There is no single universal definition of CSR. It is an age-old concept that long existed in India, Mahatma Gandhi has emphasised that corporations are the trustee of the wealth of the society and not the owners of it. They have the responsibility of looking after society in a sustainable way. CSR translates to the responsibility of the corporates/ enterprises for their activities towards the society.
India is the first country in the world to make CSR spending mandatory. Indian firms have long been doing philanthropy traditionally. To streamline these traditional activities and make the companies liable for the development of the society in an economically, socially and environmentally sustainable manner, famously known as the triple bottom line approach of CSR.
The Companies Act, 2013 has given provisions for CSR (Section 135) like the firms liable to CSR spending, modalities of activities to choose, reporting etc. The Schedule VII of the Companies Act has a list of activities that qualify as CSR activities and these activities are in alignment with the Sustainable Development Goals (SDGs) of the UN.
The Schedule VII activities emphasise on the environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, clean Ganga fund, conservation of natural resources, and maintaining the quality of soil, air and water. These activities are further addressed as environmental CSR. These activities aim to reduce the environmental damages created by businesses through their CSR obligations.
Table 1: CSR expenditure towards environmental sustainability activities against the total CSR expenditure.
Total CSR Expenditure
Total Environmental CSR Expenditure (Rs.in Cr.)
Percentage of environmental CSR (%)
- CSR Data Portal (Accessed at csr.gov.in)
- Environmental CSR Expenditure includes expenditure towards environmental sustainability, conservation of natural resources, Agroforestry, Animal welfare and clean Ganga fund.
Sector-wise comparison of CSR amount spent from FY 2014-15 to FY 2020-21
The above trends depict how the Indian corporates give preference to sectors like Healthcare, Education rather than environmental sustainability, due to various reasons, but primarily because the environmental activities usually have a longer gestation period, and difficulty in evaluating the exact impact. The factors make them less advertisable as compared to the social activities which are clearly measurable and can be more visible in terms of reach of beneficiaries.
Apart from the challenges mentioned above, the corporates face a lack of qualified implementing agencies specialised in restoration and carbon sequestering initiatives, absence of favourable policy interventions, approvals from various departments, red tape and lack of branding of forest initiatives.
Khojasthepour, M. and Johns, R. (2014) in their article ‘The effect of environmental CSR issues on corporate/brand reputation and corporate profitability’ investigated the consequences of ecological corporate social responsibility on corporate profitability. They found out that there exists a positive impact of environmental CSR on Corporate brand reputation and profitability.
Lattemann, C. et al (2009) have analysed the 68 largest multinational companies in China and India, has shown that Indian firms’ intensity of communication about CSR is more than China primarily because it is compliance based and not relation-based. The manufacturing sector firms tend to communicate more about their CSR initiatives.
Branding is one possible way to make firms willing to align their CSR goals towards environmental sustainability. The firms may be encouraged to forest restoration activities by giving them branding rights to these forests that they maintain. There can be minimum area of land that is notified by the government as forest area which was subjected to deforestation, which can be adopted by the firms to make them flush with forest cover and name it after their product or company. Example ABC Forest etc.
Latest techniques in afforestation can also be used like the Miyawaki Forests. Firms can plant forests at their vicinity in a small patch of an area using this technique. In this type of afforestation, 50 to 100 native plant species are selected and planted as seedlings in a random mix and grown naturally without any fertilizers or manures. The seedlings are planted very densely around 20000 to 30000 per hectare compared to 1000 seedlings per hectare in commercial forestry. The site is watered and monitored regularly for 2 – 3 years. The plants compete each other for space, nutrients, light and water and mimic the natural forest growth. Hence, they grow at much faster rate compared to conventional method. This technique would help firms reach out its environmental goals faster and a sustainable way.
There are many successful CSR projects of India firms in forest restoration like Project Hariyali of Mahindra. This project has an aim of planting 1 million trees annually. It addresses the challenge of climate change, and support livelihood opportunities of the local people. Around 18 million trees are planted under this scheme making it an entry into the ‘Limca Book of World Records for most trees planted. This project has helped in the sequestration of more than 3.9 Lakhs tonnes of carbon. Their afforestation initiatives also complaint with UNFCCC’s Kyoto protocol guidelines.
Sustainable Agroforestry model of ITC Ltd., where they encouraged the farmers to take up cultivation of maize and chilli in the place of eucalyptus plantations which helps in restoration of groundwater and also increase the farmers’ income. Over 1.11 Lakh acres of agroforestry have been provided to the local farmers under ITC – CSR initiatives. These initiatives have led to 54.58 Lakh tonnes of carbon sequestration.
Assessment of effectiveness of these Environmental CSR activities
GREEN COMPETITIVE ADVANTAGE
Lin, Y.H and Chen,Y.S. (2017) have defined the green competitive advantage as the position of the firm regarding the ecological management or sustainable development that cannot be imitated by other firms. This study holds that the dimensions of Environmental CSR significantly influence green competitive advantage by means of ecological management.
GREEN CORPORATE IMAGE
Bathmanathan and Hironaka (2016) defined green corporate image as a driving factor in current times, where the firms carry out environmentally sustainable activities for building a sustainable image among the consumers with an aim to increase the competitiveness and capture market share.
Widyastuti et al (2019) argued that the strength and quality of a green corporate image would have an impact on building a green competitive advantage for the firm. They also added that to attain sustainability firms are to exert sufficient effort for establishing a green corporate image.