Utilization of CSR Funds for Renewable Energy in India
Renewable energy sources are those sources which are naturally replenished, such as wind, solar, tidal, and geothermal heat. Ministry of New and Renewable Energy (MNRE) takes care of this sector in India. Major sources for such clean energy along with their installed capacity (as on 31 March 2017) and target for the year 2022 are listed below in the given table.
|Source||Total Installed Capacity (MW)||2022 target (MW)|
Innovative Financial Advisors Pvt. Ltd. reviews that in our country, the focus is shifting on utilizing the available renewable energy resources from using the coal, petrol, diesel, etc. which are not only costly but are on the verge of getting depleted.
A study conducted by Michael Aklin, a political science professor at the University of Pittsburgh, shows that more than a thousand homes in rural India, that had received basic access to clean power for the first time, found that expense on the costly kerosene for the purpose of lighting had fallen, which is a benefit to such rural families. But access to a couple hours a day of electricity was not enough to boost savings, help launch new businesses, increase time spent working or studying, or otherwise significantly improve people’s lives. In Aklin’s words, “What appears to be needed instead are larger clean power systems capable of providing enough energy to run businesses throughout the day. Larger off-grid systems that offer more power, could be used for appliances and machinery, with more potential for livelihood creation.”
Innovative Financial Advisors Pvt. Ltd. reviews the significance of utilization of such energy sources and found that it is maximum for the rural part of our country because of the basic reason that there is lack of infrastructure to take the on-grid electricity to such remote places. Off-grid energy is the best solution for such places.
Government is doing its bit in improving the situation in this regard. But a very big responsibility lies with the large companies who can fulfill their Corporate Social Responsibility by utilizing their funds in this area. As per the Section 135 of the Companies Act, 2013, it is mandatory for the large firms to invest a specific amount of money for such activities.
Although many companies are using their funds for various ‘corporate social responsibility’ activities, a report says that out of their overall CSR budget, they spend just 6% on clean energy in India.
The report tells that all the leading business players in their social efforts are putting maximum efforts on education, skill development, and livelihood creation but they are putting the least focus on improving the energy problems of rural areas which is a big question mark.
39 out of the 100 companies (BSE 500 list) in our country, with the maximum spending on the CSR, are involved in the clean energy area with the maximum investment in solar street lights & lamps, mini-grid/solar plants and smokeless stoves for the rural communities.
Innovative Financial Advisors Pvt. Ltd. reviews that the firms which are in power, oil, and gas sectors were more inclined on focusing on the non-depletable source of energy projects for their social development spending because of the reason that they are competent in this area and can use their knowledge for the better implementation of the activities in CSR. Also, the manufacturing and heavy engineering industry were also proactive in putting their efforts in this area.
Although the clean energy sector is under the focus for many such businesses, the participation by other business entities still remains very low. A lot of restructuring of the social development programs is required to create a strong impact on the betterment of the society.
The most readily available source of energy i.e. solar energy needs to be made available for all the rural areas which are deprived of the electricity till now. The highest requirement being in Bihar and Meghalaya as per the government data.
Innovative Financial Advisors Pvt. Ltd. reviews the possibilities available for improving the current situation of societal fund utilization in the sustainable power sector and finds that a lot of initiatives can be taken like engaging various NGOs with the grassroots level of the society for providing solutions like off-grid solar plants, solar thermal plants, small wind energy plant, etc.
CSR consultancies like Fiinovation are proactively doing a lot in this area by arranging meetings of big firms and bringing them together so that their specific pool of money can be utilized together as the large amount for providing the large-scale energy solutions to the society.
This way, we can ensure that a neglected sector of clean energy could get the attention it deserves and a positive change in the society could be brought with a holistic approach taken together by companies, NGOs, consultancies, and government