CER vs CSR: two different obligations, two different laws, and money that cannot be counted twice.

The source of the obligation. CSR arises from company law and attaches to a company because of its size and profitability. CER arises from environmental law and attaches to a project because its Environment Clearance imposes it. One is regulated by the Ministry of Corporate Affairs, the other by the environment authority that granted the clearance.

Generally no. The Companies (CSR Policy) Rules exclude from CSR any activity undertaken in pursuance of a statutory obligation under any other law in force in India, and CER spend made to satisfy a clearance condition falls squarely within that exclusion. A company that funds its CER commitment out of its CSR budget risks a shortfall against its section 135 obligation.

A company that, in the immediately preceding financial year, has net worth, turnover or net profit above the thresholds specified in section 135 of the Companies Act 2013. Where it applies, the company must spend at least two per cent of the average net profits of the three immediately preceding financial years, constitute a CSR committee where required, and adopt a board-approved policy.

Any project whose Environment Clearance carries a CER condition, irrespective of the size or profitability of the company behind it. A project company that has made no profit at all and falls entirely outside section 135 can still carry a substantial CER obligation, because CER is tied to the project and its impacts, not to the company's accounts.

CSR must be spent on activities within Schedule VII of the Companies Act, with a stated preference for the local area of operations but no strict geographical bar. CER is directed at the area affected by the project, the villages and habitations that carry its impacts, as specified in the clearance condition. CER is therefore geographically tight in a way CSR is not.

CSR is reported in the annual report through the prescribed CSR annexure to the board report, in the filing made to the Ministry of Corporate Affairs, and on the company website; unspent amounts must be dealt with under the statutory mechanism for ongoing and non-ongoing projects. CER is reported in the half-yearly compliance report against the Environment Clearance, with expenditure and delivery evidence. Two regulators, two formats, two sets of records.

For companies above a specified average CSR obligation, the CSR Rules require impact assessment through an independent agency for projects above a specified outlay that have been completed for a defined minimum period. There is no equivalent general statutory requirement for CER, though appraisal committees and regional offices increasingly expect verification of delivery rather than expenditure statements alone.

Plan them as two programmes with separate budgets, separate approval routes and separate evidence files, and screen every proposed activity against the regime it is being funded from before commitment rather than after. Where a genuine local need could be met under either, decide deliberately which obligation it discharges and record that decision. The risk is not in doing good work but in claiming one rupee twice.