In a study conducted in 2016 among Indian companies, striking revelations were found out regarding spending of CSR money on career counselling. The study was conducted over 250 BSE listed companies.
India has mandated the spend on CSR for a particular set of companies and this makes them liable to invest in several social areas. Education is the sector that receives the highest funding from the country-wide CSR investment.
However, it is disappointing to know that not much out of it goes to career counselling. Some of the reasons relate to less visibility of results, less awareness and less understanding of how it takes place. Although several companies provide funds for infrastructure, yet the basic necessity of career counselling gets neglected by the corporate as well.
The primary spending companies need to focus on are
Here we cover the CSR laws in different countries and how India fares amongst them:
1. India
India is the only country where it is compulsory for companies with a net profit of Rs.5 crore, the minimum net worth of Rs.500 crores and Rs.1000 crore turnover has to contribute 2% of their profit in Corporate Social Responsibility.
Within section VII under the companies Act 2013, The CSR spending highlighted community development instead of a corporate building.
Regarding career counselling, CSR Laws do not explicitly mention career counselling, however, some companies have started investing in programs for career counselling. In India, only 1.3 % of CSR goes into career counselling and 17% of companies eligible for CSR actually spends in Career counselling.
2. United Kingdom
As per the governing documents, there is no part of the UK Corporate Governance Law that is specifically related to Corporate Social Responsibility, however, there is a recognition where the companies’ duties extend beyond shareholder value.
The companies Act 2006 of the country, however, expect the company directors to regard their duties towards the community and the environment. Companies in the UK spend only 0.5-1% of their pre-taxed profit on CSR. 50% of companies in the UK agrees to spend the amount on social development and 25% agrees on environmental development.
Although, not very clear in the laws, but it is worth mentioning that several corporates have taken CSR measures such as helping candidates with their professional profiles, helping them to connect with recruiters etc.
3. Canada
The Canadian government has no laws on spending on CSR by companies. The Canadian government enhanced the CSR strategy for Canadian companies in November 2014. According to Canadian government laws, companies have to spend on CSR in the host country they are operating in along with the home country.
There is a penalty on the companies that do not participate in CSR activities or misuse the policy. The Canadian government has simply put forward that any activity that supports community building comes under CSR. However, Canadian companies are aware of CSR activities and are giving good contributions to the measure.
4. Europe
European countries are highly active in CSR activities. Germany and Denmark are the most active European countries in CSR spending. Though most of the amount goes into business promotion and the very little amount goes to education and career counselling.
In fact, Germany and India have collaborated on this and have made a 3-year program to promote CSR funding in skill development and career counselling. Similarly, in 2009 Denmark mandated CSR reporting by all the companies with total assets of more than 19 million Euros or revenue of more than 38 million or having more than 250 employees.
There is not much information about the companies investing their funds for career counselling but the government has set up a CSR Centre of excellence which is supposedly one of its kind in the world.
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