Corporate Social Responsibility (CSR) is steadily taking roots in Pakistan where commercial enterprises spent Rs5.9 billion for corporate philanthropy in 2014, way up from Rs228 million in 2008.
Health, education, social development, environment and disaster relief were the top priority areas where funds went. But, most of the organisations in this country are still operating with a mentality that was prevalent in the 1960s among US entrepreneurs who argued that they could either control pollution or maximize profits and expand. Now, this orthodox view has changed around the world.
In neighbouring India and China, the management of many industrial ventures has found that long-term survival was linked to their level of corporate social responsibility. Even the value-added textile exporters of Bangladesh now make substantial provisions for discounted food for their workers to ensure that workforce and their families get proper nutrition. Creditable studies have proved that productivity is linked to quality of nutrition. But, in Pakistan quality nutrition is not available to ordinary workers due to high inflation. It is, therefore, in the interest of entrepreneurs to look after this basic need of their workers.
However, across the globe, we find that these days both public and private organisations undertake many activities for the welfare of their workers and the surrounding community with the objective to further the goals for which they primarily exist. Aside their main area of work, all activities that entities undertake for the welfare of the society come under the CSR purview. For a business entity, CSR is commitment to behave ethically and contribute to economic development while improving the quality of life of the community in which it happens to be operating and the society at large.
However, this does not imply that CSR ensures viability or continued success of CSR-compliant companies. But, it is one factor that enables a company to absorb pressure because the human resources in CSR-compliant companies are more loyal, responsible and efficient than their counterparts in non-compliant organisations. In CSR-compliant ventures, workforce feels a sense of ownership in the company and often it goes beyond a call of duty to ensure the success of their organisation.
Now, ILO promotes CSR as a means of creating industrial peace and enhancing industrial and economic growth. Another global body — International Standards Organization (ISO) — offers guidance on socially responsible behaviour and possible actions. As a guidance document, its ISO 26,000 (issued in November 2010) encourages organisations to discuss their social issues and possible actions with relevant stakeholders. There are a lot of studies which have shown that there is a positive relationship between CSR and financial performance of an organisation.
Cognizant of this fact, now not only governments but commercial organisations also play an important role in the development of the society; and the relationship between community and organisations has developed the concept of CSR. Since nobody wishes to gain an award from a disreputable or even an unknown or undistinguished patron, it follows that those who make public awards need to be reputable and well-known. Consequently, sponsorship bears a mark of approval, which is good PR in itself.
If we look around in Pakistan, we find innumerable hospitals, educational and welfare institutions being run by various industrial, trade and business houses. Perhaps, many of you might have heard about Madina-tul-Hikmat, an institute for higher learning and research in Tib, set-up by the Hamdard Foundation for promoting the Unani (Greek) system of medicine.
Another organisation which has a noteworthy public welfare programme is Fauji Foundation. Set up by the Pakistan Army, Fauji Foundation (FF) is undertaking CSR activities in healthcare, education and vocational training for ex-servicemen and their families. It was running 11 hospitals, 23 medical centres, 31 fixed dispensaries and 41 mobile dispensaries in areas not catered for by the existing network of army hospitals. In addition to 90 schools and colleges, with enrolment of about 40,000 students, it was running nine technical training centres for males and 66 vocational centres for females. It has about 12,400 employees, including about 4,620 ex-servicemen.
Formed on the principle of generating profits to buy additional welfare for the armed forces personnel and to provide post-retirement employment for retired personnel, Army Welfare Trust (AWT) and its entities, like Askari Bank, Askari Insurance, etcetera, have provided jobs to about 5,000 persons.
In Pakistan, PTC is one of those private sector organisations that have the largest CSR programme. PTC’s proactive approach towards environment, health and safety has won it numerous awards. The company, which has over 600,000 people economically associated with its operations and paid Rs75 billion in taxes and duties in 2014, distributes about four million saplings annually, free of cost, under its afforestation programme. Earlier, it provided more than 600,000 saplings for plantation along the entire 157km Peshawar-Islamabad motorway.
It also extends help in modernising agriculture. “From introducing new techniques of cultivation,” says Buner farmer Muahmmad Yousuf, “to helping us in distressful times like 2010 floods, pest attacks and other calamities, PTC has always been there for us,” treating farmers, both in good and bad times, like family members.
Sialkot Chamber of Commerce and Industry is another organisation which has earned esteem and people’s trust by undertaking CSR projects. Some of the projects launched by it include: Sialkot International Airport, Sialkot dry port, roads and infrastructure development projects, elimination of child labour, Sialkot Business and Commerce Centre, Sialkot Export Processing Zone, Sialkot Public School, Sports Industries Development Centre, Sialkot Tanneries Zone and a centre for Seerat Studies.
Prominent among other local organisations undertaking CSR projects are: Shaheen Foundation, Police Foundation, OPF, PPL, NBP, PTCL, PSO and Bahria Town. Recently, PSO has donated Rs8.5 million to the Cancer Foundation for building a 100-bed not-for-profit cancer hospital in Karachi.
In some countries, it is lawful for corporate bodies to give donations to political parties as well. For instance, since 1974, big corporations in the USA bear most of the cost of national conventions of both the Republican and Democratic Parties. The sponsors say, the voters should not consider corporate contributions to the conventions to be different from advertising for major sports events, like the Super bowl. In the USA, corporations also sponsor events ranging from local parades to nightly news on the television networks. In Pakistan, some entities sponsor television talk shows, news bulletins, plays, etc.
Even important international conferences are sometimes underwritten by big business. In 1999, for example, corporate donations, mostly from major arms contractors, covered about one-third of the cost of NATO’s 50th anniversary summit celebrations in Washington. Several months later, the World Trade Organization’s meeting in Seattle was heavily financed by big companies, all of them highly dependent on trade. In some countries, including Denmark, it is mandatory for 1,000 largest companies, investors and state-owned companies to include information on CSR in their annual financial reports.
In Pakistan, the Employers Federation of Pakistan (EFP) has taken the responsibility of promoting CSR in the industry. For companies demonstrating best practices in CSR as well as occupational safety and health, the EFP has instituted awards.