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.

Companies have steadily improved their performance on this count. However, they still do not have adequate programmes in the social space.

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

SDGsArea 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 Communitiesv) 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 Inequalityvi) Measures for the benefit of armed forces veterans, war widows and their dependents
GOAL 10: Reduced Inequalityvii) Training to promote rural sports, regionally recognised sports, Paralympics sports
GOAL 10: Reduced Inequalityviii) 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 Infrastructureix) 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

Social Projects

One of the key indicators of societal performance is the spending by companies on their CSR activities. In this section we briefly look at this key indicator.

The top three spenders in percent terms were –

  • Coal India Ltd.
  • Vedanta Ltd.
  • Tata Steel Ltd.


More Indian companies are complying with the Government of India rule to spend 2% or more of average net profit of the previous three years in CSR.

2018-192017-18
Average CSR spend (%)2.4%2.2%
% companies that spent 2% or more82%72%

Materials sector spent the most, followed by Other Industrials and Diversified. Telecom continues to spend the least.

IndustryAverage spendTop spender (% terms)
Materials3.4%Coal India Ltd.
Other Industrials2.7%Cummins India
Diversified2.5%Dalmia Bharat Group
Energy2.3%Oil India Ltd.
Capital Goods2.3%Bharat Heavy Electricals Ltd.
Other Financials2.1%HDFC Life Insurance Company Ltd.
Utilities2.1%NTPC Ltd.
Healthcare2.1%Dr. Reddy's Laboratories Ltd.
Consumer Staples2.0%Tata Global Beverages Ltd.
Consumer Discretionary2.0%United Spirits Ltd.
Information Technology1.9%Tech Mahindra Ltd.
Financials1.9%Axis Bank Ltd.
Telecommunication Services0.8%Bharti Airtel Ltd.
All2.4%

Manufacturing companies spent more than services in general. However, there is a little difference in spending pattern between public and private sector companies.

ManufacturingServicesTotal
Public2.8%1.9%2.6%
Private2.5%1.9%2.4%
All2.6%1.9%2.4%

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, eradicating hunger and poverty etc. received less than a percent of the share of the total amount spent in the year.

CSR Spend across community areas in Schedule VII