The new Companies Bill, 2012, which was recently passed in both the Houses of the Parliament, has been in much debate. The Corporate Affairs Ministry has mandated that under the new Companies Act, 2013, all profitable companies with sizeable business would spend every year at least 2 per cent of three years average profit on Corporate Social Responsibility (CSR).
This new act is applicable to all those companies with turnover of Rs 1,000 crore and more or net worth of Rs 500 crore and more or a net profit of Rs 5 crore and more.
A study conducted by NGO Socio Research and Reform Foundation stated that CSR spent by top 100 Indian companies is worth Rs 2,300 crore, a 0.82 per cent of their net profit. With the new law coming up, this contribution can go almost 2.5 times and garner Rs 6,280 crore and if we include top 500 companies, the figure stands at Rs 8,122 crore which is a sizeable amount. While there are several such inferences and view points on the law, but optimistically, these initiatives would surely benefit the society at large.
Amidst of all these positive developments, it is important to understand the stakeholder’s responsibility to put in best use of these funds. Philanthropy has been embedded in Indian culture since ages and with passage of time, its applications and consequent outcomes have changed. Results are now being measured both quantitatively and qualitatively. Corporations are investing in fruitful partnership with NGOs who in turn adequately assign resources in fields which require awareness and improvement. Employee volunteering has become an integral part of the Corporate’s CSR strategy. Being a part of the change mechanism is important as only then its true value can be generated.
At Amway Opportunity Foundation (AOF), the CSR arm of Amway, employee volunteering is a part of their key performance initiatives. Amway employees and distributors form local implementation committees which are entrusted to identify, screen, select and partner with NGOs to support health and education needs of less privileged children of our society. It does serve company’s value system which lays emphasis on partnership, transparency, trust and service orientation and thus attempts to make a meaningful difference in lives of less privileged.
CSR outcomes and measurement impact can be done by implementing those strategic initiatives which could lead to educating, skill building, empowering and finally economic independence of those deprived.
The AOF has actively been involved in providing quality education to visually challenged students by providing free distribution of Braille text books, talking book library and instituting computer centers for excellence at multiple locations. The foundation works closely with its NGO partners like National Association for Blind (NAB) and All India Confederation for Blind (AICB) etc to develop skill sets of visually challenged people by organizing specialised workshops that enhance their communications skills, build confidence and prepare them to face a competitive world. Further, the foundation also strives for empowering them by creating assets which can help them lead an economically independent life. It partnered with Andh Kanya Prakash Gruh at Ahmedabad to start a store which sells daily utility items made by visually challenged girls of the school. Recently, it scaled up its BPO venture with Indian Blind Association, Madurai that handles outbound calls managed and run by visually challenged employees.
With availability of funds and right attitude there are ample of opportunities business houses can invest in and be part of societal change. Sooner or later, CSR will move away from philanthropy to a business imperative which is well planned, better executed and measured for its results and impact.
(The writer is Chairman, Amway Opportunity Foundation)