Corporate Social Responsibility: A Guide on choosing the Right Cause for Your organization
Introduction
Corporate Social Responsibility (CSR) is no longer an optional activity for Indian companies — it is a legal mandate under the Companies Act, 2013. But beyond compliance, CSR is also an opportunity to strengthen your organization’s corporate governance, brand purpose, mission, and values.
Too often, companies restrict themselves to generic initiatives like tree plantation, recycling drives, or child education. While these are noble, they may not always align with a company’s core business values, nor stand out for stakeholders such as investors, clients, or employees. The key lies in aligning CSR with corporate purpose, industry impact, and long-term sustainability goals.
Legal Framework: CSR Rules in India
The Companies Act, 2013 (Section 135) and subsequent amendments under the Companies (CSR Policy) Rules, 2014 govern CSR in India.
🔹 Applicability: CSR applies to companies with
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Net worth of ₹500 crore or more, OR
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Turnover of ₹1,000 crore or more, OR
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Net profit of ₹5 crore or more during the immediately preceding financial year.
🔹 CSR Spending:
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Companies must spend at least 2% of their average net profits from the last three years on CSR activities.
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Unspent CSR funds for ongoing projects must be transferred to a special “Unspent CSR Account” and utilized within 3 financial years. If not, the amount must be transferred to a government-specified fund.
🔹 CSR Committee & Reporting:
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Companies must form a CSR Committee (Board-level subcommittee) to recommend CSR policy and spending.
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CSR reporting in the annual Board Report is mandatory, including disclosure of the amount spent/unspent and details of activities.
🔹 Permissible CSR Activities (Schedule VII of the Companies Act):
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Eradicating hunger, poverty, and malnutrition
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Promoting education and gender equality
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Ensuring environmental sustainability and animal welfare
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Rural development and slum area development
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Contributions to government relief funds
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Research in science, technology, and sustainable development
Importantly, CSR activities must not be undertaken in the normal course of business and should not benefit only employees of the company.
CSR teams of companies should consider supporting causes that help replenish and preserve the natural resources and communities that their company has consumed or depleted while making their products or services.
Important factors to consider when choosing a CSR cause
- Building a strategy around your company’s core competencies.
- Recognizing issues that matter to your customers.
- Developing CSR initiatives that make your employees proud.
- Measuring the ROI of your CSR efforts for the C-suite and your investors.
- Expanding your company’s definition of CSR.
- Being prepared for rapid response to current events and social movements.
Industry-Aligned CSR Examples
🌱 Dairy & Food Companies (Amul, Mother Dairy, Patanjali, Haldirams)
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Preserve Indian cow breeds and promote A2 milk
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Support gaushalas, gobar gas plants, and organic manure projects
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Partner with authorities to stop illegal slaughter and smuggling
💧 Soap, Detergent & Cleaning Brands (HUL, ITC, P&G)
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Reduce water pollution caused by cleaning products
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Invest in water purification, recycling, and greywater treatment
🌍 Automobile & AC Manufacturers (Tata Motors, Maruti, Daikin, LG, Samsung)
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Invest in reducing vehicular emissions and air pollution
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Promote sustainable cooling technologies and alternative fuels
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Collaborate on large-scale initiatives against global warming
CSR in India is both a legal responsibility and a strategic opportunity. Companies must look beyond “tick-box” activities and focus on initiatives that replenish the resources and communities impacted by their business. When done authentically, CSR not only benefits society but also strengthens trust among stakeholders.
💡 At Ideazfirst Marketing Services Pvt Ltd, we consult companies on CSR planning, ensuring alignment with corporate purpose and compliance with India’s legal framework.
📧 Write to us or call 9836290990 for appointments.
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