Corporate Social Responsibility in Tamil Nadu
Move from a responsive approach to a strategic one!
Background
On 1 April, 2014, India became the first country to legally mandate Corporate Social Responsibility (CSR). Seven years after its inception, CSR spending across the nation has more than doubled, becoming a significant source of development funding in India. There are now five corporates that contribute over INR 500 crores annually through CSR itself. CSR investments have also evolved from being only compliance focused to a more strategic impact-first approach, going beyond CSR regulations and standards. This form of strategic CSR leads to greater value creation for the communities, as well as gets greater buy-in from companies who now see the benefits of CSR on their businesses as well, making it a win-win for all.
Sattva’s experience over the years, showcases that data-backed insights provide an advantage for the decision-making process, specifically in socially responsible activities to implement more strategic CSR policies. The role of data is becoming increasingly critical in the social impact ecosystem to design and scale the most relevant and impactful initiatives.
Patterns in overall CSR spending
Over the six years of CSR, INR 92,605 crores of funding has been channelled by corporates towards development causes.
Analysing this broad ecosystem level data, we see that PSUs account for close to one-fourth of the CSR funding in India. Additionally, projects that are tagged as pan-India have received 38% funding, followed by those located in Maharashtra at 15%. Tamil Nadu is the 4th highest recipient state of CSR funds in India. Projects worth 42% of the funds have been channeled by implementing agencies, which has helped to further strengthen the non-profit sector in India.
The sectors of education, healthcare, vocational skilling, and art and culture are among those that are receiving higher CSR amounts with each passing year, whereas Swachh Bharat Kosh, conservation of natural resources and women’s empowerment initiatives have seen a declining trend.
Some insights from overall CSR spending in Tamil Nadu
Similar to the national story, the corporate sector is emerging as an important player in the development of Tamil Nadu state. Over INR 4000 crores of CSR funds cumulatively have been invested for social development projects in Tamil Nadu in the last six years (FY15 to FY21). 39% of the funds have been spent towards education, 20% towards healthcare and 8% towards rural development. This is in line with the broader national trend of these three sectors being the top areas of investment by corporates, cumulatively accounting for 59% nationally, against 67% in Tamil Nadu.
Tamil Nadu has received over INR 800 crores of CSR funding in each of the last two financial years (FY19 and FY20), accounting for 42% of the total CSR funds received over the six years. The top four spending companies – Neyvelli Lignite Corporation, BHEL, MRF and Sun TV Network – have contributed 16% of the total CSR spend that the state has received over the years. BFSI and Manufacturing are the highest contributing sectors, providing 16% and 12% funds respectively. Also, 72% of the CSR funds for Tamil Nadu are from companies which are also headquartered in the state.
While over one-third of the CSR expenditure by corporates are spent in Chennai and Coimbatore, only 1% of the CSR funds are going to the two aspirational districts. This is also aligned with the national observation of the aspirational districts receiving ~1.4% of total CSR spends, and some of the more industrialised districts and cities such as Pune, Mumbai, Hyderabad, Kolkata, and so on attracting most funds from corporates in their respective states.
A more detailed report of Tamil Nadu state with respect to the CSR investment and its development performance, can be accessed below.
You can also save a copy by clicking on the ‘Download’ link on the right side of the page.
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On 30 August 2021, we launched the report with a webinar and three panel discussions among key stakeholders in the Tamil Nadu CSR ecosystem. A summary note from the event can be accessed below.
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Sattva has been working with various non-profits and social organisations as well as corporate clients to help them define their social impact goals. Our focus is to solve critical problems and find scalable solutions. We assist organisations in formulating their long-term social impact strategy by strategically aligning with business to provide meaningful solutions to social issues.
We’d love to hear your thoughts and feedback on this topic. Do write to us: impact@sattva.co.in
