A Puff for Progress: The Ironic Truth Behind ITC’s CSR Initiatives

India’s Corporate Social Responsibility (CSR) mandate requires 2% of net profits to be allocated towards social initiatives. 

ITC had spent INR 404.05 Crore as part of its CSR obligation, ranking them among India's top 10 largest CSR spenders.

In an era where (CSR) is a fundamental aspect of business ethics, few ironies are as striking as ITC’s CSR initiatives.

CSR Initiatives in FY 2023-24: Impact and Reach

In FY 2023-24, ITC’s CSR projects impacted 26 States/Union Territories, covering over 300 districts. 

Here's a snapshot of the transformative initiatives funded by ITC’s CSR contributions:

• Water Stewardship: Over 4,100 water-harvesting structures were built, enabling 5.5 million kilo liters of rainwater harvesting.
  
• Biodiversity Conservation: The biodiversity initiative covered over 1.8 lakh acres, taking the cumulative area to over 4.7 lakh acres.
• Livestock Development: Conducted 1.2 lakh artificial inseminations, leading to 0.45 lakh high-yielding progeny, and enhanced farmers’ monthly incomes from INR 6,000 to INR 13,000.
• Social Forestry: Greened over 33,900 acres, promoting ecological balance.
• Women Empowerment: Created livelihood opportunities for 71,000 women, contributing to financial independence and societal progress.
• Education: Reached over 4.1 lakh children across 15 states, with 125 Supplementary Learning Centres mainstreaming 2,500+ out-of-school children.
• Skill Development: Trained 12,500 youth, with 49% female participation, enhancing employability.
• Sanitation: Built 62 community toilets and facilitated 4,200 Individual Household Toilets, improving hygiene and health.

Who funded these CSR initiatives?

Details of financials of ITC Limited for the FY 2023-24

If we assume that each segment's profit contribution proportionally funds the CSR obligation, then:

• Total CSR obligation = INR 403 Crore
• Cigarettes contribution towards CSR = 78.7% of INR 403 Crore

Hence, if we were to attribute CSR spending proportionally based on profit contribution, cigarette sales effectively funded around ₹317 crore of ITC’s CSR activities (INR 403 Crore * 78.7%)

So, by this logic, a significant portion of ITC’s CSR spending is effectively supported by profits from cigarettes. 

However, ITC does not directly allocate CSR spending based on segment-wise profits—it is based on the company's total net profits.

When Smoking Supports Social Good

ITC’s CSR efforts span across education, rural development, sanitation, and environmental sustainability. 

Ironically, a smoker purchasing a pack of cigarettes indirectly contributes to initiatives such as:

• Rural development programs improving livelihoods in underserved areas.
• Educational programs ensuring literacy for underprivileged children.
• Sanitation and hygiene projects, a stark contrast to the health implications of smoking itself. 

The Way Forward

As consumer preferences shift and regulatory pressures increase, ITC has been aggressively expanding its non-cigarette FMCG segment, reducing its dependence on tobacco. 

However, until this transition fully materializes, the paradox remains—a smoker’s indulgence today is, in part, financing a child’s education, a farmer’s livelihood, or a village’s clean water project.

Conclusion

The irony of cigarette profits funding social good is making clear that every puff taken is not just a personal choice but a contribution to a larger societal impact, for better or worse.

Disclaimer

This blog is not intended to promote or endorse smoking in any form. The purpose of this article is to highlight the irony and complexity of corporate social responsibility in the context of ITC’s business model. 

We encourage readers to support welfare programs and contribute to social good through healthy and responsible choices.

Sources:

ITC Annual Report for the FY 2023-24