Be Socially Responsible Corporations: Uncover the Essential Legal Requirements of Corporate Social Responsibility in India!

Corporate Social Responsibility (CSR) refers to actions taken by companies to contribute to social goals beyond their traditional business activities. CSR involves integrating social? concerns into a company's business operations and interactions with stakeholders, such as employees, customers, suppliers, communities.

In India, CSR is primarily governed by the Companies Act, 2013. They are required to spend at least 2% of their average net profit of the past three years on CSR activities.

The Essential Legal Requirements for Corporate Social Responsibility in India

Board approval: The board of directors of a company must approve the CSR policy and activities, and ensure that they are in line with the company's business and development goals.

Setting up a CSR committee: Companies that meet the eligibility criteria must set up a CSR committee consisting of at least three members, one of whom must be an independent director.

Disclosure of CSR policy: The CSR policy of the company must be disclosed on the company's website, and in the Board's report. This report must detail the activities undertaken by the company, the amount spent on these activities, and the impact they have had.

Spending at least 2% of profits on CSR activities: Companies that meet the eligibility criteria must spend at least 2% of their average net profits of the preceding three years on CSR activities.

Prioritising local communities: Companies must give priority to the local areas in which they operate for their CSR activities. They must ensure that the projects they undertake have a positive impact on the communities in which they operate.

Notifying the Ministry of Corporate Affairs: Companies must notify the Ministry of Corporate Affairs about the details of their CSR policy and activities, as well as the amount spent on these activities.

Monitoring and evaluation of CSR activities: Companies must monitor and evaluate the impact of their CSR activities and report on the results to the CSR committee and the board of directors.

But Unfortunately, some companies attempt to evade their social and environmental responsibilities or falsely boost their reputation, a practice known as CSR evasion or greenwashing. This can take the form of making false sustainability claims, exaggerating the impact of CSR activities, or carrying out token gestures that have no real effect.

In some cases, companies may even create fake charities or NGOs to give the illusion of contributing to social causes, while not doing anything of actual value.Therefore, it is paramount to scrutinise companies' CSR claims and hold them to account for their actions. This can involve conducting independent audits, monitoring a company's environmental and. 1? 0 ? social impact, and supporting genuine CSR initiatives that have a measurable impact.

In conclusion, while CSR evasion and greenwashing are unfortunately prevalent, it is important for stakeholders to remain vigilant and hold companies accountable for their social and environmental responsibilities. Genuine CSR initiatives can benefit both society and the company in the long run, and companies that prioritise CSR are more likely to build trust and loyalty among their customers and investors

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