In contemporary world, corporate sector's contribution in generating wealth and employment is increasing.…

Question

In contemporary world, corporate sector's contribution in generating wealth and employment is increasing. In doing so, they are bringing in unprecedented onslaught on the climate, environmental sustainability and living conditions of human beings. In this background, do you find that Corporate Social Responsibility (CSR) is efficient and sufficient enough to fulfill the social roles and responsibilities needed in the corporate world for which the CSR is mandated? Critically examine.

Ghissu Editorial · Accepted Answer

CSR is reasonably efficient as a channel for social spending but insufficient to discharge corporate responsibility, because no share of profit can offset harm built into the business model. Companies spent over ₹1.5 lakh crore on CSR between 2014-15 and 2021-22, yet environment received only a small share.

**Introduction**

Since CSR became mandatory under Section 135 of the Companies Act, 2013, companies spent over ₹1.5 lakh crore on it between 2014-15 and 2021-22 (National CSR Portal). Yet the same growth drives emissions and displacement, so the test is whether a 2% spend can discharge corporate responsibility.

**Where CSR Has Been Efficient**

1. **Mobilising resources**: CSR channelled assured private money into education, health and skilling, including Covid-19 health infrastructure.
2. **Working models**: Hindustan Unilever's Project Shakti made rural women micro-entrepreneurs, and the Akshaya Patra mid-day meal partnership improved service delivery.
3. **Tighter accountability**: The CSR Amendment Rules, 2021 made unspent funds transferable to designated accounts and required impact assessment for large projects.

**Why CSR Is Neither Fully Efficient nor Sufficient**

SKETCH: iceberg | CSR vs Corporate Footprint
visible: Schools, hospitals, CSR reports
hidden: Emissions, pollution, displacement, unsafe work

1. **Compliance mindset**: Spending clusters near headquarters, so Maharashtra gets the largest share while the North-East gets little.
2. **Mismatch with harm**: Environment gets a small share though the core damage of many firms is ecological.
3. **Moral cover**: The LG Polymers leak in Visakhapatnam (2020) and Sterlite's closure in Thoothukudi (2018) show philanthropy cannot offset unsafe operations, a form of **Greenwashing**.
4. **Narrow frame**: Workers, consumers and supply chains lie outside Section 135, so SEBI's BRSR Core (2023) and the polluter-pays principle must work alongside it.

**Conclusion**

CSR is reasonably efficient as a channel for social spending but insufficient as corporate responsibility, since no share of profit compensates for harm built into the business model. Responsibility must move from the 2% to the 98% through ESG disclosure and Gandhi's trusteeship.

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