In the past 2-3 decades Corporate Social Responsibility (CSR) has been a buzz word in the corporate sector, widely perceived as ways of improving one’s image through helping the community. But is CSR practised the way it should be? This is a debate that has gone on for a long time and in the process [...]

The Sunday Times Sri Lanka

‘Real’ CSR vs ‘bogus’ CSR


In the past 2-3 decades Corporate Social Responsibility (CSR) has been a buzz word in the corporate sector, widely perceived as ways of improving one’s image through helping the community.

But is CSR practised the way it should be? This is a debate that has gone on for a long time and in the process clouded the ‘real’ CSR. More and more, Sri Lankan corporates are using CSR as a means to enhance the image and show the public that they are good corporate citizens through these ‘projects’ while on the other hand resorting to devious ways in acquiring profit.

In a sense, the CSR ‘profusely and diligently’ undertaken by some companies is aimed at whitewashing ‘bad’ deeds particularly in business practices. This column has repeatedly spoken out on the merits and demerits of CSR, the good-the-bad-and-the-ugly side of it.

This troubled ‘value-for-money’ kind of CSR was also recently referred to by a visiting global expert, CSR International founder Prof. Wayne Visser when he told an audience in Colombo that businesses should not use CSR for image building exercises and winning awards.

“… you shouldn’t be reporting for public relations, but companies unfortunately do it for that,” he was quoted as saying in one newspaper.

He had said that some companies “still use CSR as a means to defend themselves for their unethical business practices, much like the Lehman Brothers which won two CSR awards, but was instrumental in the unfolding of the 2008 financial crises”. He was also critical of companies using charity as a tool for CSR whereas charity is ingrained in Sri Lankan society through ages-old philanthropy.

Philanthropy and CSR are two different things altogether. The first one seeks to help society without an return (other than sometimes to acquire merit for an individual) while the other is, and should be, in practising good governance, honest business practices and living in harmony with the environment and the community.

There are many examples to show how corporates deceive the public in pretending to do good, donate lavishly to the community and get a lot of publicity out of it. Quite a few are companies that have dubious records but through CSR projects which get more publicity that they deserve through the media, are able to impress an often, gullible public.

There are 3-4 forms of CSR that is practiced in Sri Lanka. They are (not in any order):

a) Donations to communities like school buildings, computer labs, water services, etc; b) working with the community to improve services, provide jobs and be part of the village development; c) working with the communities in building capacity and other needs but without seeking publicity or public attention as a public gimmick; and d) social responsibility projects to enhance annual reports, impress shareholders and investors.

The most effective and honest form of CSR that is widely practised abroad is in building a business on fundamentals like governance structures, transparency, working with communities in towns and villages where the company has a presence, proper waste management and water usage, and sharing of resources in developing village economies … while making profits.

The phrase ‘charity begins at home’ should be a ‘must-do’ in the corporate world. Employers, their families and other stakeholders including village communities must be part of the success of a company. A recent example reported in the Business Times showed how a garments-related factory worked with the village to erase some earlier negative issues and won their confidence. The management even went to the extent of sharing, often-considered, confidential information – like orders at hand and revenues – with the workers.

There are quite a few Sri Lankan companies whose responsibility extends to many projects initiated with communities to ensure that economic benefits and profits from factories seep down to the village, and in the process remain silent about these noble efforts. These in fact deserve publicity and are a lesson to others on how ‘real’ CSR works; not a couple of digits on a balance sheet or perceived as a rate of return in cash-flow terms.

On the other hand there are companies which seek publicity far more than merited for even small donations. Such devious initiatives are made worse when press releases diligently carry the full names and accurate designations of company officials handing over or involved in the process while the recipients, often a principal or teacher of a school, or a village leader is addressed without proper initials or designations. There is a lackadaisical approach by companies in the importance given to the recipients when seeking publicity. This is happening more frequently today when the media receives these ‘doing good’ press releases.

While caring for one’s employees’ is a sacred part of social responsibility, there are examples of how some companies arrogantly and virtually cheat their way through to win awards on the pretext of caring for their workers. The Business Times reported one such instance a couple of years ago where the Sri Lanka unit of a global company sought a lot of publicity after winning a regional award for the ‘best human resource practices in Asia’. Hidden in its application was the fact that the institution was going downhill, virtually bankrupt and where employees had been told to find other jobs.

Eventually the unit was bought over by another giant in the same field. How on earth can you win an award for best HR practices when the company is near closure with workers losing their jobs? In a more advanced society, such an institution would have been hauled for cheating and penalised with the organisers of the event also taken to task. In Sri Lanka, companies get away with any misdeed given their influence over society, the media and mainstream political parties.

Despite the talk of good governance and accountability, the powerful commerce and trade chambers are fighting shy of cracking the whip on such errant organisations which mislead the public. Often this is because they themselves are guilty of wrongdoing in this arena or believe that such practices are part of the corporate culture.

It is hoped that the new CSR body, CSR Lanka (Guarantee) Ltd under the aegis of the Ceylon Chamber of Commerce will show the way in ‘real’ CSR and crack the whip even if a few of its own members are guilty of deceit.

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