The UN Sustainable Development Goals (SDG) framework is important to India as it targets ending poverty in all its forms. India played an important role in shaping the seventeen SDGs, the composite rank of which is assessed on a scale of 0 to 100 with all goals treated equally. India ranked 121 out of 193 countries with a score of 60.32 in 2022. Creditable as it is, it must improve further, which needs great funding. The additional financing to meet the SDG targets by 2030 is estimated at Rs 12.1 trillion and Rs 53.6 trillion for health and education. How does a nation which has upliftment of a large number of people as an important objective, fund the SDG’s?
Corporate Social Responsibility (CSR) is one avenue that is available, since it shares the thematic development areas with that of SDG’s. It is a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public. Its responsibilities include environment ethics, philanthropy and economy. Education, health, rural development, setting up orphanages, slum area development, socio-economic inequalities, special education, Swachh Bharat, sanitation, safe drinking water, technology incubators, and training are all CSR activities as much as SDG’s. CSR benefits the industry in boosting their brand value and the society by protecting the environment. Shouldn’t then the more visible and successful companies, show more responsibility and set standards of ethical behaviour for their peers?
As per the European Union (EU), Industry 5.0 provides a vision that aims beyond efficiency and productivity as the sole goals, reinforcing the role and the contribution of industry to society. It places the wellbeing of the worker and the planet at the centre of the production process.
Whereas Industry 4.0 was all automation of the highest level, a report in Forbes, authored by Jeroen Kraaijenbrink cites the EU, which envisages Industry 5.0’s vision as aiming beyond efficiency and productivity as the sole goals, 3P bottom line, as central, new technologies as providing prosperity beyond jobs and respecting the production limits of the planet. Research and innovation must service a sustainable, human-centric and resilient industry.
NITI Aayog estimates approximately 13% of the GDP to achieve the SDG commitments by 2030. Current spending is an average 7% of GDP though it was 8.3% in 2021. It is mandatory for the companies covered under section 135 to spend a minimum of 2% of their net profit over the preceding three years as CSR. 2021 saw 1,619 companies spend on 8,000 CSR projects, a sharp decline from the previous year when 22,531 companies showed CSR spends. In terms of contributions, it was down 64% to Rs 8,828 crore in 2020-21 from Rs 24,689 crore the year before. Even as Maharashtra, Karnataka, Gujarat, Andhra Pradesh and Tamil Nadu accounted for 33% of the spend, 60% of it went into education, health care and rural development-related activities. The unspent amount over three financial years however, will merge with the PM relief fund.
Given that some States are very industrialised and some with hardly any big industries, the most industrialised states have received most of the funds. Maharashtra, with Rs 15,000 cr, Karnataka with Rs 5,922 cr and Gujarat with Rs 5,294 cr led the race.
Small and midsize businesses also create social responsibility programs, although their initiatives are rarely as well-publicized as those of larger corporations. Can the budget acknowledge them with a tax rebate?
Some steps that the government must seriously consider are seeking replenishment of natural resources or supporting causes that help neutralize negative impact on the environment. Pollution, waste, natural resource consumption, and emissions through manufacturing processes must all come down. If trees are cut, new ones must be planted too. Mandating switchover from gas to electricity and use of recycled materials could also be good moves.
CSR strategies may be difficult to assess because many of them are qualitative rather than quantitative. The government may insist on 100% ethically sourced resources, green buildings, EV’s, community services, training, reduction in energy consumption and limit industry-wide emissions.
Can we also expect a 0.5% rise in the existing 2% of the net profit in the budget and a much closer digital monitoring of the corporates on their CSR spend in the budget? After all, responsibility is not that of government alone.