Share of funding spent on environmental initiatives in 2023-24, Pg10

Key Highlights:

• Only 8.4% of the total Corporate Social Responsibility (CSR) spending in India was allocated to environmental initiatives in the financial year 2023-24.
• A report by Sattva Consulting revealed this figure, highlighting a low focus on environmental causes.
• Over the past three years, 30 of India’s 50 most climate-vulnerable districts received only 1% (₹106 crore) of the total environmental CSR spending.
• Total environmental CSR spending over the last decade amounted to ₹17,377 crore.

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Detailed Insights:

• The Companies Act, 2013, mandates that eligible companies spend at least 2% of their average net profit from the preceding three years on CSR activities.
• Companies with a net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or a net profit of ₹5 crore or more are subject to CSR provisions.
• Schedule VII of the Companies Act, 2013, outlines the approved CSR activities, which include promoting environmental sustainability, education, and healthcare.
• The Sattva Consulting report indicates a significant disparity between the areas receiving environmental CSR funds and those with the highest climate risk.
• India is recognized as one of the most climate-vulnerable countries, with a large proportion of its districts susceptible to hydro-meteorological disasters.
• The ₹17,377 crore spent on environmental CSR over a decade is a small fraction of the estimated $2.5 trillion needed to achieve India's Nationally Determined Contributions (NDCs) by 2030.
• Environmental CSR funding is primarily directed towards water management, renewable energy, and plantation activities, often through small-scale, multi-location projects.
• Achieving the goals of Viksit Bharat 2047 and India's Net Zero 2070 commitment necessitates substantial investment in climate solutions.

Key Concepts Involved:

• Corporate Social Responsibility (CSR): A mandatory obligation under the Companies Act, 2013, for eligible companies to contribute to social and environmental welfare.
• Companies Act, 2013: Indian legislation that legally mandates CSR for qualifying companies, defining spending thresholds and permissible activities.
• Climate Vulnerability: The susceptibility of a system to the adverse impacts of climate change, including climate variability and extreme weather events.
• Nationally Determined Contributions (NDCs): Climate action targets set by countries under the Paris Agreement to reduce greenhouse gas emissions and adapt to climate change.