India's social stock exchanges are set to receive a significant boost following recent amendments to the Corporate Social Responsibility (CSR) norms. The changes, effective from Friday, exempt companies from conducting impact assessments for projects funded through zero coupon zero principal instruments issued by not-for-profit organizations registered with a social stock exchange.
The amendments to the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2026, aim to address the challenges faced by social stock exchanges in attracting investors. In the fiscal year 2023-24, companies in India spent ₹34,909 crore on CSR activities, highlighting the potential for growth in this sector. A social stock exchange functions as a dedicated segment within existing bourses like BSE or NSE, facilitating social enterprises in raising funds through market-linked instruments.
According to Manpreet Singh, partner and sustainability practice leader at Grant Thornton Bharat, the primary issue for social stock exchanges has been the lack of buyers, which this amendment seeks to resolve. The new rules are expected to shift boardroom discussions from merely selecting NGOs for donations to building a well-vetted and tracked CSR portfolio.
“For years the social stock exchange has had one basic problem, which is that there were never enough buyers. This amendment goes some way to fixing that.”
Manpreet Singh, partner and sustainability practice leader at Grant Thornton Bharat
Sandeepp Jhunjhunwala, partner at Nangia Global Advisors, noted that the notification enhances transparency, accountability, and impact measurement in CSR initiatives. It also aligns social investments more strategically with Environmental, Social, and Governance (ESG) and sustainability objectives. Anshul Jain, partner-regulatory at PwC India, emphasized that the move facilitates a transparent and credible mode of funding CSR projects while enabling social enterprises to access a broader capital pool.
The introduction of social stock exchanges in India was aimed at bridging the gap between social enterprises and investors. However, the lack of sufficient investor interest has been a persistent challenge. The recent amendments are expected to invigorate the sector by providing a more structured and market-linked mechanism for CSR funding.
“The move not only enhances transparency, accountability and impact measurement in CSR initiatives, but also enables more strategic alignment of social investments with ESG and sustainability objectives.”
Sandeepp Jhunjhunwala, partner at Nangia Global Advisors
Background
The introduction of social stock exchanges in India was aimed at bridging the gap between social enterprises and investors. However, the lack of sufficient investor interest has been a persistent challenge. The recent amendments are expected to invigorate the sector by providing a more structured and market-linked mechanism for CSR funding.
Looking ahead, the success of these amendments will depend on how effectively companies embrace the new CSR norms and integrate them into their broader sustainability strategies. The development is likely to attract more companies to participate in outcome-oriented development projects, thereby expanding the reach and impact of social enterprises in India.
