CSR activities Social Impact Assessment reporting

Social impact assessment (SIA) is an important tool for Corporate Social Responsibility (CSR) initiatives in India. Here are some key points about social impact assessment in the context of CSR in India:

  1. Definition: SIA is the process of evaluating the social and economic impact of a proposed project or program. In the context of CSR, SIA is used to evaluate the impact of CSR initiatives on the communities they are intended to serve.
  2. Importance: SIA helps to ensure that CSR initiatives are designed and implemented in a way that maximizes their impact and benefits to the community. It helps companies to understand the needs of the community, and the potential positive or negative effects of their CSR initiatives.
  3. Process: The SIA process typically involves a baseline study to understand the social and economic conditions of the community, an assessment of the potential impact of the CSR initiative, and ongoing monitoring and evaluation to track the progress and impact of the initiative.
  4. Key stakeholders: The SIA process should involve key stakeholders, including representatives of the community, NGOs, and government agencies. This helps to ensure that the needs and perspectives of all stakeholders are taken into account.
  5. Reporting: Companies are required to report on their CSR activities in their annual report, including details of the SIA process, the results of the study, and the steps taken to mitigate any negative impacts of the CSR initiative.
  6. Regulatory requirements: The Companies Act, 2013 requires companies that meet certain financial criteria to spend a percentage of their profits on CSR activities. The Act also requires companies to undertake SIA for CSR initiatives that are expected to have a significant impact on the community.

Overall, SIA is an important tool for ensuring the effectiveness and impact of CSR initiatives in India. By involving key stakeholders and undertaking a comprehensive assessment of the potential impact of their initiatives, companies can ensure that their CSR activities are aligned with the needs of the community and are making a positive difference.

Established in 2007, Responsenet works on the need for community-centric interventions to address the most pressing challenges affecting communities every day. Responsenet has and continues to impact millions of lives through our cross-sector and diverse implementations across India.

We serve those most in need to make the impact better every day with a focus on the quality of aid and a micro local focus. We believe the right innovations and right partnerships have the ability to create the right lasting impact for radical yet sustainable transformations.

With an empathic approach from communities we work with, we serve those most in need of their life-saving and well-being focussed needs as mandates. These range from rapid response interventions for family or individual emergencies to longer-term multi-year projects of education, nutrition, hunger, jobs, and empowerment.

Responsenet has impacted millions of lives through our diverse implementations and has worked with over 283 companies across India for CSR mandates along with our ongoing programs.

Specific to the impact assessment the scope of the Impact Assessment Survey would entail the following:

1. Conducting Impact Assessment Survey, to evaluate the impact of developmental interventions carried out.
2. Programmatic Review – Monitoring, evaluation, recommendation & reporting of the CSR projects carried out.
3. Collate quantitative data on the number of beneficiaries who have directly benefited from each of the interventions.
4. Gather qualitative information from the beneficiaries on the benefits.
5. Gap Analysis of expected project outcomes (as per proposal) vs actual on-ground delivery.
6. Detailed review of delivery to beneficiaries
7. Assessing impact upon completion of the CSR Projects and recommendations for future CSR roadmap based on assessment.

Frequently Asked Questions (FAQs) on Corporate Social Responsibility (CSR) Impact Assessment

What is the objective of providing an impact assessment of CSR activities?

The purpose of impact assessment is to assess the social impact of a particular CSR project. The intent is to encourage companies to take considered decisions before deploying CSR amounts and assess the impact of their CSR spending. This not only serves as feedback for companies to plan and allocate resources better but shall also deepen the impact of CSR.

Which companies are required to undertake impact assessment?

Rule 8(3) of the Companies (CSR Policy) Rules, 2014 mandates following class of companies to conduct impact assessment:
(i)  companies with minimum average CSR obligation of Rs. 10 crore or more in the immediately preceding 3 financial years; and
(ii)  companies that have CSR projects with outlays of minimum Rs. 1 crore and which have been completed not less than 1 year before undertaking impact assessment.

Impact assessment shall be carried out project-wise only in cases where both the above conditions are fulfilled. In other cases, it can be taken up by the company on a voluntary basis.

Whether companies are required to undertake impact assessment for FY

The provisions for impact assessment have come into effect from 22nd January, 2021. Accordingly, the company is required to undertake impact assessment of the CSR projects completed on or after January 22, 2021. However, as a good practice the Board may undertake impact assessment of completed projects of previous financial years.

Who can conduct impact assessment?

Rule 8(3) of the Companies (CSR Policy) Rules, 2014 requires that the impact assessment be conducted by an independent agency. The Board has the prerogative to decide on the eligibility criteria for selection of the independent agency for impact assessment.

Whether impact assessment reports of all the CSR projects shall be annexed to the annual report on CSR?

Rule 8(3)(b) of the Companies (CSR Policy) Rules, 2014 provides that impact assessment reports shall be placed before the Board and shall be annexed to the report on CSR. It is clarified that web-link to access the complete impact assessment reports and providing executive summary of the impact assessment reports in the annual report on CSR, shall be considered as sufficient compliance of the said rule.

When two or more companies collaborate for implementation of a CSR project, should the impact assessment carried out by one company be shared with other companies?

Yes, in case two or more companies choose to collaborate for the implementation of a CSR project, then the impact assessment carried out by one company for the common project may be shared with the other companies for the purpose of disclosure to the Board and in the annual report on CSR. The sharing of the cost of impact assessment may be decided by the collaborating companies subject to the limit as prescribed in rule 8(3)(c) of the Companies (CSR Policy) Rules, 2014 for each company.

Social impact assessment

It is used to identify and manage the social impact of certain projects. It is a holistic approach to assessing the impacts associated with plans, policies, projects, and other developments on the stakeholders, beneficiaries, and the community.

The social effects of planned development interventions are measured so that those interventions can be tweaked according to the needs and contingencies of the society, community or even the locality where the projects are implemented.  

Social audit

Critical stocktaking of any project primarily focuses on the quality of work being executed on all levels. The basic objective is to ensure accountability in the implementation of the projects.

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