How Indian companies fare on CSR

Only 31 percent firms report on corporate responsibility: KPMG survey


Sweta Ranjan | August 9, 2011

About one third (31) of the top 100 companies in India report on corporate responsibility (CR) performance and 52 percent of these reporters provide reference to their sustainability strategy, KPMG has found in a recent survey.

The survey included the top 100 listed companies in India by revenue. KPMG examined information disclosed publicly by these companies to discern emerging trends in corporate responsibility reporting.

The report says, “The CSR agenda for most companies include education, health care, HIV/AIDS and community development but there is minimal clarity on how companies decide on such CSR projects. Reporting on stakeholder engagement is weak and companies do not articulate how they identify and prioritize the stakeholders and how they benefit from such engagement. It is also not clear how this engagement feedback is used in the companies to arrive at material issues or develop business strategies.”

The CSR debate has been in sharp focus throughout the world during last few years. Corporate conduct and its connect with the communities are being questioned by stakeholders including the government. With issues like corporate ethics and scams,  land acquisition and corporate growth and India-versus-Bharat debate, the corporate conduct is now at the cente rstage in the context of India Inc.

The Ministry of Corporate Affairs recently launched the new voluntary guidelines (NVGs) on social, environmental and economic responsibilities of business which proposed that the listed profitable companies voluntarily should devote two percent of their after-tax profit to CSR.

The report say that 23 percent of the companies surveyed reported the business risk of climate change, 21 percent disclosed their green house gases emissions and 13 percent identified and disclosed the business risk of corporate responsibility issues in their supply chain.

Arvind Sharma, director, climate change and sustainability, KPMG in India, says, “These kinds of reporting are highly prevalent in the developed nations and helps companies raise better financial resources and supply chain management.”

Companies that report on corporate responsibility initiatives include Reliance Industries, Tata Power, Tata Chemicals, Grasim Industries, Infosys and ONGC, he added.

As per the report, “CR reporting is at a very nascent stage in India. One third (31) of the N100 companies report on corporate responsibility performance in the public domain. Construction and building material companies are leaders in sustainability reporting followed by metals and mining, oil and gas and chemical companies. Transportation, finance, trade and retail and communications and media lag behind with almost no reporters amongst N100 companies.”

While the government is raising expectations from the corporate sector on non-financial performance and even talking of mandating CSR, the corporate sector is stressing that CSR should remain a subject of voluntary initiative. The KPMG survey shows the gap in expectation and performance clear terms.

You can read the report here.



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