There Now…Gone Now…Sustainability in CSR Regulation in India

Abstract

As per the Companies Act of 2013, CSR initially included pursuit of shared value including sustainability by business but the eventual rules that were notified omitted reference to shared value and with that, sustainability. This chapter discusses the background to the omission and focuses attention on the meanings of CSR and sustainability in Indian regulation and policy. It argues that Indian regulation has from the beginning used a dual meaning approach by referring to more domestic notions of philanthropy and community development along with global notions of shared value. The omission of shared value needs to be interpreted in the light of developments for reducing fiscal burden on the nation and the need to create an alternate source of funds for the social sector.

Appendices

Exhibit 1: List of Activities as Specified in the Text of CSR Guidelines for CPSEs

(List is indicative and not exhaustive)

• 1. Drinking Water Facility

• 2. Education

• 3. Electricity Facility

• 4. Solar Lighting System

• 5. Health and Family Welfare

• 6. Irrigation Facilities

• 7. Sanitation and Public Health

• 8. Pollution Control

• 9. Animal Care

• 10. Promotion of Sports and Games

• 11. Promotion of Art and Culture

• 12. Environment friendly technologies

• 13. Promotion of livelihood for economically weaker sections through forward and backward linkages

• 14. Relief to victims of Natural Calamities like earth-quake, cyclone, drought and flood situation in any part of the country

• 15. Supplementing Development Programmes of the Government

• 16. Non-conventional Energy Sources

• 17. Construction of Community Centres/Night Shelters/Old Age Homes

• 18. Imparting Vocational Training

• 19. Setting up of skill development centres

• 20. Adoption of villages

• 21. Taking action on points suggested by Ministry of Forest and Environment pertaining to Charter on Corporate Responsibility for Environment Protection for 17 categories of industries

• 22. Scholarships to meritorious students belonging to SC, ST, OBC and disabled categories

• 23. Adoption/Construction of Hostels (especially those for SC/ST and girls

• 24. Skill training, entrepreneurship development and placement assistance programmes for youth

• 25. Building of Roads, Pathways and Bridges

• 26. Entrepreneurship Development Programme

• 27. Disaster Management Activities including those related to amelioration/mitigation

• 28. Activities related to the preservation of the Environment/Ecology and to sustainable Development.

Exhibit 2: List of CSR Activities as Prescribed in SCHEDULE VII of Companies Act 2013

Activities relating to:

• (i) Eradicating extreme hunger and poverty;

• (ii) Promotion of education;

• (iii) Promoting gender equality and empowering women;

• (iv) Reducing child mortality and improving maternal health;

• (v) Combating human immunodeficiency virus, acquired immune deficiency syndrome, malaria and other diseases;

• (vi) Ensuring environmental sustainability;

• (vii) Employment enhancing vocational skills;

• (viii) Social business projects;

• (ix) Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women; and

• (x) Such other matters as may be prescribed.

Exhibit 3: Text from Notified Rules for Implementing CSR, Dated 27 February 2015

“Corporate Social Responsibility (CSR)” means and includes but is not limited to:

• (i) Projects or programmes relating to activities specified in Schedule VII to the Act; or

• (ii) Projects or programmes relating to activities undertaken by the board of directors of a company (Board) in pursuance of recommendations of the CSR Committee of the Board as per declared CSR Policy of the company subject to the condition that such policy will cover subjects enumerated in Schedule VII of the Act.

Exhibit 4: Notification of Activities as per Amendments to the Schedule VII Companies Act 2013, dated Feb 27, 2014

• 1. Eradicating hunger, poverty and malnutrition, promoting preventive healthcare and sanitation and making available safe drinking water.

• 2. Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects.

• 3. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans, setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups.

• 4. Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water.

• 5. Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art, setting up public libraries, promotion and development of traditional arts and handicrafts.

• 6. Measures for the benefit of armed forces veterans, war widows and their dependents.

• 7. Training to promote rural sports, nationally recognised sports, Paralympic sports and Olympic sports.

• 8. Contribution to the prime minister’s national relief fund or any other fund set up by the central government for socio-economic development and relief and welfare of the scheduled castes, the scheduled tribes, other backward classes, minorities and women.

• 9. Rural development projects.