Abstract
The juggernaut of globalization and the forces of hyper competition have kept Indian corporations busy pushing growth and profits. The Companies Act and Corporate Social Responsibility (CSR) rules in India mandate certain categories of businesses to fulfill their social and environmental responsibilities. Twelve activities are listed where CSR funds can be employed. However, most companies choose to spend their funds on healthcare and sanitation, education, rural improvement, and arts and culture. This is hardly surprising, as it can potentially improve the company’s image in the eyes of its customers. On the other hand, the natural environment is a distant seventh preference of the top 100 companies. This prompts a question—does nature conservation, specifically biodiversity, matter to companies? Even as increasing production and consumption have impacted natural systems, the answer to this question is hardly encouraging. In this chapter, we discuss the findings from our study of CSR spending of corporations in India. We examined the CSR expenditure data of select companies, from their 2017 annual reports, National CSR India portal data, and CSR surveys such as KPMG CSR Reporting Surveys of N100 (ranked on National Stock Exchange on the basis of market capital) companies. From this study, we try to understand the motivations behind nature conservation, expected outcomes from this expenditure, and challenges in biodiversity and nature conservation as a CSR goal. This chapter concludes by arguing why biodiversity conservation should matter to businesses and what could be the possible policy measure to enhance this funding.
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Notes
- 1.
India was one among a few nations to introduce corporate social responsibility (CSR) as mandatory through enactments such as the Companies Act, 2013 (Section 135) and the CSR (Policy) Rules, 2014. The Ministry of Corporate Affairs is entrusted with enforcement and regulation of these legislations. As per the provisions of these Acts, a company fulfilling any one of the following criteria in a financial year is obliged to spend 2% of its net profit towards CSR projects as identified and approved by its CSR Committee :
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a net worth of INR 500 crore or
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a turnover of INR 1000 crore and more or
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a net profit of INR 5 crore and more.
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- 2.
Schedule VII of the Companies Act enlists areas for CSR activities to be incorporated and executed by companies in their CSR policies and programs. Broadly, these areas are health, education, environment, rural development, reducing inequality, P.M. Relief Fund, art and culture, sports, war veteran, technology business incubator, and women empowerment. Such companies are required to set a board-level CSR Committee, which would formulate CSR policy, recommend CSR projects, and determine budgets for the same. The CSR Committee shall also establish a monitoring mechanism for CSR projects and conduct reviews of these projects. Moreover, CSR disclosures shall be made in the Director’s annual report.
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Ranked on National Stock Exchange on the basis of market capital.
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Nulkar, G., Bedarkar, M. (2020). Does Nature Conservation Matter to Corporations?. In: Sharma, R., Watve, A., Pandey, A. (eds) Corporate Biodiversity Management for Sustainable Growth. Environment & Policy, vol 59. Springer, Cham. https://doi.org/10.1007/978-3-030-42703-0_5
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