New Delhi [India], September 24 : Corporate Social Responsibility (CSR) spending in India is projected to treble and exceed Rs 1.2 lakh crore annually by 2035, making it the largest pool of philanthropic capital in the country, according to a recent report.
This assertion is based on a 13.48 per cent CAGR observed from the earnings growth of the top 100 listed companies.
The Convergence Foundation (TCF) and its network organisation SCALE launched their report, India Inc. for Building Bharat: How Systemic CSR is Building Enduring Impact for Tomorrow, co-authored with India Impact Sherpas.
The report documented emerging trends in corporate philanthropy, highlighting the rise of catalytic funding directed to organisations which support governments in strengthening public systems.
On April 1, 2014, India became the first country in the world to legally mandate corporate social responsibility.
The rules in Section 135 of the Companies Act 2013 make it mandatory for companies of a certain turnover and profitability to spend 2 per cent of their average net profit for the past three years on corporate social responsibility activities.
CSR spend in 2023-24 was Rs 30,000 crore, whereas the government has had a dominant role as a funder for the social sector, with a Rs 25.7 lakh crore annual social sector spend (about 8 per cent of India's GDP).
Unveiling the report, Ashish Dhawan, Founder-CEO of The Convergence Foundation, said "CEOs can set a bold vision by treating CSR as a long-term investment that creates non-linear social returns. To create large-scale impact, hiring a strong CSR leader with a genuine commitment to social impact is one of the most important decisions a business leader can make."
Dhawan called upon CEOs and business leaders to apply a portfolio lens to their entire CSR spend.
"A company's CSR can be treated as a portfolio, including a mix of direct, programmatic initiatives, and more systemic initiatives which tackles root causes of social issues. As the corpus of CSR grows in the next few years, companies can aspire to allocate 10-20 per cent of their portfolio towards long-term bets on systemic initiatives," Dhawan said.
CSR has matured significantly over the last few years, particularly since becoming a legal mandate in 2013.
"In its second innings over the next decade, there is an opportunity to use CSR as a strategic investment and act as a vehicle for transformative change", said Govind Iyer, Chair of the CSR Committee at Infosys, and a member of the advisory board at TCF.
Within just 10 years of the Act, there has been a significant evolution in the CSR landscape, transitioning corporate philanthropy from just an obligation to a strategic and intentional endeavour.
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