New Delhi, July 29 : India Inc's annual corporate social responsibility (CSR) spending increased by 29 per cent between FY2022 and FY2024, according to a report on Tuesday.

The report by ICRA ESG Ratings showed that till March 2024, the sample set of companies collectively spent Rs 12,897 crore, with an average of Rs 129 crore on CSR initiatives.

Between FY2022 and FY2024, average net profits rose by 37 per cent while CSR spending increased by 29 per cent.

Notably, 16 out of 100 companies increased their CSR spending despite the decline in profits during the same period, reflecting a commitment to social responsibility beyond compliance.

Despite a decline in profits, 48 per cent of companies surpassed the mandated CSR budgets, underscoring their commitment beyond compliance.

'The growing alignment with UN SDGs and proactive CSR spending -- even beyond mandated budgets -- reflects a maturing approach to inclusive development. These efforts are not only enhancing stakeholder value but also contributing meaningfully to India's broader climate and social goals,' said Sheetal Sharad, Chief Ratings Officer, ICRA ESG Ratings.

Further, the report showed deepening alignment with the United Nations Sustainable Development Goals (UN SDGs), as companies increasingly move beyond regulatory compliance to proactively invest in initiatives -- particularly in quality education and good health and well-being -- that deliver long-term societal impact.

Education and healthcare remained the top CSR focus areas, with SDG 4 (Quality Education) and SDG 3 (Good Health and Well-being) showing the highest alignment across the sample set.

Maharashtra and Gujarat received the highest CSR allocations by corporates, while Odisha recorded a major growth of 85 per cent, followed by Andhra Pradesh with 70 per cent growth in CSR spending concentration, reflecting an increased corporate focus on underdeveloped regions with high development needs and potential for impact.

Sectoral leaders in CSR spending include the oil and gas refineries sector, private sector banks, the iron and steel sector, and software consulting firms.

CSR spending in aspirational districts surged by 115 per cent from FY2021 to FY2023.

While a few companies have directed up to half of their CSR budgets toward aspirational districts, the majority continue to allocate less than 5 per cent -- highlighting the need for greater strategic focus and resource allocation in aspirational districts.

While progress is evident, the report emphasises the importance of diversification in the CSR focus and exploration of innovative partnerships along with funding alternatives that can bring attention to other causes which are less supported yet remain vital.

/IANS