NSE-Listed Companies Allocate Rs 15,524 Crore to CSR in FY23

Corporate Social Responsibility (CSR) spending among companies listed on the NSE main board experienced a 5% uptick, reaching Rs 15,524 crore in the financial year 2022-23 (FY23) compared to Rs 14,816 crore in FY22, reports primeinfobase.com. This increase paralleled a 13% surge in the average net profit of these companies over the preceding three years. Regulatory stipulations mandate that 2% of this profit must be allocated to CSR activities.

CSR initiatives encompass diverse endeavors such as charitable donations, community volunteering, environmental conservation, and advocacy for causes like education and healthcare. It reflects businesses’ acknowledgment of their societal responsibility and their commitment to effecting positive change.

Increase Not Substantial

Pranav Haldea, the Managing Director of PRIME Database Group, has emphasized that while the rise in profits necessitated higher CSR spending, many companies had already been outperforming regulatory mandates in previous years. Therefore, while the increase in spending for FY23 was notable, it wasn’t as substantial as one might expect, indicating a prevailing trend of proactive CSR engagement among these entities.

The CSR law, enacted in April 2014, mandates companies meeting certain criteria to allocate 2% of their net profit to CSR projects. However, as Haldea aptly suggests, the evolving economic landscape warrants a reevaluation of these thresholds to align with contemporary realities and foster a conducive environment for business growth.

Key Findings

Data from primeinfobase.com reveals that out of the 1,893 companies listed on the NSE main board as of March 31, 2023, a substantial majority had disclosed CSR details in their annual reports. Among these, 1,296 companies were obligated to spend on CSR, reflecting an upward trajectory from the previous fiscal year. It is heartening to note that a significant proportion of these obligated companies fulfilled their CSR commitments in FY23, underlining a growing culture of social responsibility within the corporate ecosystem.

Remarkably, despite facing financial challenges, 48 companies chose to prioritize CSR spending, demonstrating a commendable commitment to social welfare even in adverse circumstances. These companies, including stalwarts like Tata Motors and IDFC First Bank, serve as beacons of ethical conduct and social consciousness in the corporate realm.

However, while private enterprises exhibited a commendable commitment to CSR, Public Sector Undertakings (PSUs) witnessed a decline in CSR spending in FY23. This underscores the need for concerted efforts to reinvigorate CSR initiatives within the public sector and foster a culture of social responsibility across all spheres of governance.

Geographically, the distribution of CSR spending reflects a diverse landscape of social investment, with states like Maharashtra, Rajasthan, and Gujarat emerging as prominent recipients of CSR expenditure. This underscores the decentralized nature of CSR initiatives, where companies allocate resources based on local needs and priorities, thereby facilitating targeted and impactful interventions at the grassroots level.

Conclusion

In essence, the surge in CSR spending among NSE-listed companies is indicative of a broader paradigm shift towards sustainable and inclusive business practices. As companies continue to navigate the complexities of the modern business landscape, integrating CSR into their core operations isn’t just a regulatory mandate; it’s a strategic imperative for long-term growth, resilience, and societal impact. By championing CSR initiatives, businesses reaffirm their commitment to stakeholder value creation and pave the way for a more equitable and sustainable future for all.