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CS Professional · CSR and Social Governance · Social Impact Assessment and CSR Audit

Veda Textiles Ltd, a company with an average net profit large enough to attract CSR, wants to know why it should carry out a social impact assessment of its proposed village water project before spending the money. Which is the best description of the core purpose of such an assessment?

Social impact assessment is a systematic evaluation of the social consequences of a project on affected communities, both intended and unintended, so that design and decisions can be improved. It is not a method to compute the spending obligation or a route to regulatory approval.

  1. ATo systematically evaluate the social effects of the project on the community, intended and unintended, so that decisions and design can be improvedCorrect
  2. BTo compute the two per cent spending obligation of the company for the year
  3. CTo obtain the Registrar's approval for the project
  4. DTo convert the project into a Schedule VII activity automatically

Explanation

Social impact assessment is about analysing and managing the social consequences of an intervention on the people affected, helping design and decisions. It does not compute the spending obligation, which section 135(5) fixes at two per cent of average net profit of the three preceding years, and it does not give regulatory approval or change the nature of an activity.

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