- When law takes effect | Conversion of CSR benefits never so challenging: Rajib Kumar Debnath
Business Standard takes stock of key changes in the legal and regulatory environment in the course of the year, and how it impacted businesses.
Conversion of CSR benefits never so challenging: Rajib Kumar Debnath
The challenges imposed on India Inc by the Companies Act, on the CSR component is not the spend. Rather, it is on how it has to be spent, as stakeholders concerned would now, not just see it as a benevolence, but also from the perspective of accountability.
Conversion of CSR‘s qualitative benefits into quantitative impact, to be able to monitor, evaluate, measure and demonstrate the degree of improvement has never been so challenging. To combat such challenges, progressive companies are embracing concepts like ‘Social Returns on Investment’, followed by third-party evaluation of performance, according to widely accepted ISAE 3000 of International Auditing and Assurance Standards Board.
While for India Inc, the financial framework is quite robust, challenges however remain with respect to assessment of material risks and compliance issues emanating primarily from the environment, health, safety and social (EHS&S) domain. Unlike the finance-based laws, it is more of a challenge, since the focus of compliance of EHS&S-based laws is more on the basis of actual implementation at the site rather than on documentation. Moreover the EHS&S domain calls for an understanding of umpteen advance science related technical terms.
Ignorance of appropriate domain knowledge and technical understanding of the operations and processes could lead in inappropriate scanning of risks/legal requirements, leading to a risk of release of an inappropriate Board of Directors’ statement and thereby inviting attention from stakeholders and primarily the enforcement authorities.
Rajib Kumar Debnath
ED & Leader of Sustainability & CSR, Grant Thornton India LLP
The article appeared in Business Standard. The complete article can be found here.