Key Insights on European Companies Catalysing Impact in India
As India enters its eighth decade of independent governance, it stands at a pivotal moment of transformation, with immense potential for substantial economic growth and significant strides towards achieving the nation’s Sustainable Development Goals (SDGs). In 2014, India set a precedent by becoming one of the first few countries in the world to legally mandate Corporate Social Responsibility (CSR), requiring companies above a certain financial threshold to allocate a minimum of 2% of their average net profits over the past three years to CSR initiatives.
The private sector has emerged as a catalyst in India’s development narrative, investing close to €13.5 billion since 2014 and demonstrating its commitment to creating social impact and driving positive change. This study captures 6 key trends of European companies’ social innovation efforts in India.
- European companies operating in India have spent €618 million towards social innovation over the last seven years, contributing 45% of the total CSR spend by multinational companies.
- The Fast Moving Consumer Goods (FMCG) sector has emerged as a leader in driving social innovation efforts in India, contributing 17% of the total CSR funding by European companies.
- More than 50% of social investments by European companies in India have been channelled towards Education, Healthcare and Livelihood enhancement efforts, aided largely by CSOs and corporate foundations.
- European companies need to increase their spend towards environmental sustainability in the years ahead as focus shifts to strongly integrating ESG and CSR.
- Only 2% of CSR funding is directed towards the lesser developed states in Northeast and Central India, where the needs are the highest.
- Of the 148 European companies researched in this report, a third of them have a corporate foundation in India and 61% of these were established, prior to 2014 when CSR was mandated, indicating their long standing commitment to philanthropy and social responsibility.
European companies in India are increasingly adopting ‘five levers of social innovation’ for impact. These levers signify the blurring of lines between business and social responsibility, and the accelerated thrust on innovation to address social, environmental and business challenges.