--BY PURNA ADHIKARI
Corporate Social Responsibility (CSR) is an agenda as old as enterprise itself. But globalization now appears to be encouraging a market driven cycle of CSR pressures that stimulate voluntary, environmental and ethical improvements at the firm’s level. This concept suggests that commercial corporations have a duty to care all their stakeholders in all aspects of their business operations. A company’s stakeholders are all those who are influenced by, or can influence, a company's decisions and actions, like employees, customers, suppliers, community organizations, subsidiaries and affiliates, joint venture partners, local neighbourhoods, investors and shareholders.
From the South Asian perspective, if we look at the dimensions of CSR, following areas of responsibility can be highlighted that are similar to the developed countries.
• Economic responsibilities required bysociety.
• Legal responsibilities, likewise, required by society.
• Ethical responsibilities expected by society.
• Philanthropic responsibilities desired by society.
• Being a good corporate citizen to contribute to the society.
One important event in South Asia CSR was held in 1965 when the then Prime Minister of India presided over a national meeting that issued the following declaration on the social responsibilities of business houses: “...[A business house has]responsibility to itself, to its customers, workers, shareholders and the community. Every enterprise, no matter 45how large or small, if it is to enjoy confidence and respect, must seek to discharge its responsibilities in all directions and not to one or two groups, such as shareholders or workers, at the expense of community and consumer. Business must be just and humane, efficient and dynamic.”
However, it should be noted that in South Asia, especially in Nepal and India, CSR is not a new phenomenon as it has been practiced for long.
On the economic and social perspective, companies feel that they are obliged to contribute something irrespective of whether the society is aware of it or not. Various research works carried across various companies have yielded interesting comments on CSR. For example, one company responded: “[The Company’s] social responsibilities include generation of employment opportunities, contribution to Gross National Product(GNP) and national wealth, control of pollution, providing a safe working environment etc. We strive to achieve these goals. There is of course room for improvement, which is possible through continuous awareness programs.”
Some other respondents referred to the contribution of their companies to GNP and national wealth as a part of their corporate social responsibility. For example, they said: “The primary social responsibility of a company should be to produce prosperity through creating value, which should, in turn, support social improvement.”
On environmental perspective, a respondent corporate social citizenship and said: “What I understand is that as citizens of a country, we have certain obligation towards our society, the environment we are living in and what we are leaving behind for the next generation. Our company is committed to ensure a clean and healthy environment.”
Some senior-level respondents of the companies, especially working on social environmental sector, said: “The company, being a part of the society, has a responsibility towards society and environment. Capital expenditure has been made to ensure that all effluents and emissions are pollution free. Foliage and gardens occupy one third of factory area contributing to a green environment.”
Another response was like this: “Industrial houses plant trees and maintain parks thereby providing space for greenery. But they should also make proper arrangements for the disposal of their industrial waste. The black smoke belched out by the factories pollutes the environment and we are not aware how this problem can be solved. In our unit, we provide well-ventilated working place for our employees and ensure that rubbish is disposed without polluting the surrounding. The vehicles engaged for transportation of our products are regularly sent for Auto Emission Test and have the ‘pollution under control’ certificates.”
Another respondent mentioned the management tools related to corporate environmental responsibility: “[We]promote the use of management tools such as environmental assessment, life cycle analysis and total cost accounting to help organization to identify and select opportunities for improvement [and we] encourage transparency through corporate social and environmental reporting.”
On the legal responsibility perspective, there are a couple of legal provisions that must be complied by corporate business management. Some of them are related to health and safety of employees, the others are related to environmental protection and maintaining minimum standard at workplaces. For the effective implementation of CSR, guidelines have been enshrined from social, national and international best practices and awareness programs. On this perspective, some respondents mentioned: “In view of the painstaking, strenuous and sustained efforts undertaken by all of us, our units have become the recipient of ISO:14000 certificates.”
Other companies mentioned other regulatory norms. One said: “As a corporate citizen, [Our Company] is committed to ensure that our products produce minimum impact on the environment. Strict pollution control measures and monitoring systems are already in place as per international standard. Our organization is working towards greater awareness and implementation of EMS at our generating stations and other related areas.”
From the ethical point of view, CSR expectations depend on norms of social values and practices. Religious and social philosophical influences, beliefs and practices in society are also the key factors in CSR. On this context, one company stated that “[Our Company]is trying to fulfil social responsibilities which will help the weaker community of the society. In fact, it is like acting as a leader in the HRD management. We feel that in South Asia, particularly in India, the need for training has not reached the grass-root level. We have to do a lot on this issue." Another company, explaining how they were fulfilling their corporate social responsibility, said: “Our Company is engaged in various programs on regular basis. For the upliftment of the socially backward and poor communities of the society, we conduct trainings to develop skills required in our business and those showing good aptitude are absorbed by our company.”
Every society has certain desires on philanthropic as well as fulfilling corporate responsibilities which is done through the social programs of business houses and corporate business institutions on voluntary basis. According to one respondent, a company should ensure that “ordinary life is given decent place and environment.” Another company suggested that it has the responsibility to “observe what others do not see at first, be that in terms of producing goods or services or their distribution to improve the well-being of others.” Several respondents, however, made more specific references to ways in which they contributed to social development through educational, health and social campaigns. “The social responsibility of any organization centres on consistent support to sectors like health, education, infrastructure development and self-employment generation. We have been providing necessary support by installing ICCU in a nearby hospital, eye camps, family planning programs etc. Apart from maintaining a secondary school, support is being extended to various educational development programs in various districts. Definitely there is a need for greater awareness on these issues in industries.” Furthermore, in the same perspective another respondent said: “,.. Create charitable trusts with the objectives to uplift the standard of living of the downtrodden and support and teach them to sustain their livelihood independently.” Another company responded: “...The social responsibility of spreading awareness among the public regarding social reforms and practices is considerable to our company.”
The above statements show that the CSR is seriously adopted by various corporations and business institutions. Some institutions do not want to contribute to the society. For example, some respondents said: “Despite competition and increasing operating costs, our products undergo strict quality control measures. Nevertheless, our prices are competitive and we are paying all levies are per the law.” But such views have been changing under growing awareness level, enhanced domestic and international standards, domestic regulation, public opinion and community group pressure to save reputation of the company. Businesses will not benefit economically by investing in improving social and environmental issues because consumers as a mass are swayed by advertising. Perhaps more education is needed to increase the awareness of CSR for both businesses and consumers before there will be an incentive for businesses to get on board. The vague, impractical and poorly-monitored regulations, poor infrastructure, complex tax system and heightened bureaucracy are some obstacles. Ethical and moral values have not been given equal priority in every business house. Corruption and distorted values are some negative factors. One respondent said, “Penalties for non-compliance should be strictly implemented. This is to be done by flattening tax structure and reducing exclusive authority on government agencies.”
For increasing corporate social responsibility, corporate culture should replace the family business culture. Management should be positive and growth oriented. It is only possible if professionals start to handle businesses. Ethical business values are not on high priority due to the absence of corporate culture. This is an obvious obstacle to the CSR agenda. To overcome this problem, one respondent suggested, “Developing a culture for imbibing ethical values into our system, we can make a difference.” Overcoming these obstacles involves fundamental changes in business culture along with major changes in the educational system to build a strong ground for corporate social responsibility in this region.
(Adhikari holds an MBA degree from Maastricht University, The Netherlands and currently, he is doing research on stock market issues in Nepal. This article draws from various research works on CSR carried out in different countries by different research organisations.)