ÉVOLUTION DU DROIT I PANORAMA JURÍDICO ARC OF THE LAW
CSR in India: A Paradigm Shift from Benevolence to Obligation ASHU THAKUR
La responsabilité sociale des entreprises (RSE) est un
effort continu des entreprises pour rationaliser et intégrer des objectifs sociaux et environnementaux plus larges dans les perspectives commerciales de leur entreprise et regarder au-delà des performances financières. Si les entreprises responsables ont toujours existé en Inde, la philanthropie d’entreprise, elle, a toujours été volontaire et influencée par les préférences individuelles des magnats des affaires, les valeurs familiales, les traditions, la culture et la religion.
La responsabilidad social empresarial (RSE) es un esfue-
rzo continuo de las empresas para racionalizar e integrar objetivos sociales y ambientales más amplios en su perspectiva comercial y mirar más allá de los resultados financieros obtenidos. Si bien las empresas responsables siempre han existido en la India, la filantropía empresarial o corporativa siempre ha sido voluntaria y ha estado influenciada por las preferencias individuales de los magnates empresariales, los valores familiares, las tradiciones, la cultura y la religión.
A brief background
Dawn of the Indian CSR Era
After Indian independence in 1947, the renowned Mahatma K. Gandhi (respectably referred to as the father of the Nation) regarded the Indian companies and industries as “Temples of Modern India” and urged powerful industrialists to come forward and share their wealth for the benefit of the underprivileged section of the society. Mahatma Gandhi advocated the concept of trusteeship helping socio-economic growth of India, whereby all people having money or property hold it in trust for the society. In this conception, organizations and individuals possessing surplus wealth over and above their legitimate and genuine needs should spend it on community welfare programmes as an aspect of their social responsibilities. This ideology of Mahatma Gandhi sowed the seeds of CSR1 in India.
It was only in 2014 that India identified, acknowledged and integrated CSR into its corporate legislations with a view to regulate and enhance the far-reaching impact of CSR in a structured and systematic manner. India, for the first time in its history, while replacing its age-old Companies Act 1956 by the The CSR projects or Companies Act 2013, introprograms or activities duced the concept of man2 that benefit only datory CSR for corporations with 1) a net worth of INR the employees of 5 billion ($70 million USD) the company and or more, 2) with an annual their families are not turnover of INR 10 billion to be considered ($140 million USD) or more, or 3) a net profit of INR 50 as permissible CSR million ($700,000 USD) or activities. more (“Companies”). This meant the applicable companies must spend 2 percent of their average net profits of three years on CSR. Prior to 2014, CSR was voluntary and merely an act of benevolence for companies and the only obligation being of disclosure of CSR spending to their shareholders. The
1. It has become common to speak more of business and human rights, or use the more global term Environmental, Social and Corporate Governance (ESG) but in India, CSR is generally understood to accommodate corporate governance concepts that address human rights, environmental and societal concerns. Recently, on 10 May 12021, the securities regulator, the Securities and Exchange Board of India (SEBI), issued a circular implementing new sustainability-related reporting requirements for the top 1,000 listed companies by market capitalization. This is yet another bold step bringing sustainability reporting up to existing financial reporting standards in India.
2. Section 135 of the Companies Act 2013.
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