MCA wants India Inc to set aside part of budget for CSR

Written by Neha Pal | New Delhi | Updated: Jan 1 2010, 02:56am hrs
Companies should allocate a specific amount in their budget for corporate social responsibilty activities that may be related to profits after tax, cost of planned CSR activities and any other suitable parameter, according to a ministry of corporate affairs report on voluntary corporate social responsibilities.

The report suggests that the corporate social responsibility (CSR) policy of the business entity should provide for an implementation strategy that should include identification of projects, time schedule and monitoring, setting measurable physical targets with time-frame, organisational mechanism and responsibilities.

Companies may partner with local authorities, business associations and non-government organisations. They may influence the supply chain for CSR initiative and motivate employees for voluntary effort for social development, says the report.

The report further suggests that companies may evolve a system of need assessment and impact assessment while undertaking CSR activities in a particular area. Independent evaluation may also be undertaken for selected projects from time to time. To share experiences and network with other organisations the company should engage with well established and recognised programmes or platforms which encourage responsible business practices and CSR activities. This would help companies improve on their CSR strategies and effectively project the image of being socially responsible.

The report also says that the companies should disseminate information on CSR policy, activities and progress in a structured manner to all their stakeholders and the public at large through their website, annual reports and other communication media.

As per the report, companies should respect the interests and be responsive to all stakeholders, including shareholders, employees, customers, suppliers, project affected people, society at large and create value for all of them. They should develop a mechanism to actively engage with all stakeholders, inform them of inherent risks and mitigate them where they occur.