Develop CSR strategy and policy before taking a plunge

GN Bureau | September 14, 2015



The companies can also refer to a guidebook developed by CII and PWC. This part is on ‘Developing a CSR strategy and policy’:

Purpose
The Companies Act, 2013 requires every company to put out its CSR policy in the public domain. The guidance provided in the Act and the draft rules on what constitutes a CSR policy are that it should:

• exclude normal business activities of the company.

• contain a list of the CSR projects or programmes which the company plans to undertake during the implementation year.

While specifying the annual report requirements, the draft rules go on to say is that the company must provide:

• a brief outline of its CSR policy, including ‘the statement of intent reflecting the ethos of the company, broad areas of CSR interest and an overview of activities to be undertaken’.

• a web link to the CSR policy including ‘the full list of projects, activities and programmes proposed to be undertaken by the company’.

Since most of the development requires long-term commitments and their impact often takes a while to accrue, a good CSR practice requires that a company that is serious about its CSR should develop a long-term (three to five years) vision and strategy which is reviewed annually and the activities and budgets are planned on an annual basis. The latter will comply with the CSR policy requirements of the Companies Act, 2013.

To avoid confusion regarding terms like policy, strategy, project and programme, a brief explanation has been provided here:

• CSR strategy refers to what the company expects to achieve in the next three to five years and incorporates the vision, mission and goals on a broader level. It also entails how it plans to achieve these in terms of organization and approach.

• CSR policy refers to what the company expects to achieve over the next year.

This is aligned with the requirements of the Companies Act, 2013 .

• Programme refers to a sector or an issue that the company proposes to address through its CSR. This can, for instance, be ‘education of the girl child’ or ‘agriculture development’.

Programmes will be clearly outlined in the company’s CSR strategy.

• Programme goals will be achieved through a series of individual projects and, a project refers to a set of interventions, typically in a specific geography and addressing a specific stakeholder group, with a definite set of goals, beginning and end and a budget attached to it.

• Each project in turn will consist of a number of activities. All of which contribute towards the project goals.

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