CORPORATE SOCIAL RESPONSIBILITY  DURING COVID TIMES

This article was written by Spoorthy Perapogu, a student of NALSAR University of Law, Hyderabad.

CSR has been practiced by most of the companies in some form to integrate social and environment responsibility in their business activities. The main goal is to inculcate social and environmental practices in their business values. India has been traditionally following CSR as philanthropic activity. But since years it has been asked to look at CSR as a discipline and to deliver every business results and since there is so much of asking of CSR, this would distract people from looking at CSR as the form to inculcate social and environment responsibility.

India is the first country to statutorily recognize and mandate CSR activities under companies act, 2013. Prior to that it was based on the principle of comply or explain which means to spend the minimum CSR amount or disclose the reasons for not spending CSR and was voluntary.

Corporate social Responsibility has not be officially defined by legal authorities but rules has been incorporated to the companies funding CSR I.e. According to section 135 of Companies Rules, 2014 and schedule VII of Companies Act, 2013;

  ‘ Every company with a net worth of Rs 500 crore or more of turnover of Rs 1000 crore or more or net profit of Rs 5 crore or more during the immediate preceding financial year, must have a CSR committee and spend at least 2 percent of average net profits earned during the three immediate preceding financial years to CSR activities’.[1]

Since the mandatory provisions came into India in 2014, CSR spending by corporate sector in India has been increased significantly. The Ministry of Corporate Affairs (MCA) released a notification regarding the company’s expenditure utilized to fight the pandemic shall be considered valid under CSR activities. This announcement by the government of India was a win- win situation for all the companies integrating with CSR.[2]

Since years, the banking, financial services and Insurance (BFSI)’s contribution has been always undermined in comparison to other sectors especially the manufacturing sector. The pandemic has given them the chance to explain themselves why CSR of every company and sector even though contributed less amount has become important in tough times. Here it is important to understand the motivational, ethical drive of many companies even though companies are at stake in tough times.

As part of CSR, many companies has contributed funds, resources and supplies to PM donation funds or to hospital and in other forms to aid the people affected by the pandemic as part of their CSR. Tata companies has been gearing up to manufacture ventilators, donate funds.

Companies like McDonalds has started new ways of advertising such as it has advertised by putting alphabets in the logo distantly bringing awareness about social distancing. Companies like

COAL India, Ambuja cement, coca cola, Bosch, etc no matter the company is small or large corporation, they had been indulged in CSR during the emergency period of COVID.

Defence public sectors units are manufacturing masks, sanitizers etc to the front line workers whereas private companies has tied up with NGOs to provide food, ration to the needy. Companies has also aimed at providing support for their employees such as offering training activities, financial support to work from home. A Good CSR is the one which provides support during the time of crisis by solving the issues especially when larger community is facing the crisis or in need.

During such emergency period, communication is the most important. In ordinary circumstances, communicating for CSR activities there were many ways. But during emergencies, consistency, plan are much needed. In the emergency situations actions are more important than words because a larger number of people in need depend when one is providing support during the crises. If the actions fail, it would be helpless for the needy who depend on these companies based on their words.

Larger corporations such as Google, Amazon are providing assistance/ support to the small businesses in their vicinity of their headquarters.

Along with helping out for the physical health being as manufacturing masks, sanitizers, PPE kits, donating for the well being of hospital facilities it is equally important to encourage the mental well being of the people in such situations. Since COVID has been declared as Global pandemic by World Health Organization (WHO)  almost everybody or few had experienced COVID to themselves, people they know or their own family members which make them emotionally unwell. Most of the people have lost their employments and had affected on their economic life too which further affect on their mental health. Thus most of the companies has also been providing funds to their employment for their mental well being too.

To conclude we can say that the pandemic has directly or indirectly had changed and impacted our lives. The importance of CSR has then been known to the globe which had helped the world with economic assistance especially in India when the government of India had announced that the CSR funds has been largely provided and helped most of the people in the crisis period. Though activities of companies had come to halt due to their economical positions, they still stepped out of their comfort zones to carry out their CSR activities to help the needy in the pandemic. India has became successful in mandating CSR activities from being voluntary. Yet there were mistakes, difficulties; many companies has been doing their part to carry out their activities part of CSR concluding it is the unity of the companies and the committees of the company in performing these activities.

[1] https://www.taxmann.com/emailer/images/pdf/section%20135%20-%20full.pdf

[2] https://www.mca.gov.in/Ministry/pdf/GeneralCircularNo9_05052021.pdf