The Companies Act has Promise, but Will India Inc. Cash In? Business value and social good can converge if companies shift focus from compliance to results

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There is much excitement here in India around the potential of the year-old CSR component of the 2013 Companies Act to deliver on social impact. It’s the world’s first nationally-mandated CSR law and stipulates that 2 percent of corporations’ profits must be spent on CSR.

These funds can send 40 million children back to primary school, and keep them there for an entire year, based on Dalberg analysis. Hence, it is imperative that such funds are used wisely.

However, the surge in CSR spending stemming from the new law will only be successful if execution looks markedly different from how CSR and philanthropic money has been spent in the past.

Successful CSR should:

  • Focus on the company’s core competency
  • Promote the broader strategic objectives of the company
  • Connect CSR activities with the team’s passion

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