(Update, I had a noted on LinkedIn saying this below only applies to charity work, not real sustainable business practices, but that’s not what the article linked to above indicates, so I will do some further digging)
Leaving aside the intellectual challenges (read: impossibility) of separating out CSR from ‘real’ business for a moment, from a policy point of view it’s like something from a Monty Python sketch, only not funny.
Thankfully, according to one of India’s leading CSR experts whom I spoke with this week, this idea will soon be reversed by the new Modi BJP government.
Here’s what it suggests, from the article:
“…the Rules accompanying the Companies Act, 2013 say that CSR activities must be undertaken by a separate entity – it could be trust, a society or another company set up specifically for the purpose.”
But not to worry, it gets better:
“It is not necessary that these trusts, societies and companies should be set up by the company on its own – companies can work with an existing independent one that has a three-year track record for carrying out such activities.”
All, however, is not lost:
“Companies can also collaborate with other companies for a joint CSR programme – provided each can identify and report separately their part of the joint activity and what was achieved.”
Here’s a final excerpt:
“Effectively, the new Act and its Rules make it necessary for companies to spin off CSR activities that are currently carried out internally into a separate entity registered as a trust or a society or a not for profit company.”
Read the rest here. If all of this is true, it is both astonishing, and stark raving bonkers.
Thankfully, as mentioned, my well informed contact I spoke with this week said this will be reversed, and (some) sanity on CSR policy implementation should soon prevail.
Assuming that is true (and I would bet on it, given the lunacy of some of the suggestions) then there is one very valuable lesson to learn here. I’ll discuss that in the next post on this blog.