Corporate Social Responsibility (CSR) Amendment 2022: What's New in the Store?

Corporate Social Responsibility (CSR) is a concept where corporates/organisations integrate social and environmental concerns in their business operations and interactions with their stakeholders. Simply put, CSR is when a percentage of the organisation’s profit is provided to social impact projects to ensure social good in the community and environment. In the current times, many organisations are participating in CSR activities and budgeting. Further, the number of organisations indulging in CSR activities has been increasing uniformly.

India is one of the first countries that mandated CSR for organisations if they fulfil certain criteria. Since 2013, organisations have been mandatorily practising CSR, where organisations fund projects that are working to resolve social evils. The organisations look to fund one or more thematic areas laid by United Nations, Sustainable Development Goals. The Companies 2013 has had up to 5 amendments since then. The Act has streamlined, regulate, and provide guidance to organisations to conduct their CSR activities based on the organisation’s values and brand image.

On the 20th of September 2022, a new amendment came into effect, which further streamlined the CSR process in India. The amendment has covered aspects such as the formation of a CSR committee, unspent CSR funds for ongoing projects, expenditure for impact assessments and changes in the CSR annual report.

Apart from these, the government has provided more defined eligible criteria qualifying as CSR. Any project that solely benefits the employees or makes political contributions cannot be termed a CSR activity. Also, how an organisation requires to spend the unspent CSR fund is also mentioned in great detail. 

Understanding how the funded project is implemented in the field is crucial. To do so, impact assessments are conducted by external bodies (to avoid bias) that could help both the corporates and the NGOs to understand how effective the project is. The 2022 amendment has provided a cap on the impact assessment expenditure and who should do it. Apart from these, the transparency of CSR activities is also to improve based on information provided on the website. Details annual report and so on.

Over the years, the Companies Act has been promoting philanthropic activities, accountability, transparency, and creating a real impact in the community. SYNE is a social impact platform that connects individuals, groups, corporates, and NGOs to develop social impact projects. Additionally, SYNE could help all the parties involved in the impact assessment journey to ensure the project maximises its impact on the community and the environment.