Why and How of working on CSR in India Evolution of CSR legislation in India Benefits of doing CSR - Design | Innovation | Sales Implementation | Challenges Reporting | Monitoring of CSR Strategy

1. WHY & HOW CSR?
S PARADIGM CONSULTANTS
WWW.SPARADIGM.IN
2014

2. QUESTIONS??
Is CSR a new Fashion Statement for Corporate??
How to get buy-in for CSR Policy | Investment from C-Suite??
Is it Mandatory to comply with Regulation??
Does it help my Brand or Reputation??
Will it help increase revenues | sales | profits??
Will my Stakeholder | Board | Investor recognize my CSR??
Will it help in recruitment –company brand value enhanced??

3. CSR EARLIER
Arthashashtra & Mahabharata spoke about community
Adoption of Mahatma Gandhi Theory of Trusteeship of wealth
Spirit of Giving progressed from Charity to Philanthropy
From Institution Building to Community Development
Regulatory Compliance
Triple Bottom Line Approach –People |Planet Profit
Accountability & Responsibility
CSR is now STRATEGIC

4. CSR NOW
Careful intervention for marginalized communities, builds positive social change
Strategic investment in CSR helps build corporate reputation
CSR 3.0 is now STRATEGIC –moved from Philanthropy (1.0) to Regulatory Compliance (2.0) to Strategic Investments NOW (3.0)
It’s about Capacity Building for Sustainable Livelihood
CSR address Stakeholder & Shareholder alike
CSR 3.0 is serious business –involved large sums of money, compliance & reputation

5. BENEFITS OF DOING CSR
Helps build Corporate Reputation
Leads to Product Innovation | Cost-Savings
Better Employee | Customer Engagement
Brand differentiation| Improved positioning
Handling negative press due to good CSR –e.g.: Tata Group
Examples that showcase benefits of CSR:
http://youtu.be/E0NkGtNU_9w
http://onforb.es/1jkATmC
http://bit.ly/1wBN02o
http://bit.ly/1twFacu
http://bit.ly/1xuXNvp

6. MERCER STUDY ON INDIA CSR
Highlights from survey conducted across 40 organisations:
73% employers stated they have a CSR | Sustainability Policy in place
17% which are undertaking CSR activities do without clear guidelines
10% of respondents don’t undertake CSR
81% companies consider education as the top core area for CSR activities followed by 64% on Community-Based Development & 61% on Environmental Sustainability
75% feel that CSR has become more important at their company over the past two years
81% feel that it is an extremely important component for business strategy
83% CSR budget is for value creation | 73% for Brand & Reputation Management | 69% for Employee Engagement
44% Indian firms have dedicated CSR team as against 30% globally
One-third of Indian firms issue an integrated annual report on their CSR activities
Biggest challenge is to quantifying the business value of CSR/sustainability initiatives
78% partner with independent NGO & 17% work with in-house NGO to conduct CSR
25% integrate Social & Environmental priorities into business models to generate value

7. HISTORY OF INDIAN CSR LEGISLATION
CSR discussions started in 1965-66
First guidelines on CSR in December 2009by Ministry of Corporate Affairs
Dept. of Public Enterprises Guidelines came in April 1st, 2010
National Voluntary Guidelines (NVG) came in July 8th2011
Bill Passed by Lok Sabha on Dec 18th2012 | Rajya Sabha on Aug 8th2013
Notified by Gazette of India on Aug 30th2013
Objective: Promote Good & Responsible Corporate Governance
STILL IT IS VOLUNTARY ACT WITH ACCOUNTABILITY & RESPONSIBILITY
Ministry of Corporate Affairs notification of CSR -http://bit.ly/MKJvFb

8. APPLICABILITY
Firms who satisfy any one of three conditions:
Net worth of Rs. 500 crore or more ($100 million USD) during any financial year
Turnover of Rs 1000 crore or more ($200 million USD) during any financial year
Net profit of Rs. 5 crore or more ($1 million USD) during any financial year
EnhancedApplicability:
Holdingorsubsidiarycompany;
Foreignfirmdefinedunderclause(42)ofSection2oftheActhavingitsbranchofficeorprojectofficeinIndiawhichfulfillthecriteriau/s135oftheAct
Net Worth |Turnover | Net profit of a foreign company shall be computed in accordance with B/S and P&L A/c of such company prepared in accordance with the provisions of the Act.
Such firms need to constitute CSR Committee of Boards with 3 or more directors with at least 1 being an Independent Director
Board report SHALL disclose composition of CSR Committee

9. COMPANY ROLE (COMPANIES ACT, 2013, SECTION 135)
CSR Committee shall:
i.Formulate & Recommend to Board –CSR Policy with activities as specified in Schedule VII
ii.Recommend Expenditure to be incurred for above activities
iii.Monitor CSR Policy on regular basis
Board of company shall:
i.Approve CSR Policy & disclose content in Board report & company website
ii.Ensure activities included in CSR Policy are undertaken
Board to ensure ATLEAST 2% of average NET PROFIT in preceding 3 years in pursuance of its CSR Policy
Firm spends on activities as listed in CSR Policy around it where it operates
If Company fails to spend, Board should report under Clause (O) of sub-section (3) of Section 134

10. CSR ACTIVITIES –SCHEDULE VII, COMPANIES ACT 2013
ActivitiesallowedbycompaniesintheirCSRPolicies:-
Eradicatinghunger,povertyandmalnutrition,promotingpreventivehealthcareandsanitationandmakingavailablesafedrinkingwater:
Promotingeducation,includingspecialeducationandemploymentenhancingvocationskillsespeciallyamongchildren,women,elderly,andthedifferentlyabledandlivelihoodenhancementprojects;
Promotinggenderequality,empoweringwomen,settinguphomesandhostelsforwomenandorphans;settingupoldagehomes,daycarecentresandsuchotherfacilitiesforseniorcitizensandmeasuresforreducinginequalitiesfacedbysociallyandeconomicallybackwardgroups;
Ensuringenvironmentalsustainability,ecologicalbalance,protectionoffloraandfauna,animalwelfare,agroforestry,conservationofnaturalresourcesandmaintainingqualityofsoil,airandwater;

11. CSR ACTIVITIES –SCHEDULE VII
Protectionofnationalheritage,artandcultureincludingrestorationofbuildingsandsitesofhistoricalimportanceandworksofart;settinguppubliclibraries;promotionanddevelopmentoftraditionalartsandhandicrafts;
Measuresforthebenefitofarmedforcesveterans,warwidowsandtheirdependents;
Trainingtopromoteruralsports,nationallyrecognisedsports,paraOlympicsportsandOlympicsports;
ContributiontothePrimeMinister'sNationalReliefFundoranyotherfundsetupbytheCentralGovernmentforsocio-economicdevelopmentandreliefandwelfareoftheScheduledCaste,theScheduledTribes,otherbackwardclasses,minoritiesandwomen;
ContributionsorfundsprovidedtotechnologyincubatorslocatedwithinacademicinstitutionswhichareapprovedbytheCentralGovernment
Ruraldevelopmentprojects
NB:MCAClarificationvideGeneralCircular21/2014Dt.18thJune,2014
Further Clarifications, check http://bit.ly/1yXEE9F

12. CSRactivitiesmaybeundertakenthrough:
•Registeredtrust
•Registeredsociety
•AcompanyestablishedbythecompanyoritsholdingorsubsidiaryorassociatecompanyunderSection8oftheActorotherwise.
MCAClarificationvideGeneralCircular21/2014Dt.18thJune,2014:‘RegisteredTrust’
•RegisteredwithRegistrarofTrustintheState,
•WherenoRegistrarofTrustinState,RegisteredwithITAuthority
HOW TO IMPLEMENT CSR?

13. HOW TO IMPLEMENT CSR??
Trust/Society
oSuchtrust,societyorco.(otherthanunrelatedtothecompany)shallhaveanestablishedtrackrecordof3yearsinundertakingsimilarprogramsorprojects;
otheco.hastospecifytheprojectorprogramstobeundertakenthroughtheseentities,and;
oAlsothemodalitiesofutilizationoffundsonsuchprojectsandprogramsandthemonitoringandreportingmechanism
Collaborationwithothercompany/(ies)forundertakingprojectsorprogramsorCSRactivitiesispermitted
CSRprojectsorprogramsoractivitiesthatbenefitonlytheemployeesoftheco.andtheirfamiliesshallnotbeconsideredforCSR
PartnershipwithNGOorCommunityOrganizationtoimplementCSR

14. BuildingCSRcapacities
Companiesmaybuildcapacitiesof
oTheirownpersonnel;
oTheirImplementingagencies
ThroughInstitutionswithestablishedtrackrecordsofatleast3financialyearsbutsuchexpenditureshallnotexceed5%oftotalCSRexpenditureoftheco.inoneFY.
IMPLEMENTATION CHALLENGES

15. CSR MONITORING
CSRCommitteeshallinstitutetransparentmonitoringmechanismforimplementationofprojects,
CSRPolicyshallincludemonitoringmechanism
CSRpolicyshallspecifythatthesurplusarisingoutoftheCSRprojectsorprogramsoractivitiesshallnotformpartofthebusinessprofitofacompany

16. CSR REPORTING
Board’sReportofacompanypertainingtoaFYcommencingonorafterthe1stApril,2014shallincludeanannualreportonCSR
TheBoDsofthecompanyshalldisclosecontentsofCSRpolicyinitsreportandthesameshallbedisplayedonthecompany’swebsite,ifany.

17. WORKFLOW PROCESS
Step 1: Check if company qualifies for CSR
Step 2: Form CSR Policy & CSR Committee
Step 3: Identify activities as specified in Schedule VII
Step 4: Activities should align company’s existing business or brand
Step 5: Define expenditure for CSR activities
Step 6: Implementation Partner for activities with defined spends
Step 7: Monitoring progress on activities & spends
Step 8: Reporting –Annual CSR Report | Website update | Board Report

18. OUR SERVICES..
20 years experience in News Reporting | Public Relations
Expertise in CSR | Stakeholder Engagement | Crisis Communications | Media Relations | Advertising | Events & Sponsorships | Digital Media | Internal Communications
Storytelling across Mediums –TV | Print | Radio | Social | Online Media etc
Experience of developing CSR strategy for Power | Mining sector firms
Developed CSR Policy | Activities | Monitoring | Reporting for firms
Can develop & manage CSR programs | Partnership with NGOs
Organize | conceptualize | design | content for annual CSR Reports
Promote CSR | Sustainable Strategy

19. THANKS FOR YOUR TIME
Contact:
Shankar Chelluri
HP: +91.99490.93501
Mail: shankar@sparadigm.in
URL: www.sparadigm.in