Form CSR-1 has been introduced for all implementing agencies to register online and obtain a unique CSR Registration Number.
f) There are more details on unspent and excess-spent CSR funds.
g) G0 Impact Assessment has been included for large CSR spends.
4. EXISTING GOVERNMENT INFRASTRUCTURE
Our country has a well-established infrastructure system that has been performing wonderfully.
a) The Panchayati Raj system is prevalent throughout the country and forms the foundation for our democratic set-up. Four Gram Sabhas are convened on Jan 26, May1, Aug 26 and Oct 1 annually. These are organised to discuss Gram Panchayat Development Plans for local economic growth, optimum utilization of funds available with Panchayati Raj Institutions, clean drinking water and sanitation, role of women in village and rural development, and social inclusion.
b) NGO Darpan is facilitated by Niti Aayog. It is an interface between several Government Departments and Voluntary Organisations (VOs).
c) Voluntary Organisations (VOs) are required to register online with NGO Darpan and obtain a Unique Identification Number (UID). Departments do spend on social initiatives through VOs registered with NGO Darpan. There is also a National Policy for VOs, rolled out in 2007. More than a lakh VOs have registered here.
d) Niti Aayog is the custodian for the SDGs. It works on spreading awareness, monitoring progress through a set of indicators, providing support at the state and district levels through designate cells, and monitoring dashboards.
e) The Transformation of Aspirational Districts Programme aims to create a homogenous development in all districts across the nation. Niti Aayog, under the guidance of the Prime Minister launched the Transformation of Aspirational Districts Programme (TADP) in January 2018. 115 districts were chosen across 28 states for this programme, which hinges on three basic principles of Convergence, Collaboration and Competition. Another nine districts were later added. The programme aims to transform the selected districts within the shortest period of time possible, through a mass movement.
5. LEVERAGING CSR TO CONVERGE WITH GOVERNMENT PROGRAMMES
The Government is the major spender in the social sector. The four major players in CSR are the Implementing Agencies, the Beneficiaries, the Corporates and the District Administration. Convergence of these players will result in effective leveraging of CSR towards attainment of the Global Goals. Each player has his own role to play within the available government infrastructure (the table below lists these roles). If this model is successful, all bottlenecks in CSR will be removed and a favourable climate will prevail, wherein CSR will contribute immensely to the goals.
Though this suggested model does not exist now, Corporates and IAs can take this forward in districts where they are operational with the support of the District Collector. The impact of such an initiative will be huge and will help in transforming the world, making it a better place to live in during “The Decade of Action”.
6. IMPACT OF CONVERGENCE
The effect of converging CSR activities with Government social initiatives and leveraging the existing infrastructure will create an impact as follows:
• Contribution of business to SDGs
• Localising SDGs and better awareness
• Documentation of projects – useful for replication and scaling up
• Availability of quantum of CSR spend in districts
• Removal of trust deficit – enabling partnerships
• Responsible and robust implementing agencies
• Monitoring of projects and integration of data on SDG dashboard
• Impact at grass root level – Gram Sabhas
• Beneficiary connect and sustainability
The National CSR Portal http://www.csr.gov.in has been recently updated with CSR results for the FY 2019 – 20 and the figures look dreadful as on date. The CSR spend has reduced from 18,655 crores the previous year to 7,823 crores. Let us hope that more data will be added for the FY 2019 – 20, which will give us a more encouraging picture.