Economy

‘Corporate social responsibility is not just spending 2% of profits’

Our Bureau Visakhapatnam | Updated on March 25, 2013 Published on March 25, 2013

It is not enough for companies to spend the mandatory 2 per cent of their net profit on corporate social responsibility projects and they must also display social sensitivity and responsibility in earning the remaining 98 per cent of profits as well, according to R. Shankar, Executive Director of the Rashtriya Ispat Nigam Ltd (the Visakhapatnam Steel Plant).

He was speaking as the chief guest at the inaugural of a two-day national seminar on Gandhi's trusteeship concept and the corporate social responsibility organised by the Gayatri Vidya Parishad here on Monday.

He said the concept of CSR would really become meaningful only “when the customer evaluates the product based on the producer’s track record of social sensitivity, corporate social responsibility.”

For instance, he said if a company's activities cause damage to the environment it will be of no use even if it spends the mandatory 2 per cent or more on CSR.

He said there was a sea change in the way CSR activities of a company were being evaluated now.

The senior officials of the State Bank of India, who had visited Visakhapatnam Steel Plant to hand over the formal letter advancing a large loan to the company recently, were keen on the kind of impact RINL's CSR activity had on people.

He said, “All the senior management and directors of the public sector units have to sign an annual statement of fiduciary responsibility which actually binds the officials to work as trustees of public resources. This is the concept of Gandhiji’s trusteeship, but unfortunately officials treat the annual statement as a mere formality and merely append their signatures to it. They do not for once realise that they have committed themselves to the role and should live up to it.”

Companies should be ready to spend a quarter of their net profit on socially relevant activity, former Vice-Chancellor of Acharya Nagarjuna University V. Bala Mohan Das said.

Prof. Prasanna Kumar, former rector of Andhra University, said Gandhiji's teachings could be interpreted in different ways, but there was no doubt about the relevance of his concepts like trusteeship and the concept of CSR could be related to it in a meaningful way.

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Published on March 25, 2013
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