Principle 8 is about the business's impact on communities and inclusive growth. It covers Social Impact Assessments, rehabilitation and resettlement, community grievances, local and MSME sourcing, and CSR. Most of it comes from the CSR function, and the disclosure that separates a strong report from a weak one is whether you report outcomes or just rupees spent.
Key takeaways
- 01Principle 8 covers Social Impact Assessments, resettlement, community grievances, local sourcing and CSR.
- 02It is owned mostly by the CSR function, with procurement feeding the local and MSME sourcing questions.
- 03CSR spend records (Companies Act Section 135) feed the beneficiary and aspirational-district disclosures.
- 04Leading practice is to report beneficiary outcomes, not just expenditure.
What Principle 8 asks
| Disclosure | What it asks | ICAI page |
|---|---|---|
| P8-E1 | Social Impact Assessments of projects undertaken under applicable law | 146 |
| P8-E2 | Ongoing rehabilitation and resettlement (R&R) being undertaken | 146 |
| P8-E3 | Mechanisms to receive and redress community grievances | 146 |
| P8-E4 | Percentage of input material sourced from suppliers, including MSMEs | 146 |
| P8-E5 | Wages paid to people employed in smaller towns, as a share of total wage cost | 147 |
| P8-L6 | Number and category of beneficiaries of CSR projects | 149 |
The other Leadership indicators cover CSR in government-designated aspirational districts (P8-L2), preferential procurement from marginalised groups (P8-L3), and benefits from traditional-knowledge intellectual property (P8-L4).
Who owns the data
Principle 8 is a CSR engagement
Report outcomes, not just rupees
The disclosures that carry weight are about impact. P8-L6 asks for the number and category of CSR beneficiaries; P8-L2 asks about projects in aspirational districts; P8-E1 asks for Social Impact Assessments. A report that lists only CSR expenditure misses the point of the principle. Leading practice is to quantify community programmes with a Social Return on Investment or a Social Impact Assessment, so the disclosure shows what changed, not only what was spent.
Best practice for Principle 8
- Align CSR spend (Companies Act Section 135) to the SDGs and conduct Social Impact Assessments for major projects.
- Prioritise local procurement and employment, and report beneficiary outcomes, not just rupees spent.
- Quantify community programmes using Social Return on Investment or the B Impact Assessment.
- Adopt Free, Prior and Informed Consent where projects affect local communities.
See Principle 8 in a full cited report
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