• Spruha

Role of the Corporate Sector In Disaster Management (CSR)

India is currently seeing the biggest ever pandemic wherein it loses thousands of lives every day. The natural calamities impact millions of people across the country leaving behind a trail of heavy loss of lives, property, and livelihoods. Losses due to the disaster tend to outweigh the development gains in the many parts of the country. In recent years, the severity and frequency of natural disasters have risen, resulting in increased human and economic losses. Such disasters affect households, communities, small and medium enterprises, which bear a high proportion of the losses. India has been reactive to its approach towards natural calamities- with resources spent on the relief, rehabilitation, and reconstruction efforts. But being the second most populated country, the government alone cannot work that efficiently. Thus, here comes the role of the corporates that makes a big difference in the relief work. The CSR activities of the corporates play a pivotal role in the post-disaster relief, rehabilitation and reconstruction efforts in the affected areas. The CSR contribution in developmental work through employee contribution, funds, or donations make it easy for people to get back on track. Recognizing the importance of integrating the corporate sector in disaster management, the Government of India has included all disaster relief expenditure as part of the Corporate Social Responsibility (CSR) contribution. Corporate Social Responsibility Policy (CSR Policy) has become a common practice nowadays. Most of the companies have come forward in various philanthropic and CSR work. Most companies have long practiced some form of corporate social responsibility and environmental responsibility with the broad goal of contributing to the well-being of society. But nowadays, there is increasing pressure to show CSR as a business routine that has to deliver the best result. Having a CSR policy of the company enhances the reputation of the company, contributes to the company's financial results, and helps the community at large. The companies must refocus their CSR activities on fundamental goals and provide a systematic process for bringing coherence and discipline to CSR strategies. According to the Section 135 r/w Companies (Corporate Social Responsibility Policy) Rules, 2014 made CSR mandatory if a company:

a. Have a net worth of Rs. 500 crore or more. OR b. Turnover of Rs. 1,000 crore or more. OR c. Net profit of Rs. 5 crores or more

The companies meeting the said criteria had to spend at least 2% of net profits on CSR activities enumerated under Schedule VII. Non-compliance CSR was then a punishable offense. Since then, the spending on CSR by the corporates has increased notably. According to a survey (Associates DS, 2020), companies spent 47% higher in 2018 than in 2014-15, contributing $1 billion (around Rs 7,400 crore) to CSR initiatives.

The listed companies of India spend around Rs. 10,000 crore in different programs. It varies from educational programs, skill development, social welfare, health sector, environment protection, etc. In 2019-20, The PM Relief Fund saw an increase of 139% in CSR contribution. The education sector received the highest funding (38%), followed by hunger, poverty, and healthcare (25%), environmental sustainability (12%), and rural development (11%). For eg: Covid-19, has been considered the global pandemic by WHO, which we are facing in recent times. This virus has disrupted the socio-economic circumstances of the world. Lockdown was announced pan India by the Indian Government in March 2020. The extended lockdown worsened the economic conditions of the people and the businesses all over. The overpopulation and the lack of awareness added to the problems which made the situation got worse from bad. The CSR policies of the companies played a pivotal role here when people were trying to get through the challenging times without having any plans or ideas. Crores have been donated to various government funds by the companies. When the government announced that any amount donated by companies in support of the fight against COVID-19 will qualify as CSR, many companies either contributed to the PM CARES Fund or for various other purposes that contributed to protecting the health and preventing hunger of the affected people. Companies can be conscious of the kind of impact they have on all aspects of society like economic, social, and environmental by practicing Corporate Social Responsibility (CSR), which is also called Corporate Citizenship. With CSR, the company is operating in a way to enhance society and the situation by contributing to its people. Through CSR programs, philanthropy, and volunteer efforts, businesses can benefit the community while boosting their brands. The company needs to have a Corporate Social Responsibility Policy. The corporate and social responsibility policy helps form a strong bond between employees and the corporates. The employees and the employers feel more connected with the world around them by contributing their part to society's betterment. The CSR policies of the Corporate industry play a pivotal role in supporting and building the knowledge, capacity, and skills of the society through different disaster management activities. They ensure that the industrial assets and the infrastructure are disaster-resistant. Sensitization programs including the safety and mitigation strategy and developing disaster resilient infrastructure among communities living in the disaster-prone area is an effective step for reducing disaster risk. With the help of the government, the corporate sector can help train the industry people, the communities, the volunteers, etc. for disaster management. Mock drills are conducted regularly for effective disaster management to look at the preparedness levels and linkages with different agencies. Some of the objectives for the conduct of the mock exercises are, to highlight the roles and responsibilities and enhance the coordination among the contributors, identify gaps in the resources, communications & systems, identify areas for public-private partnership and empower the community to face disasters. Bringing in the mechanism of the risk transfer through insurance for the poor, the middle class, and the affected people is also important during disaster management. Implementing effective disaster management in a country like India, which is the second-most populous country is a long and arduous task. However, with a proper road map and collective efforts from Government, corporates, and other contributors, it can certainly strengthen the country against natural calamities. Giving away large donation amounts to the nonprofit sector is an effective response when funds are quickly needed to help with the relief efforts. When disaster strikes and help is needed, CSR of the corporate world is looked at to act for the people of the country. Creating a disaster relief plan through CSR policies can never go wrong with your brand reputation. The support can never go unnoticed and the small act of kindness will help your company and the people working with you in the future.


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