The ‘C’ in CSR, the acronym for corporate social responsibility, can very well refer to Covid-19.
Over the past few months, corporates have been using all or most of their CSR kitty to combat the scourge, be it through contribution to the PM CARES Fund, other relief funds, distribution of food, masks, personal protective equipment (PPE) kits or relief material to the needy.
CRISIL drew up a list of top 100 companies by revenue and CSR spend each in fiscal 2019, and checked whether they were alive to the need to alleviate the widespread distress caused by the pandemic.
Of the 200, ~70 appeared in both lists, while ~60 figured in only one. Of this total ~130, 113 spent on pandemic-related mitigation, according to data available in the public domain up to May 15, 2020.
Of this, about 84 companies (including support through the corporate group) contributed ~Rs 7,537 crore during March-May 2020, which can be classified as CSR spend1. The remaining 29 either contributed to other funds (Rs 373 crore), and/or facilitated voluntary employee donations (Rs 84 crore) that cannot be classified as CSR spend, or donated solely in kind (food and masks), for which assigning a monetary value was difficult.
Private sector and foreign companies, and public sector undertakings (PSUs) have contributed proportionately to their share of the sample.
Region-wise, 36 companies in Maharashtra – also the state with the highest number of Covid-19 cases – stood out because they contributed ~63% of the total spent.
The generous contributions by India Inc to address the Covid-19 pandemic comes on the back of healthy growth in CSR spending in fiscal 2019.
The tally of eligible companies that spent on CSR in fiscal 2019 and duly reported it rose to 1,276, compared with 1,246 the previous fiscal. And their total CSR spend increased ~14% on-year to ~Rs 11,392 crore, which was a touch over 2% of their average net profit of the preceding three fiscals, as mandated by the Companies Act, 2013.
Over two-thirds of these spent 2% or more of their net profits, while ~10% spent 3% or more.
Around 460 did not meet their spending target, though as a proportion, such companies have reduced.
Of what was spent in fiscal 2019, education and skill development, healthcare and sanitation, and rural development accounted for ~75%. That was a 5% jump in these areas, from the previous year. But the share of spends on environment, national heritage protection, and sports shrank.
Public sector companies, which account for ~9% of the total, contributed ~29% while private companies, which formed a majority 85%, spent ~67%. In both, around two-thirds met the mandate of 2% or more.
Financial and energy companies spent way more than manufacturers.
As has been the wont in recent times, most companies preferred to implement their CSR mandate through non-governmental organisations (NGOs) or trusts in fiscal 2019, too. This trend could, however, change a little in days to come, given the amendments proposed by the Ministry of Corporate Affairs.
All the same, it is heartening that five years since CSR spending was made mandatory, the number of companies reporting such spending and their cumulative CSR spend has increased every year, signifying improved compliance.
If anything, the 130 companies analysed by CRISIL accounted for nearly 80% of the total CSR spend by eligible listed companies in fiscal 2019. Assuming other companies would have followed a similar path, India Inc has already allocated over 80% of the annual CSR spend budget to address the Covid-19 pandemic. That could crimp the share of the other causes the corporates have been supporting.
