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CSR has increased in popularity but few businesses understand its real meaning.
By Bamrung Amnatcharoenrit
Unilever staff offer a cheer at a rally held recently to support the consumer products giant's Moo Rider campaign, a programme to distribute 1,000 bicycles to children in rural communities this year. |
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One of the concepts that have caught on like wildfire throughout business world in recent years is corporate social responsibility (CSR). With its emergence, businesses are seen, and judged, in a different light.
Gone are the days when companies existed only to maximise profits at minimum costs. Apart from itself, its customers and shareholders, a good corporate citizen must think of its stakeholders, the society of which it is a part, the country in which it operates, and, ultimately, the world at large.
Taking social responsibility seriously does not come cheap in terms of both funds and efforts. Yet the payback is believed to more than justify the costs. A good corporate citizen can expect to be in for the long haul. Its brand will be more well-known, which makes it easier to add value to it in the long run.
Most academics agree. Nadhakan Shinnaranantana, a lecturer with the Marketing Department of the Faculty of Business Administration, Kasetsart University, says that companies will find it very difficult to survive in the highly competitive market if they ignore CSR. She cites consumer research conducted by Kenan Institute in 2005, which shows consumers have expressed more concern over CSR than manufacturers.
Recent research by Vero Public Relations in Bangkok also found that 90% of Bangkok consumers are willing to pay more for a product made by a company with CSR in mind.
The reports send a clear message to operators, who can no longer run businesses by conventional principles. Conducting a business today is increasingly complicated. A company has to respond to the whims of society and consumers, who now want to see it do CSR.
But where CSR is concerned, there is no fixed rules as to what a company has to do and as a result scepticism prevails. In Thailand, it remains doubtful how many companies really understand the concept of CSR. Some argue that it is quite hard to distinguish CSR from any other marketing ploy.
Ms Nadhakan says many local companies that have undertaken the initiative are still confused about the concept themselves. CSR activities are being exploited as a public-relations tool, with no sincerity and long-term commitment to the society.
"CSR is not about planting trees and then posing for pictures. In fact, more needs to be done. CSR needs a long-term commitment to create a sustainable community," she says.
HSBC has long been active in helping underprivileged children. In a programme this year, for every forwarded e-mail, the bank is donating one baht to the CCF Foundation to help children in Sa Kaeo. |
Some research studies find the most common CSR activity among Thai firms is handing out donations or scholarships, the easiest and quickest route to be recognised as a socially responsible company.
She cites some brewers as an example. As producers of alcoholic drinks, these companies should take more social responsibility than the manufacturers of other products because their products potentially endanger people's health and cause accidents, all of which cost billions of baht in state funds.
"They hand out blankets when the winter comes. Does it make sense to call this CSR?" she asks.
In reality, good CSR activities have to be incorporated into business plans, which dictate what kind of activities are appropriate. While there are no holds barred when it comes to CSR, the most common activities usually involve the environment and education.
The Vero research also found that 26% of Bangkok residents considered giving grants to young people as a good CSR activity, followed by 18% who favoured environmental projects.
The size of a company doesn't matter. Small and medium-sized companies (SMEs) can help society by using raw materials sourced from their communities, or reducing the use of plastic bags, for example. The little things they do that help community development can also be counted as CSR.
"Nowadays, companies misunderstand that CSR needs a big budget. This is absolutely not true. Every firm can do CSR by starting small by keeping a good working environment, not taking advantage of employees or respecting human rights and labour laws," she says.
Among the companies that lead in terms of CSR today is The Hongkong and Shanghai Banking Corporation Ltd (HSBC). The British bank integrated CSR as part of its strategic plan, with a budget allocation of at least 2.5 million baht annually. Even in financial services, Thailand's first commercial bank believes it has to do its part to help society. The reason is simple: if society is weak, so are businesses.
Asdaporn Vanabriksha, HSCB's chief operating officer, says the company uses the term "corporate sustainability" (CS) instead of CSR. Under CS management, 12 representatives from each department discuss the CS direction and revise the existing plan to maximise the benefits for society.
In addition, the bank encourages its more than 1,000 employees to take part in social projects ranging from teaching computer skills to the underprivileged to planting trees. It also encourages each department to try to mix CS with leisure when they take annual trips. Projects that are viable and beneficial to the public will then be sponsored by the bank.
Internally, HSBC keeps seeking new ways to save energy, create a working culture suitable for the changing society and use recycled papers, even when it means higher operating costs.
Its CS projects are focused on the environment and education. For example, its "FutureFirst" project gives the underprivileged and orphans wider access to education.
In terms of business, HSBC laid down a global rule of not lending to businesses that do not act responsibly toward the environment, even if it means losing some clients to its rivals.
"An outcome of having CS is that our employees feel proud to work with us. Also, it helps increase job loyalty among them at a time of intense competition in the sector," Mr Asdaporn says.
Thai Pure Drinks Plc, the local bottler of Coca Cola soft drinks, has also been committed to CSR since it was founded in 1949. Its campaigns range from music and sports to the environment, mostly targeting young people.
Since its production uses a lot of water, bottles and cans, Thai Pure Drinks is aware of the impact its operation has on the environment. It has set up a dedicated CSR department with a budget of about 100 million baht for campaigns to be focused on four areas: working environment, marketing activities, environment, and communities.
Recently, the company introduced the "Raknam" campaign. Pornwut Sarasin, vice-chairman of the Coca-Cola Foundation Thailand, says the campaign costs more than 100 million baht over the next few years as a new effort to support sustainable communities. The project will be useful for 2.5 million people during the period.
He says the having CSR helps underscore that the business is part of Thai society. In part, it also helps build brand image in the long term.
Today, more CSR campaigns are increasingly promoted via TV and other media outlets. But Ms Nadhakan shrugs when somebody criticises them as marketing gimmicks or PR stunts.
"In the business sector, if [companies have] something good, they should tell the public. It is out of date to keep themselves in the closet. But the important thing we have to be concerned about is the sincerity and commitment of the projects," she says.
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