Year 2023 will mark the decade completion of The Indian Companies Act, 2013 which will be known down in the history for bringing Corporate Social Responsibility as a process within business operations. The diversity of Section 135 of Schedule VII gave explicit choices to companies for directing their social initiatives in an effective manner.
If broken down into phases we will understand that “before the Act era” was largely defined by one time donation, product promotion and philanthropy with no substantial formats of objective, outcomes and reporting. The law directed this philanthropy into a larger reason where companies having either ₹500 crore or more, or turnover of ₹1,000 crore or more, or a net profit of ₹5 crore should regulatory spent 2% of the average net profits of the immediately preceding three years on social & environmental projects that hold positive impact on societal development. Moreover the law stated that companies need to implement their initiatives in communities directly associated with companies.
This brought many Indian & International companies to introduce & evaluate their action towards their immediate stakeholders and establish themselves as “Social Citizens with Purpose”. The most common thematic areas which companies decided to invest on were Education, Health & Skill Development. So “just after the Act era” comprised of comprehending the law, engaging the right resources, immediate community need mapping and building projects accordingly. The movement was from “philanthropy” to “activities that has impact”. Over the years the three stakeholders which formed collaborative partnership for CSR were government institutes, employees and community members.
However one challenge which this phase had was geographical restrictions where companies were reluctant to go beyond their physical operational location stating monitoring as a key issue.
The novel corona virus brought a drastic change in the way people lived and this unquestionably impacted the way CSR was being undertaken by organizations. The third phase meant expansion of technology integration within projects and most importantly implementation of projects across geographies as digital world had transit over land boundaries. Moreover ESG that is Environment, Social & Governance gained larger significance as businesses for organizational wellbeing were promoted to inculcate principles of Resilience & Sustainability through revaluate & re-implement process, policies & practices.
Currently CSR is still being explored extensively & invested to establish companies as not only social contributors but a sources to create a positive channel for companies to promote itself as a brand, explore diverse collaborative partnership, geographical expansion, engagement of local & national resources and create a viable value chain.