Did India Inc’s CSR Spending Really Surge by 29% in FY22-FY24?

New Delhi, July 29 (NationPress) The annual corporate social responsibility (CSR) expenditure of Indian corporations witnessed a remarkable 29% increase from FY2022 to FY2024, as revealed by a report published on Tuesday.

According to the findings from ICRA ESG Ratings, by March 2024, the selected companies collectively invested Rs 12,897 crore in CSR, averaging Rs 129 crore on various initiatives.

During this period, net profits surged by 37%, while CSR spending climbed by 29%.

Interestingly, 16 out of 100 companies raised their CSR allocations even when profits declined, showcasing a dedication to social responsibility that transcends mere compliance.

Despite profit reductions, 48% of companies exceeded their mandated CSR budgets, demonstrating their commitment to social causes.

“The increasing alignment with UN SDGs and proactive CSR investments, even exceeding required budgets, reflect a mature approach towards inclusive development. These initiatives are enhancing stakeholder value and making significant contributions to India's broader climate and social objectives,” stated Sheetal Sharad, Chief Ratings Officer at ICRA ESG Ratings.

Furthermore, the report indicates a growing alignment with the United Nations Sustainable Development Goals (UN SDGs), as firms increasingly invest in impactful initiatives, particularly in quality education and good health and well-being.

Education and healthcare emerged as the top priorities for CSR, with SDG 4 (Quality Education) and SDG 3 (Good Health and Well-being) showing the strongest alignment among the surveyed companies.

The states of Maharashtra and Gujarat received the largest CSR funding, while Odisha experienced a significant growth of 85%, followed by Andhra Pradesh with a 70% increase in CSR concentration, indicating a heightened corporate focus on underdeveloped regions with substantial development needs.

Leading sectors in CSR spending include oil and gas refineries, private sector banks, iron and steel, and software consulting firms.

CSR investments in aspirational districts surged by an impressive 115% from FY2021 to FY2023.

While some companies directed up to 50% of their CSR budgets to these districts, most allocated less than 5%, highlighting a need for strategic focus and resource allocation in these areas.

Although progress is noticeable, the report emphasizes the necessity for diversification in CSR priorities and the exploration of innovative partnerships and funding alternatives that can draw attention to other crucial yet underrepresented causes.