Evolving Environmental focus in CSR spending by companies
India Inc. is reprioritising its spending under corporate social responsibility (CSR) obligations. As the focus on sustainability gathered traction, CSR expenditure on the environment more than doubled in FY22 from a year before to Rs. 2,837 crore and the sector emerged as the biggest recipient of such funds after health and education. Similarly, the pandemic prompted companies to sharply raise spending on health, which has now beaten education as the top sector for CSR expenditure. Spending on health stood at Rs. 9,987 crore in FY22, against Rs. 8,382 crore on education, according to an ET analysis of the latest segregated (provisional) data by the Ministry of Corporate Affairs (MCA). The health category also includes initiatives on hunger, poverty and malnutrition, safe drinking water and sanitation.
Total CSR expenditure in FY22 stood at Rs. 25,933 crore, a tad lower than Rs. 26,211 crore in the previous year, mirroring a decline in corporate profitability. As many as 18,623 companies spent the CSR funds on 42,440 projects across 14 broad development sectors in FY22. Although the environment category includes animal welfare and conservation of resources, environmental sustainability made up over 83% of the CSR spending in this category in FY22.
According to rules, companies of a certain size are required to spend, annually, at least 2% of their average net profit made in the previous three financial years on stipulated social initiatives.
