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The government of India made it mandatory for companies to disclose their CSR activities and has released a set of guidelines for all companies – including MNCs – for disclosing the same. Observing these guidelines is however voluntary, it is reported. A bit confusing, I must say. Why make these guidelines voluntary? So what sort of guidelines are compulsory? Or if there are no compulsory guidelines, reporting what indeed is compulsory? I am sure there are some answers to these, but these are not very clear from the news reports.

Coming back to reports, there are nine broad principles in the National Voluntary Guidelines on Social, Environmental and Economic responsibilities. These include, well being of employees, human rights, environment consideration, equitable development, safe and sustainable transport of goods etc.

Specifically related to environment and energy are the following suggested reportings: disclosures on recyclable raw materials used, energy efficient technologies being applied, and total water consumed.

I am not certain if making the reporting of CSR is a good idea. If CSR is considered to be an extended part of business, then it is indeed a good idea. But if CSR is something a company does out of a sense of moral /ethical consideration and not just business or financial consideration, why make it mandatory? Put another way, what is the penalty if a company does not undertake any CSR activity? If there is none, why make it mandatory to announce what they are doing?

What are your thoughts?