India's new Companies Act to change CSR

Author: Ashley Lee | Published: 20 Nov 2013
  • India’s new Companies Act imposes minimum CSR spending requirements on the country’s corporates;
  • This is believed to be an international first;
  • The regulations apply equally to domestic companies and multinationals, and public and private companies, that meet certain monetary thresholds;
  • The Act requires qualifying companies to spend two percent of the average net profit from the last three years on CSR initiatives;
  • Companies that do not choose to comply with these CSR regulations can submit a disclosure about their non-compliance – there is no official penalty;
  • It is thought that companies will follow the CSR requirement due to public pressure and reputational concerns.

An Indian statutory requirement for companies to spend a set percentage of their profits on corporate social responsibility (CSR) is believed to be an international...