In India, Corporate Social Responsibility (CSR) has a long tradition. However, under the recent Companies Act of 2013, any company having a net worth of ~$90 million, a turnover of twice this, or a net profit of ~$1 million (all converted from Rupees) should mandatorily spend at least 2% of its last 3 years average net profits on CSR activities. This, and support for sanitation by Prime Minister Modi’s Swachh Bharat Mission (SBM), are driving new investments into social welfare and sanitation projects.
For partners, STeP has undertaken a review of the CSR-based philanthropic funding landscape as it relates to sanitation in India. STeP has sought to identify opportunities for partners to leverage the growth in CSR initiatives to support pilot and scaling objectives. As part of this effort, STeP highlighted examples of private sector firms funding sanitation-related efforts through CSR activities.
This resource will be useful to public and private sector organizations as they consider how to deploy, receive, or form partnerships to support CSR investments that could drive development, testing, or launch of advanced systems in sanitation.
This report includes background information on CSR origins and its history in India. It summarizes the 2% rule and the requirements for its allocation. The resource presents company profiles and case studies of firms publicly highlighting their CSR initiatives in sanitation.
- The Corporate Social Responsibility Clause has a compulsory CSR obligation of 2% net profits on Indian companies and companies operating in India that have a net worth of $80 million, a turnover of at least $160 million, or net profits of at least $50 million.
- As of 2015, only 27% of eligible businesses spend greater than or equal to 2% of net profit but have a total of 3 years to average out their CSR spending to meet the goal.
- Currently installation of biodigestor systems are currently on the “approved list” of activities that count toward CSR efforts.
- STeP’s findings indicate that there may be a ramp-up in spending over the coming years in order to meet government requirements; however, to access these funds, organizations will need to ensure RT-based sanitation solutions are endorsed as CSR activities.