Responsible Business Rankings
India’s Top Companies for
Sustainability and CSR 2021
Social
The social parameter looks at several issues. How well are key stakeholders (employees, community, customers and suppliers) integrated within a company’s responsible business framework? Employee-centric initiatives; Customer-centric initiatives; Community-centric initiatives; Supplier-centric Initiatives.
One of the key components of Social parameter is the expenditure by companies on CSR. The CSR spend as defined by Companies Act 2013 and SDG goals have significant overlaps as illustrated in the table below:
Mapping SDG to India’s CSR Spend Areas
| SDGs | Area of spend specified by CSR Rules |
|---|---|
| GOAL 1: No Poverty GOAL 2: Zero Hunger GOAL 3: Good Health and Well-being GOAL 6: Clean Water and Sanitation | i) Eradicating hunger, poverty and malnutrition, promoting preventative health care and sanitation and making available safe drinking water; |
| GOAL 4: Quality Education GOAL 8: Decent Work and Economic Growth GOAL 10: Reduced Inequality | ii) Promoting education including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently-abled and livelihood enhancement projects. |
| GOAL 5: Gender Equality GOAL 10: Reduced Inequality | iii) Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and other such facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups; |
| GOAL 7: Affordable and Clean Energy GOAL 11: Sustainable Cities and Communities | iv) Ensuring environmental sustainability, ecological balance, protections of flora and fauna, animal welfare, agroforestry, conversation of natural resources and maintaining quality of soil, air and water; |
| GOAL 11: Sustainable Cities and Communities | v) 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; |
| GOAL 10: Reduced Inequality | vi) Measures for the benefit of armed forces veterans, war widows and their dependents |
| GOAL 10: Reduced Inequality | vii) Training to promote rural sports, regionally recognised sports, Paralympics sports |
| GOAL 10: Reduced Inequality | viii) 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; |
| GOAL 9: Industry, Innovation and Infrastructure | ix) Contributions or funds provided by technology incubators located within academic institutions which are approved by the Central Government; |
| GOAL 1: No Poverty GOAL 2: Zero Hunger GOAL 10: Reduced Inequality GOAL 11: Sustainable Cities and Communities | x) Rural development projects |
The top three spenders in percentage terms were –
- Coal India Ltd.
- United Spirits Ltd
- Vedanta Ltd.
Most Indian companies comply with the Government of India rule to spend 2% or more of average net profit of the previous three years in CSR. We have excluded the carry forward spend amount from the reported CSR spend amount to compute CSR spend percentage. This has partially contributed to the reduction in the average CSR spend as compared to the previous year, along with other factors such as the pandemic related cash crunch.
| 2019-20 | 2018-19 | |
|---|---|---|
| Average CSR spend (%) | 2.0% | 2.4% |
| % companies that spent 2% or more | 72% | 82% |
Materials sector spent the most, followed by Other Industrials and Diversified. Telecom continues to spend the least.
| Industry | Average spend | Top spender (% terms) |
|---|---|---|
| Materials | 2.4% | Coal India Ltd. |
| Energy | 2.3% | Oil India Ltd. |
| Information Technology | 2.3% | MindTree Ltd |
| Utilities | 2.2% | Power Grid Corporation of India Ltd. |
| Diversified | 2.2% | Piramal Enterprises Ltd. |
| Telecommunication Services | 2.1% | Tata Communications Ltd. |
| Healthcare | 2.0% | Sun Pharmaceutical Industries Ltd. |
| Consumer Staples | 2.0% | Tata Consumer Products Ltd. |
| Consumer Discretionary | 2.0% | United Spirits Ltd. |
| Other Industrials | 1.9% | Cummins India |
| Other Financials | 1.9% | Cholamandalam Financial Holdings Ltd. |
| Capital Goods | 1.8% | Finolex Industries |
| Financials | 1.5% | ICICI Bank Ltd. |
| All | 2.0% |
Manufacturing companies spent more than services in general. And private companies spent more than public companies.
| Manufacturing | Services | Total | |
|---|---|---|---|
| Public | 2.1% | 1.5% | 1.9% |
| Private | 2.2% | 2.0% | 2.1% |
| All | 2.2% | 1.9% | 2.0% |
If we look at the breakup of CSR spent amount into the various areas listed in Schedule VII, we note the following:
- Education and healthcare have consistently received a significantly higher proportion of spending across years.
- In contrast, other areas such as initiatives for senior citizens, armed force veterans, drinking water, women empowerment and protecting national heritage received less than a percent of the share of the total amount spent in the year.