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A few days after the passing of the Companies Bill in Parliament which mandated eligible firms to set aside two per cent of their profits for corporate social responsibility (CSR) comes India’s first CSR index.
On Monday, Indian Institute of Corporate Affairs (IICA) and BSE signed a memorandum of understanding (MoU) in Mumbai to develop a CSR index.
Barometer
The mandatory CSR spend requires companies to look beyond shareholder value, make it a core driver of their strategy and in the long run attract more investment.
The index will provide a barometer for long term investors such as pension funds, insurance companies and funds with a mandate of ‘Responsible Investment’. The IICA was established by Ministry of Corporate Affairs (MCA), act as think-tank and centre of excellence to support the growth of the corporate sector in India.
The proposed IICA-BSE CSR Index shall assess impact and performance of companies of BSE-listed companies in CSR activities.
The evaluation parameters of the index would give preference to the information provided in the public domain on CSR activities by these listed companies.
This would then be combined with the market performance for selection of companies in the index. The index would be sector neutral.
IICA-BSE proposes to form an advisory committee to guide the construction and design of the index.
raghavendrarao.k@thehindu.co.in
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