New Companies Bill stresses CSR - Financial Express
December 17, 2009
The Companies Bill 2009 has proposed laying guidelines for corporate social responsibility, although it does not intend to infringe the voluntary aspect of CSR, according to a top corporate ministry official.
Minister of corporate affairs Salman Khurseed has said the objective of incorporating CSR in the Companies Bill is to guide India Inc on the way of making money that helps inclusive growth.
Corporate affairs secretary R. Bandopadhyay said CSR is one area in which President Pratibha Patil takes a huge interest. In fact, the Bill seeks to make CSR an integral part of corporate governance and both corporate governance and CSR would come under the Act.
Besides the normal process of taking the President of India's consent following a Cabinet nod for transforming a Bill to an Act, the 31-member parliamentary committee looking into the issue of corporate law would shortly present the CSR guidelines before the President, Bandopadhyay said.
The guidelines would allow India Inc to take voluntary initiatives, too. However, principles would be laid so that it becomes mandatory for India Inc to mitigate with the climate change issues, Bandopadhyay said.
While oil behemoth ONGC Ltd has already framed a climate change policy, coal behemoth Coal India Ltd (CIL) is debating the issue. According to CIL chairman Partha. S Bhattacharyya, though CIL is not a carbon emitting company, it ensures that after a mine's life is over, both open cast and underground land reclamation is properly done to ensure environmental protection.
CIL has engaged Central Mine Planning & Design Institute (CMPDI) and National Remote Sensing Agency (NRSA) for satellite surveillance, which would bring 172 open cast mines under its ambit within the next three years, Bhattacharyya said.
"We are trying to frame a system of corporate governance in terms of people, planet and profit. Our emphasis is now on a triple bottom line wherein the first priority would be people, second planet and profit the last," Khursid said.
"We want to present a model of CSR currently unknown to the rest of the world," he added.
According to ITC Group vice-president Nazeeb Arif, although the company has been long propagating triple bottom line, it has not talked of making CSR statutory. "But if CSR has to reach a meaningful dimension, there should be a mechanism of rating companies based on triple bottom line, which also needs to be given incentives," Arif said.
"Statute should provide for a rating system, understandable to consumers. Consumers should drive companies to make social investments," Arif said.
However, the Bill is still open for comments of all stakeholders, said Bandopadhyay. "Our final guideline will come only when we are able to converge all diverse opinions to a consensus," he said.
A Tata official said even as there are no statutory CSR guidelines as yet, 66% of the profits generated by the Tata Sons goes back to the society through various trustees.
