Consumer goods companies show aggressive CSR activities

Six major companies spent over Rs 300 crore in the first year of operation of new CSR rules

GN Bureau | August 20, 2015


#corporate social responsibility   #csr   #ITC   #Hindustan Unilever   #Nestle India   #Godrej   #Dabur   #emami  


The Corporate Social Responsibility (CSR) law has changed the way companies approach their activities as many old sectors do not fall under CSR categories. However, the good news is that the consumer goods companies’ share in CSR sector has risen by 57% in 2014-15.

The CSR rules, came into force on 1 April last year under the Companies Act 2013 and companies with a net worth of Rs.500 crore or more or revenue of at least Rs.1,000 crore or a net profit of Rs.5 crore in a given fiscal year should spend 2% of the profit of the last three years on CSR activities.

In the first year of implementation, six major companies ITC Ltd, Hindustan Unilever Ltd, Nestle India Ltd, Godrej Consumer Products Ltd, Dabur Ltd, Emami Ltd spent Rs.343.2 crore. Their initiatives focused mostly in health, nutrition, livelihoods and sanitation, according a report published in Mint daily.

Most noteworthy contribution is by ITC Ltd. The company has doubled its CSR spending to Rs.214 crore.

It spent on soil conservation (Rs.31.45 crore) and livelihood initiatives (Rs.28.53 crore) where it trains dairy farmers and help set up of modern milk collection networks.

However, Nestle missed meeting the 2% CSR spend and its CSR spending fall in 2014. According to its annual report, Nestle India had to spend Rs.30.7 crore in 2014, but it spent only Rs.8.5 crore. Its CSR spend fell by 64% from Rs.23.9 crore in 2013.

From Rs.8.5 crore, Nestle donated Rs.5 crore to the Swach Bharat Kosh set up by the Central Government for the promotion of sanitation and making available safe drinking water. It spent Rs.1.5 crore on raising nutritional awareness among government school children around its eight manufacturing units.

In its annual report it said: “The company has been implementing societal activities since many decades. As per the strict interpretation of the new CSR rules, some of these initiatives may not be eligible under the 2% CSR spend.” It also said it has ensured that the cumulative spend on societal activities is over 2%

The other multinational Hindustan Unilever Ltd spent Rs.82.3 crore in fiscal 2015. HUL’s CSR spend grew 40% over a year ago, and spent Rs.2.5 crore more than the 2% limit. HUL has various CSR initiatives from water conservation programmes to skill building initiatives, and some of its initiatives are also closely tied to its businesses be it the Lifebuoy hand washing programme which creates awareness about handwashing to prevent diseases, or giving micro-loans to the poor to be able to buy their water purifiers, Pureit, according to its annual report.

HUL’s highest spend was in fact towards its Project Shakti. It spent Rs.46.5 crore during the year to train rural men and women called Shaktimaan and Shakti ammas to sell the company’s products and in turn become entrepreneurs. For that, the company trains them in basic accounting, selling skills and relevant IT skills.

The highest increase in CSR spend among the six firms was seen in Godrej, as its spending rose four times to Rs.16 crore during the year. Their CSR activities include development of renewable energy and livelihood creation.

Dabur, which met its 2% target by spending Rs.14.7 crore, showed a 29% drop in CSR spend versus last year.  Many companies’ CSR spends will fall because much of what they were doing as CSR earlier won’t be considered as CSR under the new guidelines. The activities carried out by the companies should be listed in Schedule VII of Section 135 of the act.

Comments

 

Other News

From one cow to a dairy business

In 2012, Anita Dash wasn`t dreaming of building a dairy brand. She wasn`t studying business models or planning market expansion. Like countless mothers across India, her focus was on something much simpler: giving her children a better future.   At the time, her most valuable

Ethanol blending: The two sides of a story

India`s crude oil consumption is estimated to be around 88.5% imported from abroad. This one single figure is also responsible for why ethanol has become both an economic strategy and fuel policy at the same time. In an economy like India, which depends so heavily on foreign oil, any increase in internat

Food inflation: Not a macroeconomic statistic but a developmental indicator

India`s retail inflation shows a reassuring picture at first glance. According to the latest data, Consumer Price Index (CPI) inflation edged up to 4.38% in June 2026 from 3.93% in May 2026, but continued to remain within the Reserve Bank of India`s (RBI) target band of 4% (+/- 2%). However, beneath this

Skin in the game or masterful market timing?

When a company founder opens their personal chequebook to buy shares in their own business, stock markets usually applaud. To the average retail investor, it feels like the ultimate vote of confidence, a sign that the people running the show have real skin in the game and believe brighter days are ahead.

India’s freedom struggle was shaped by wider Asian political thought

As we mark 80th anniversary of independence, ‘Asianism and the Fall of Empire’ (HarperCollins India) by historian Mithi Mukherjee offers a new perspective on Ind

What is colonialism? A relook at modern history

The Chromatic World Order: The Fiction That Rules Our World  By Sajid Mohamed Aakar Books  

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter