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CSR and Social Governance · Impact of CSR

Impact Reporting and Disclosure under CSR Rules

Updated 11 October 2026 · Fact-checked

Impact reporting and disclosure means telling the public and regulators what your CSR spending achieved. A company reports through the Board's report (annual report on CSR), the CSR-2 filing with the MCA, website disclosure of CSR details, and sustainability frameworks such as BRSR and GRI. Answer by naming the channel, content and who approves it.

Understand Impact Reporting and Disclosure

CSR does not end when the money is spent. The company must show what was spent, on what, and what changed for the people it was meant to help. This is impact reporting and disclosure.

The law works through several channels. First, the Board's report carries a short annual report on CSR activities in the format prescribed in the CSR Rules. Second, the annual action plan approved by the Board on the CSR Committee's recommendation sets out projects, modes of execution, fund utilisation and monitoring. Third, the company files Form CSR-2 with the Registrar as an addendum to its financial statements filing, giving project-wise and amount details. Fourth, the company puts its CSR Committee composition, CSR policy and approved projects on its website, if it has one.

Impact assessment feeds into this. A company with an average CSR obligation of ₹10 crore or more in the three immediately preceding financial years, and carrying a project with outlay of ₹1 crore or more that has been completed at least one year earlier, must undertake an independent impact assessment. The report is placed before the Board and annexed to the annual report on CSR. The assessment cost may be counted toward CSR expenditure, up to the lesser of 5% of the total CSR expenditure for the year or ₹50 lakh.

Beyond the Companies Act, listed companies use wider sustainability frameworks. The BRSR (Business Responsibility and Sustainability Report) is SEBI's mandated format for the top listed entities and has CSR-related disclosures, including social impact assessments. GRI is a voluntary global standard that helps companies report social, environmental and economic impacts in a comparable way.

In short: the Companies Act channels give compliance reporting, while BRSR and GRI give broader stakeholder-facing sustainability reporting.

Key rules to remember

Impact assessment trigger
Average CSR obligation ≥ ₹10 crore in the 3 preceding years AND project outlay ≥ ₹1 crore AND completed ≥ 1 year ago
All three conditions must be met. Report goes to the Board and is annexed to the annual report on CSR.
Impact assessment cost limit
Counted toward CSR = lesser of 5% of total CSR expenditure for the year or ₹50 lakh
Applies to the cost of the impact assessment, not to the project spend.
Disclosure channels
Board's report + annual action plan + CSR-2 + website + BRSR/GRI
Know what each carries and who is covered. BRSR applies to listed entities as SEBI specifies; GRI is voluntary.
Website disclosure
CSR Committee composition + CSR policy + approved projects
Required where the company has a website, so the public can access them.

How to solve Impact Reporting and Disclosure questions

Use this method for any question on CSR reporting and disclosure, whether it is theory or a case.

  1. 1Identify the reporting channel the question asks about: Board's report, action plan, CSR-2, website, BRSR or GRI.
  2. 2State the legal source in plain words: Section 135 and the CSR Rules for the first four, SEBI's listing framework for BRSR, and voluntary standard for GRI.
  3. 3List what must be disclosed: CSR policy, committee composition, projects, amounts spent, unspent amount and reasons, implementing agencies and impact findings.
  4. 4Check the facts for thresholds, such as the ₹10 crore average obligation and ₹1 crore project outlay for impact assessment.
  5. 5Identify who acts: CSR Committee recommends, Board approves and signs the report, and the company files the form.
  6. 6Apply the rule to the facts and state a clear conclusion.
  7. 7Add practical points: keep supporting records, use the prescribed format and file within the due dates.

Quickest way: Channel-Content-Person check

When to use it: Use when time is short and the question asks you to list or explain disclosures.

  1. Write the channel in one line.
  2. Write three to five key contents under it.
  3. Name the person or body responsible: Committee, Board or company.
  4. Close with one practical compliance point, such as website upload or annexing the impact report.

Common mistakes in Impact Reporting and Disclosure

  • Treating CSR-2 as a standalone return with a separate due date from the financial statements.

    Students remember the form number but not how it is filed.

    Fix: Remember that CSR-2 is filed as an addendum to the financial statements filing, not as a separate return.

  • Applying impact assessment to every company.

    Students ignore the thresholds.

    Fix: State all three conditions: ₹10 crore average obligation, ₹1 crore project outlay and one year since completion.

  • Confusing BRSR with the annual report on CSR.

    Both contain CSR information, so they look similar.

    Fix: The annual report on CSR is a Companies Act requirement in the Board's report. BRSR is a SEBI requirement for listed entities.

  • Saying GRI is mandatory.

    Students assume global standards are legally binding.

    Fix: Say GRI is a voluntary framework unless a law or regulation requires it.

  • Forgetting the cost limit on impact assessment.

    Students only remember that the cost can be counted toward CSR.

    Fix: Quote the cap: lesser of 5% of the year's total CSR expenditure or ₹50 lakh.

Worked examples

Example 1

Meridian Textiles Ltd had an average CSR obligation of ₹12 crore over the last three financial years. It completed a ₹1.5 crore rural skilling project two years ago. Must it conduct an impact assessment? How should it report the result?

Show the solution
  1. Check the first condition: average obligation of ₹12 crore is at least ₹10 crore. Met.
  2. Check the second condition: project outlay of ₹1.5 crore is at least ₹1 crore. Met.
  3. Check the third condition: the project was completed two years ago, which is at least one year. Met.
  4. All three conditions are met, so an independent impact assessment is required.
  5. The report must be placed before the Board and annexed to the annual report on CSR in the Board's report.

Answer: Yes. Meridian must carry out an independent impact assessment and annex the report to the annual report on CSR after placing it before the Board.

Example 2

Explain the disclosure requirements a company must follow for its CSR activities, other than sustainability frameworks.

Show the solution
  1. Board's report: include the annual report on CSR in the prescribed format, covering policy, committee composition, projects and expenditure.
  2. Annual action plan: the Board approves it on the CSR Committee's recommendation. It covers projects, modes of execution, fund utilisation and monitoring.
  3. CSR-2: file with the Registrar as an addendum to the financial statements filing, with project-wise details.
  4. Website: where the company has one, display the CSR Committee composition, CSR policy and approved projects.
  5. Impact assessment: where thresholds are met, annex the independent report to the annual report on CSR.

Answer: A company discloses CSR through the Board's report, the annual action plan, Form CSR-2, the website and, where applicable, an annexed impact assessment report.

Exam tips

  • Use headings by channel. Examiners reward structured answers.
  • Always quote thresholds with all conditions, not just the amount.
  • Separate Companies Act requirements from BRSR and GRI in your answer.
  • In case questions, state the provision, apply the facts, then conclude.
  • Mention practical records: utilisation certificates, agency reports and proof of website upload.

Practice questions from Impact of CSR

Impact Reporting and Disclosure in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Impact Reporting and Disclosure: frequently asked questions

What is CSR-2 and who files it?

CSR-2 is the form a company files with the Registrar giving details of its CSR spending. It is filed as an addendum to the financial statements filing. Companies covered by Section 135 must file it.

Is BRSR mandatory for all companies?

No. BRSR is a SEBI requirement for listed entities as SEBI specifies. Unlisted companies are not covered by it unless a regulation says so.

Is GRI reporting compulsory in India?

GRI is a voluntary global standard. A company may use it to report impacts consistently, but the Companies Act does not require it.

Must a company publish CSR details on its website?

Yes, where the company has a website. It must display the CSR Committee composition, CSR policy and projects approved by the Board.