A CSR thematic area is the most important constituent of a company’s CSR strategy. It defines the theme and series of activities in which the organization will do CSR spending, run programs & create the desired social impact and related upliftment. As per the Companies Act 2013, a thematic area qualifies for CSR spending if it is listed as part of activities under the Schedule VII of section 135 of the Companies Act.
Activities Permitted Under CSR
Activities which may be included by companies in their Corporate Social Responsibility Policies Activities relating to:
· Eradicating hunger, poverty and malnutrition
· Promoting health care including preventive health care and sanitation and making available safe drinking water.
· Promoting education, including special education and employment enhancing vocational skills
· Promoting gender equality & empowering women
· Ensuring environmental sustainability
· Protection of national heritage, art and culture
· Measures for the benefit of armed forces veterans, war widows and their dependents
· Training to promote rural sports, nationally recognized sports, paralympic sports and Olympic sports
· Contribution to the prime minister’s national relief fund or equivalent set by the state or center
· Contribution to incubators or research and development projects in the field of science, technology, engineering and medicine
· Contributions to public-funded Universities;
· Rural development projects & slum area development.
· Disaster management, including relief, rehabilitation and reconstruction activities.
Thematic Area Selection
As a best practice, a thematic area chosen by the company should be governed by the CSR vision of the company and the associated impact it wants to create. An example: Tech Mahindra CSR Focus area is ‘Promotion of Education’ which is driven by its CSR vision of “Empowerment through Education.”
(Source: Tech Mahindra CSR Policy)
Popular Thematic Areas for Indian Corporates
Thematic Areas & Cumulative CSR Spent Trend for Last 3 Years (in INR Cr.)
Conclusion
Based on our experience as a CSR consulting services firm, we recommend carefully choosing a thematic area. Selection should also include considerations such as NGO selection, execution method, impact assessment, and the impact on the brand. In building the overall CSR strategy framework, it would be useful to engage with a CSR advisory services firm at a strategy level that can advise on the thematic areas.