CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION

By Ambreen Waheed

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A MEMBER OF THE ASIA-PACIFIC CSR CENTRE GROUP AND THE SOUTH ASIA ALLIANCE FOR RESPONSIBLE BUSINESS

EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION

CONTENTS
1.0 2.0 2.1. 3.0 3.1. 3.3 4.0 4.1. 4.2. 4.3. 4.4. 4.5. 4.6. 4.7.
4.7.1. 4.7.2. 4.7.3. 4.7.4. 4.7.5. 4.7.6. 4.7.7. 4.7.8.

PREFACE ......................................................................................................................................................... 3 INTRODUCTION ............................................................................................................................................... 4 Why Map CSR in Pakistan? .............................................................................................................................. 6 WHAT IS CORPORATE SOCIAL RESPONSIBILITY?.................................................................................... 7 How CSR Has Evolved through History ............................................................................................................ 8 How it is Currently Defined and Understood ................................................................................................... 11 HOW IMPORTANT IS CSR IN TODAY’S WORLD? ...................................................................................... 13 Global Principles, Local Application ................................................................................................................ 13 Insurance against Bad News........................................................................................................................... 15 Risks of Non-Compliance ................................................................................................................................ 16 Factors Driving CSR Growth ........................................................................................................................... 17 World Trends in CSR Demand & Supply......................................................................................................... 18 CSR and WTO Requirements ......................................................................................................................... 18 Business Case................................................................................................................................................. 18
Access to Markets ..................................................................................................................................................................19 Improved Financial Performance............................................................................................................................................19 Slide in Operating Costs.........................................................................................................................................................19 Brand Image and Reputation..................................................................................................................................................19 Growing Sales and Customer loyalty......................................................................................................................................20 Productivity and Quality Enhancement...................................................................................................................................20 Employee Retention ...............................................................................................................................................................20 Less Scrutiny by Regulatory Bodies .......................................................................................................................................20

5.0 5.1. 5.2. 5.3. 5.4. 6.0 6.1. 6.2. 7.0 7.1. 7.2. 8.0 8.1. 8.2. 9.0 10.0 10.1. 10.2. 10.3. 10.4. 10.5. 10.6. 10.7. 10.8. 10.9. 10.10. 10.11. 11.0 12.0 13.0 14.0

HOW DOES CSR FIGURE IN THE PAKISTAN CONTEXT?......................................................................... 20 CSR Practices in Pakistan............................................................................................................................... 21 Initiatives by Support Organizations in Pakistan ............................................................................................. 22 In Search of Competitive Advantage ................................................................. Error! Bookmark not defined. CSR in the Light of Islam................................................................................................................................. 24 IS THERE A CSR ROLE FOR GOVERNMENT? ........................................................................................... 24 Examples from the World ................................................................................................................................ 24 Meanwhile, In Pakistan… ................................................................................................................................ 25 WHY THIS STUDY AND HOW ....................................................................................................................... 26 Methodology .................................................................................................................................................... 26 Benchmarks..................................................................................................................................................... 28 RESEARCH FINDINGS .................................................................................................................................. 28 Data Analysis................................................................................................................................................... 29 Response Analysis .......................................................................................................................................... 29 GENERAL PERCEPTION............................................................................................................................... 32 STATE OF CSR ............................................................................................................................................. 37 CORPORATE GOVERNMENT.................................................................................................................. 37 BUSINESS ETHICS PRINCIPLES ............................................................................................................ 39 ENVIRONMENTAL COMPLIANCE ........................................................................................................... 40 SOCIAL COMPLIANCE ............................................................................................................................. 42 DISCLOSURE AND REPORTING............................................................................................................. 46 PRODUCT INTEGRITY ............................................................................................................................. 47 CORPORATE GIVING OR COMMUNITY INVESTMENT ......................................................................... 48 STAKEHOLDER INVOLVEMENT.............................................................................................................. 50 SUPPLY CHAIN SECURITY...................................................................................................................... 51 FINANCIAL PERFORMANCE ................................................................................................................... 52 LEVELS OF COMPLIANCE OF CSR PRINCIPLES.................................................................................. 54 BRIDGING THE GAP...................................................................................................................................... 55 CONCLUTION................................................................................................................................................. 57 RECOMMENDATION FOR CSR STRATEGY................................................................................................ 58 REFERENCES ................................................................................................................................................ 74

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EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION

All of us – the private sector, civil society, labour unions, NGOs, universities, foundations, and individuals – must come together in an alliance for progress. Together, we can and must move from value to values, from shareholders to stakeholders, and from balance sheets to balanced development. Together, we can and must face the dangers ahead and bring solutions within reach. – Kofi Annan UN Secretary-General

1.0 PREFACE Corporate Social Responsibility (CSR) is now moving towards Responsible Competitiveness, a precept that implies that there is a role for business in influencing policy for business success. The global CSR movement has passed through varied phases in time and in concept with regard to the implementation of CSR. Initially grounded in corporate philanthropy, it moved on to solidarity movements or environmental activism with citizen sector movements taking on business. At the same time governments and courts have laid down more stringent parameters of CSR is “the integration by corporate behaviour, compelling business towards legal compliance, damage control for civil society and consumer reactions, and then on to efficiency gains and differentiation for competitive advantage. Over the last ten years there has been a shift from antagonistic activism to positive engagement between companies and their stakeholders. In Europe business organizations and their stakeholders are taking collaborative actions for debating and creating CSR policies and strategies to achieve a competitive advantage at a national stage and to move towards the next wave of responsible competitiveness which is innovation, sustainability and future focus.
enterprises on a voluntary basis of the social and ecological concerns in their business transactions and their relations with the involved parties” .CSR is a dimension that should be part of the strategic orientation at the basis of enterprise and should therefore interact with all spheres of company management: with the financial aspects, with production, with marketing, with Human Resource and more generally with corporate strategies and policies.

In the Asia Pacific most of the countries are riding the so-called second wave of CSR, which is efficiency-centred and market focused. They have reached conceptual clarity and are looking at the impediments to CSR implementation. In Pakistan, however, we have just started our journey and are struggling with the first wave i.e. of philanthropy and legal compliance which is society and government focused.

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2. Now. which can market themselves by adopting a demonstrable CSR strategy. possibly under the aegis of SECP itself or an academic or CSR research institution. Pakistan can either let this opportunity pass it by or swing into action in case a crisis like the Sialkot child labour crisis hit. An example of such an institutional arrangement would be the formalization of a CSR policy and learning group comprising individuals representing relevant stakeholders. building capacities. Beginning as a semi-formal working coalition. Has the Pakistani enterprise arrived at a stage where it can learn from experience around it and take a jump forward to catch the third wave of differentiation and competitiveness built on responsible business practice? Is the Pakistani enterprise mature enough to assess its own processes against global CSR benchmarks and then turn shortcomings into differentiators to capture future markets. and to do so require a collaborative effort that supports a culture of compliance and an environment that enables responsible thinking and practices.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION In Pakistan’s immediate neighbourhood. which are surely steered by responsible and ethical business practices? Sadly. as indicated by the findings of this research. Taking Pakistan into the current wave of CSR means building responsible competitiveness. the answer to these questions is in the negative. followed by the development and implementation of a national CSR strategy supported by all important stakeholders. Pakistan’s early promise in the wake of the widely recognized Sialkot Partnership against Child Labour has lost momentum. or Pakistan could act to embed a national CSR strategy into decision-making and business practice through effective policy. a role for business in working with policy makers to create an enabling environment for responsible and ethical business to flourish? Does business have a responsibility for raising awareness. incentives and a system of credentialing that can assure overseas buyers of the country’ distinct position as a socially responsible supplier country. but these are some of the questions that confront policy makers as they determine the need for and the direction of a national CSR www. From this first step CSR practices need to evolve through an institution for CSR dialogue that responds to ever changing market demands. barring a few notable exceptions.rbipk. This is only possible by underscoring CSR as a priority of national policy.org © Responsible Business Initiative 4 Ambreen Waheed .0 INTRODUCTION Does CSR have a value to corporate and national competitiveness as well as to society at large? Is there at all. and affecting change in ways that impact national competitiveness in a globalizing world? Does Pakistani business have anything to contribute meaningfully to the global CSR debate and how it influences it? CSR is no longer a new phenomenon for business. we see that during the last decade or so India and Sri Lanka have gained competitive advantage due to their pro-activeness and future marketcentred policies. another opportunity is coming this way in the emerging manufacturing hubs created by the various upcoming enterprise zones and so-called “textile cities”. this group can evolve into an independent organization if the situation demands.

whether they were mining or natural resource exploration companies or retailers sourcing consumer goods and produce from cheap labour markets in the developing world. In contrast. Yet. and the highly volatile business scenario. legal compliance. CSR is being interpreted as the expectation society has of business.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION policy. contrary to expectation. But. enhancing public relations or business affiliations etc. Thus. Rather. CSR is often a vision based on particular sets of values that business leaders often aspire to. government initiatives. MNC’s are in the forefront of demanding “responsible behaviour” from their suppliers or sub-contractors.org © Responsible Business Initiative 5 Ambreen Waheed . marketing oriented initiatives. Who would have said ten years ago that a random debate in the citizen sector would nudge the world into a new paradigm of corporate behaviour? As we know it today. on- www. and as such is more of an ever-changing philosophy. quite open to interpretation and re-thinking of business strategy based on decisions related to ethical values. and supporting communities or nurturing environment. From initial finger pointing and confrontationist strategies spearheaded by NGOs and civil rights activists to the blossoming of a host of sustainability partnerships between these same NGOs and their erstwhile corporate foes. lingering concerns about corporate intentions and NGO agendas continue to muddy the discussion. respect for stakeholders. globalization and localization patterns. multiple variables like stakeholder awareness. The report has been compiled on the basis of information shared directly by companies as well as by extensive literature review from variety of public sources such as newspapers. Thus the CSR discussion now impacts supply chains of multinationals (MNCs) even in their remotest reaches. books. even as the sustainability motive drives cooperation. As a result. all have had a role to play in determining the centrality of CSR in today’s business environment. This side of CSR has of late been strengthened by initiatives from influential organizations like the World Trade Organization (WTO). This report presents the prevailing state of corporate social responsibility in Pakistan. Increasingly. CSR is the leadership vision that is more than occasional gestures. Governments are reviewing regulatory frameworks to integrate CSR into routine corporate disclosure regimes. CSR has its roots in consumer consciousness and solidarity movements in developed consumer societies that saw elements of social and environmental exploitation in the behaviour of major global enterprises.rbipk. especially in the case of brand supply chains in the developing world to avoid labour practice norms or the environmental impact of obsolete plants relocating to countries with less stringent safety or environmental regulations. with an eye on their stakeholders to safeguard repute and often attracted by the competitive advantage it brings. CSR is not a defined code or a toolkit to be employed in the manner of an operating manual. it’s a comprehensive set of policies and programs enriched with the urge for developing a better society. CSR has definitely come a long way.

This burgeoning demand for socially responsible business behaviour has been matched stepfor-step by a number of credible supply side efforts that help the consumer or investor objectively differentiate between “good” corporate citizens and everyone else.1. including the ISO 14000 standard for environmental management systems. A growing body of research is enriching the business case for a socially and environmentally responsive corporate sector. raging from inter-faith groups to labour unions to watchdog organizations. The UN Global Compact and the Johannesburg World Summit on Sustainable Development both validate this trend for CSR. industry. Starting with the brief back ground about how the CSR roots were planted. The driving factors have been discussed along with the influence in the countries like Pakistan. With beginnings in diverse contexts. Closer to home Securities and Exchange Commission of Pakistan www. From product integrity issues confronting brands like Nike and Martha Stewart. Other than for a handful of corporations. the Global Reporting Initiative guidelines for sustainability reporting. but among top decision-makers in Government. the SA 8000 social accountability standard. At the end we have proposed the strategy to fill up the gaps in the CSR implementation and the steps essential for Pakistani businesses to compete their international competitors by increasing their repute and maintaining their quality. Why Map CSR in Pakistan? CSR is now a mainstream business management issue the world over. The “stakeholder” had finally arrived to share the boardroom agenda with the “stock-holder”. followed by tougher regulations on corporate disclosure. the report explains the growth and expansion apart from the need to conduct this type of research in Pakistan. 2. the ethical dimensions of an enterprise’s conduct became a focus of debate not only within citizen sector organizations where it had originated. a set of globally acknowledged yardsticks are now available for establishing credentials of any enterprise that wishes to be judged for its impact on society.org © Responsible Business Initiative 6 Ambreen Waheed . A detailed analysis has been established over the data collected from variegated business sectors in Pakistan including the multinationals as well as the small and medium enterprise. all emerged in response to the need for a global set of implement-able CSR standards. Lobbyists and legislators.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION line services. The new millennium has seen companies in over-drive. Enron drew in the USA into the CSR debate as well. and more recently.rbipk. reports from various NGOs. especially in Scandinavia and Western Europe were quick to echo civil society’s demand for corporate accountability and disclosure. The nineties are believed to be a watershed in pushing CSR towards the top of the agenda following a groundswell of consumer concern about standards of corporate behaviour along product supply chains criss-crossing the globe. The research methodology explains the development of the questionnaire catering the set parameters and the data collection strategy. This was not always so. academics and civil society. this nexus of consumer demand and legislation has meant a paradigm shift. academic studies and international conferences and dialogues between governments. to process integrity issues highlighted during the Shell and Barings episodes. rallying to present their humane values in sharp relief to their traditional competitive qualities. These.

2. this study emphasizes: AREAS OF FOCUS FOR THE STUDY - - how companies define Corporate Responsibility and Corporate values the relationship of values to business performance to identify best practices for managing corporate values. ILO and citizen sector organizations to combat child labour. while the sporting goods industry stepped away from the brink only after the Sialkot Partnership led by industry associations brought together the government. The country’s carpet industry suffered almost a billion dollars of damage through the 1990s as a result of the Iqbal Masih case. 1. The Need for CSR in Pakistan CSR approaches being practised in Pakistan Factors driving CSR.” www.org © Responsible Business Initiative 7 Ambreen Waheed . “I don’t know of any developing country government that can deliver services in a million places at once everyday. 7. To explore how deeply corporate values are embedded in organizations and to examine the role values are playing in Pakistan’s context.0 WHAT IS CORPORATE SOCIAL RESPONSIBILITY? Allan Hammond of the World Resources Institute says. 8.rbipk. 5. Since then the nation’s textile and edible products export industries have continued to face demands by international buyers for CSR credentials Within this environment. like reputation. Barriers to implementation of CSR WTO requirements Assessment of potential threats & opportunities Policy or regulatory measures to support CSR Outputs/targets industry can set to report on CSR Identify best practices Strategy for effective implementation of CSR 3. loyalty etc.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION (SECP) has made a first contribution with its Code of Corporate Governance. and the 2002 Trade Policy articulated for the first time the government’s intent to mainstream international industry benchmarks through appropriate institutional support. 4. If we want to solve some of these social problems. 10. Pakistan itself has had to learn quickly in adapting to the CSR paradigm. 9. 6. which are regularly presented as CSR. one of the best ways we could do it is to hire the right global companies. it is unavoidable for Pakistan to actively consider evidence-based strategy development as a first step towards creating a well-directed and meaningful CSR culture in Pakistan. 3. We have numerous examples of corporate philanthropy.

As a result a voluntary initiative. World Business Council for Sustainable Development (WBCSD) was formed in 1991. This initiative was attacked because critics said that CSR actions should be mandatory instead of voluntary. But because in these early days the process lacked the rigour or standards against which performance could be measured. started a new wave of criticism which triggered a complete different thinking on CSR and hence many CSR definitions emerged during this period. In the late 80’s Ben & Jerry's ice-cream led in voluntary social auditing. opening up their records and processes for evaluation and inspection. Hence. and safety and consumer protection are weak to handle multinationals. When the activist groups and governments felt that current laws governing environment. Social and environmental standards began to be developed to cope with this situation. Even though it is still favoured by corporate leaders. universities and museums as a philanthropist polluted towns with smoke and debris and dealt harshly with workers as an industrialist even www. the old model of corporate philanthropy is looked upon more as a self-actualization gesture than as socially responsible attitude. Business are expected to clean up the mess they have generated to the environment. Social reports emerged as a result. The CSR concept evolution started with the concerns related to the damage created by business on environment and society at large by way of activities linked to their business operation. Certification programmes have been emerging since all through the 1990’s. For example Andrew Carnegie. and a host of others have continued to work on different social aspects of CSR.rbipk. In 1980’s and 1990’s examples like Shell spoiling the environment and violating the human rights in Nigeria.1. and they are responsible for the depletion of these resources and the negative impact caused by running of their business to environment and the community around their business. it did not create a major following. Lately they have joined hands in the form of the International Social and Environmental Accreditation and Labelling (ISEAL) group with a view to oversee standard identification and standard implementation. This step failed due to the lack of support from governments and opposition from different organizations. health. How CSR Has Evolved through History Corporations use natural and human resources from their environment to run their business and generate profits. As a further development social auditing was introduced by third party verifiers to evaluate the compliances and the social state of businesses. Fairtrade Labelling Organizations International. CSR has continued to evolve rapidly over the last thirty years. The current CSR concepts started formulating in early 80’s. Until 1980’s CSR was considered same as corporate philanthropy.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 3. the steel magnate who built libraries.org © Responsible Business Initiative 8 Ambreen Waheed . On the other hand. Critiques argued that voluntary CSR cannot hold corporate operations accountable. Forest Stewardship Council. companies like Nike and GAP Inc were hit by the bad repute of their suppliers violating labour laws and exploiting poverty and promoting discrimination. Several certification-centred groups like Social Accountability International. the United Nations took the initial step by providing a code of conduct for such trans-national companies.

org © Responsible Business Initiative 9 Ambreen Waheed . WWF and OECD founded “Silent Spring” by Rachel Carson exposed 4 DDT Cuban Missile Crises Friends of Earth founded First Earth Day Celebrated in USA 1 2 3 www. Implementation of the policies 6. the adoption of the codes of conducts by the organizations is an encouraging act.rbipk. Customer expectations and demand for “clean and green” companies have led to a number of benchmarks and guidelines. In today’s environment libraries or universities might not accept funding from a business known to pollute or be socially irresponsible. Development of Policies and identification of best practices 5. During the last decade.3 CSR Drivers A Chronology of CSR Year Crisis Pressure & Enabling Organizations Focus Business action & Reaction • Denial • Information hiding • Environmental disaster • Damage control Civil Society Action & Reaction • Pressure Building • Voice Raising • H/C Rights Awareness • Criticism for Gov. such as the Sullivan Principles. Quite a few pharmaceutical companies have reduced the prices of the drugs direly needed in the underdeveloped countries. The evolution from CSR theory to CSR practice can be broken down into several phases. the UN Global Compact and the Organization for Economic Cooperation and Development (OECD) guidelines on multinational enterprises.2 3. Wave of awareness by the society and the stake holders 3. Realization of the responsibility by the businesses 4. Several examples exist in the leather. footwear and apparel industries establishing codes of conduct and monitoring programs not only due to the prestige and competition but also with the aim to contribute towards society.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION employing armed guards to shoot at strikers. 1. In 1999 students from a number of major US universities formed the Workers Rights Consortium (WRC) to protest against Nike and its sponsorship programmes because of human rights allegations. & Business • Demand for policies for compliance 1960-1979 • Pressure building against the Government s and 1960 1962 1962 1969 1970 Amnesty International l. Pressure building up against the businesses 2. Development of several programs to implement CSR Performance and Compliance Evaluation CSR Approaches Business Ethics Cleaner Production Environment Fair-trade Human Rights Labor Practice Workplace Safety Occupational Health Quality Management Supply Chain Integrity Triple Bottom line • • • • • • • • • • • 3.

Indian Ocean London bombing. • • • • • • • • Security • WTO • Economic imbalance • Governance • Accountability Accountability Transparency Governance Global Collaborations Security Stakeholder involvement Collaborations with academia • • • • • • • Demand for SR also from other Stakeholders especially from Government Diversity Global Social Responsibility Responsible Competitiveness Governance Capacity building Enabling Adapted Table 3. chemical reactor 5 ruptured and infected the ecosystem. agreement designed to protect the stratospheric ozone layer Green Consumer Guide Launched Exxon Valdez Oil Spill. USA Enron Scandal American Invasion on Afghanistan rd 3 Gulf War. intl. Ukrain Montreal Protocol.org © Responsible Business Initiative 10 Ambreen Waheed . Consumers boycott Nike Mad Cow Disease 6 Kyoto Protocol Battle of Seattle 7 World Social Forum held . Alaska Fall of Berlin Wall. highlighting security and civil human rights World Summit on sustainable development. Brazil Triple Bottom Line Shell’s Brent Spar issue Shell’s Nigerian Scandal Nike Sweatshops. Spain Shell reserves controversy Tsunami Catastrophe . China Nelson Mandela Freed 20 Anniversary of Earth Day SustainAbility formed First Gulf War First Earth Summit. India Chernobyl Disaster. Italy Iraq Turmoil.the WEF’s failure 9/11. UK • • • • • • Business responsibility Process Implementation Strategies development Policy development Efficiency Risk management • • • • • • • • • • • • • • environmental and natural resource limits NGOs and environment ministries formed Demand for Compliance Environmental NGO 1980 – 1997 • Human /labor right violations Corruption Environment Negative impacts • • Capacity Building Societal Awareness Legislation development Strategies development Auditing Accounting Human Rights formulated Collaborations/forums Consumer actions 1998 – 2005 • Globalization • Demand for Responsibility in behavior & actions to SH. Abu Ghareeb human rights scandal Madrid Train bombing. terror attack changes the world history. UN credibility shattered Parmalat Scandal. Watergate Scandal USA End of Vietnam War nd 2 Oil Crises Iran revolution / Soviet invasion of Afghanistan Bhopal Disaster.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Business 1971 1973 1973 1975 1978 1979 1984 1986 1987 1988 1989 1989 1989 1990 1990 1990 1991 1992 1994 1995 1995 1996 1996 1997 1999 2000 2001 2002 2002 2002 2003 2003 2004 2004 2004 2004 2005 Green Peace founded Seveso Disaster.rbipk. East Germany Tiananmen Square Massacre.2 www. Italy.

more corporations are becoming actively involved in arts. “Corporate Social Responsibility is achieving commercial success in ways that honor ethical values and respect people. and is important to legitimize business activity. Ethical Business Practices. not as philanthropy. “The key for corporations is that CSR activity is seen not as PR. product donations. The concept continues to go through its evolutionary march and so does its definition. commercial and other expectations society has for business. No one definition describes CSR.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 3.focussed activities in terms of HR policy. the establishment of non-profit foundations. and employee volunteerism or In addition to charitable giving. as well as to society at large. Corporate philanthropy is an act of giving and this business practice includes the giving of cash gifts. Stephen Timm’s definition above very clearly sets CSR apart from philanthropy which is giving back to the community in some sense whether it is through funding.org © Responsible Business Initiative 11 Ambreen Waheed . environmental regulatory compliance. particularly in the global activity where businesses are accused of practicing soulless capitalism. A sampling is given below: “CSR is the organizations social license to operate. the term CSR has continued to adapt to the changing situation in businesses world over. ethical. education. This vision of 11 business hardly suggests that profits should take a back seat to other considerations” “Globalization creates risk as well as opportunity and business leaders have considerable responsibility to help make it a constructive rather than a destructive force. www. and making decisions that fairly balance the claims of all key stakeholders” “CSR when well practiced is about sound business practices and good management that deliver value to businesses and their shareholders. Responsible behaviour toward employees. but each of the following reflects a value-driven expectation that a business generates within its customers. and civic and community outreach. and the natural environment”10. health and human services.3 How it is Currently Defined and Understood Over the period of the past thirty years.rbipk. communities. but as 13 mainstream to the business – justified not just by altruism but on sound business ground”. volunteering or any kind donation or personal involvement and CSR involves more internally . culture. “CSR means addressing the legal.”8 Corporations need to have powerful vision and highest values to go further than 9 compliance with current regulations and best practice. shareholders and communities is not a luxury for good economic times but a core concern at all times”12.

International organizations were formed. The meaning of this new emphasis on social responsibility is less obvious than the trend itself. getting richer and better educated. the process of rebuilding and restructuring was begun. So what was good enough yesterday may no longer be good enough today. Shifting one-time philanthropic donations into a focused program of community partnering can be a good first step for companies that want to develop a comprehensive approach to social responsibility. We can say it has gone through different stages of evolution over the last 30 to 40 years.rbipk. Businesses were developed through incentives. “defining responsible behavior and getting CSR right is difficult because it is a journey. labour standards and customer sensitivity. and senior executives now started to identify social concerns as top issues on their companies’ agendas. and certainly will not 14 be good enough tomorrow. it has to be made clear that CSR extends beyond the random act of generosity to include such commonplace values as paying taxes. However. not a destination. often lobbying with governments to develop policies and laws related to human rights and fair 15 In the 80’s and in the mid 90’s the world treatment for vulnerable segments of society economy saw several ups and downs. It is time Pakistan has a mechanism for collecting and analyzing credible real-time data on accepted CSR variables within its multi-layered corporate sector. companies around the world have adopted formal statements of corporate values. which can be referred to as “generations”. Increasingly. John Zinkin of Nottingham University explains. open disclosure. www.” CSR still is an evolving concept and has taken its shape based on different events in different geographical contexts over a period of time. Socially responsible companies will consider the community impact of all aspects of their operations. Only then can we see CSR becoming a strategic asset for increasing industry competitiveness and a socially responsive corporate culture. corporate social responsibility implies a much broader obligation than philanthropy alone. As countries evolve. so society’s expectations of company behavior become more demanding.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION A socially responsible company may include philanthropy as a part of its overall efforts to be stakeholder-focused. However.org © Responsible Business Initiative 12 Ambreen Waheed . During the 1960’s and 1970’s several non-governmental organizations came into being. After the massive destruction of World War II. rather than reserving community issues until after profits are made.

EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 3rd Generation Integrated Strategic engagement for sustainable competitiveness 2nd Generation Systematic engagement for risk management and increased under-standing of stakeholders 1st Generation Pressure driven engagement for pain alleviation with localized benefits Fig (3.1.org © Responsible Business Initiative 13 Ambreen Waheed . several advocacy or enabling organizations and initiatives have come into being in the face of the growing need for corporate 17 disclosure and social accountability . there is A constant re-evaluation of what CSR means. Local Application CSR Dynamism In a perpetually changing world. We are now on the verge of the 4th Generation and importance of CSR is still growing.rbipk.” Chris Perceval Director CSR International www. For societies in which business operates Globally organizations. and perhaps as a consequence.3) ©AccountAbility Several international pacts were signed and organizations emerged to address a variety of social and environmental problems collectively. individually and collectively. Corporate governance and responsible investment emerged as key areas of regulatory concern as a consequence of highly publicised cases16. Global Principles. Concurrently. The Fig (3. especially UN organizations. Within business. 4.0 HOW IMPORTANT IS CSR IN TODAY’S WORLD? 4. for government.3) elaborates the focus on the activities during these three generations. are promoting CSR as the path to competitive And for the environment.

as the key defining components of social reputation. with over 80 percent support. According to Nitin Desai. protect human health transportation and information and the environment.. • Work with governments and communities in which we do and export capacity. more legitimate minority. high level of growth and promote • Promote the application of these Principles by those with whom sustainable development’. with only 28 percent feeling strongly confident and 54 percent feeling more cautiously confident. While 47 percent are resolutely proud of their companies for having a positive social reputation. Marketplace www. North American CEOs' prioritize supporting community projects over workplace safety in their definition of CSR. with 64 percent feeling strongly that the public perceives their company as a positive social performer and 30 percent feeling somewhat guarded confidence. to sustain a business to improve the quality of life. However. technology transfer such as color.org © Responsible Business Initiative 14 Ambreen Waheed . age. while Central/South American and European CEOs prioritize workplace safety highest. gender. with corporate supporters of these initiatives is growing from a small minority to a larger. About 60% CEO believe that CSR is vital to profitability and stress that CSR must remain a priority. According to a survey conducted by PriceWaterhouseCooper to reach CEO’s around the word to gather their view on CSR "Many Global CEOs seem to view their companies' social reputations as a work in progress. and innovation. diversification other property rights. Asia-Pacific CEOs have the lowest confidence in public perception of their companies as positive social performers. enterprise • Compensate employees to enable them to meet at least their development and business basic needs and provide the opportunity to improve their skill and capability facilitation (including • Provide a safe and healthy workplace.. CEOs definitions of CSR differ across regions. There is emphasis on designing projects to facilitate less developed countries in understanding and implementing CSR. regardless of legal requirements. corporate • Promote equal opportunity for employees with respect to issues responsibility. and communication technology). based on an integrated treatment those of employees. particularly. of investment. the communities. CEOs prioritize workplace safety and responsiveness to all stakeholders.rbipk. UNCTAD is assisting developing countries18 in designing and implementing active policies for building productive capacity The Sullivan principles act as a benchmark of CSR and international competitiveness • Express our support for universal human rights and. the UN Under-Secretary-General the evolution of corporate social and environmental consciousness over the past decade. another 41 percent offer a qualified view-'to some extent' The survey reported highest confidence in CSR reputation amongst North American CEOs. even amidst the current economic downturn. race. As a group. we do business. • Promote fair competition including respect for intellectual and competitiveness. ethnicity or religious beliefs.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION advantage and sustainable development.

even with the most strident of remedial steps.” 4. It can wreck market confidence. Even CSR Opportunity companies that appear 100% Globalization creates risk as well as opportunity. they also need to be sensitive to local communities. founder of Ben and Jerry’s homemade ice cream and a well-known social entrepreneur believes that businesses tend to exploit communities and their workers and he thinks that this is not the way the game should be played. It’s the best management tool for voiding and mitigating business and marketing risks. there are growing legal implications linked to unethical business practices. rather than destructive. In the e-information age any negative news can be a Tsunami for even the most stable of organizations. who too are progressively becoming wary of such sensitivity. norms and work practices. In today’s world social “believe” in it or not. Insurance against Bad News While corporations need to adopt common values that work across cultures and nationalities." history tells us they will be DiPiazza. and business get community support when they support the community.2. Being proactive and embracing CSR at the earliest possible is a good risk managing strategy for a company. and compliant today can still land up business leaders have considerable responsibility to help in trouble tomorrow because make it a constructive. The ensuing cost to competitiveness is not difficult to surmise. may create the critical mass necessary to push this minority into a majority.org © Responsible Business Initiative 15 Ambreen Waheed . There is a need for companies to be more “futuristic” and proactive in their thinking www. Good news are short lived but negative news has a long lasting negative impact on stakeholders. force. The media highlights corporations for their failures rather than their successes – and unethical behaviour even if it is unproven means a blot on reputation that takes a long time to clean. Ben Cohen.rbipk. Corporations are finding it a challenge that is difficult to respond to.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION competition. CSR is a corporate survival issue. corporate values and community initiatives have a CSR is a corporate major role in increasing profits through larger sale of product by survival issue responsible companies. judged by tomorrow's standards even when their past is examined. effect customer loyalty and enrage general public. cultures. He envisions that “business has a responsibility to give back to the community because the business is allowed to be there in the first place. Increasingly. even if it generates profits for shareholders. Whether you Over recent years it has become more and more evident that customers reject products developed. the business ought to support the community. as well as burgeoning environmental and social consciousness in society at large. responsibility. The global stakeholder mindset reflects that mere compliance to regulation is not enough to label a corporation as socially responsible. made or marketed through ways that generate unethical profits.

and created an emergency situation for the top management in which the company was compelled to change their policies and devise a new strategy to clean up their supply chain and make their suppliers compliant with the standard practices. internet etc. negative publicity. The company was spotlighted by its corruption. www. and health & safety issues etc. Relationship building is a key to success of any business and it’s only possible when the business practices are the ones acceptable to everyone. Shell’s intimate involvement in Nigeria while a key opposition leader was assassinated and its role in environmental damage in Ogoni-land too brought severe criticism against the multinational. There are several examples that alarmed the business sectors over the last two decades and enforced them for a strategy change. bribery and false projection.org © Responsible Business Initiative 16 Ambreen Waheed . the world leader in sporting goods. The watershed event was by many accounts. transparent reporting then emerged as a solution to avoid such corruptions in future which emphasizes the ethical dimension of CSR. political lobbying. Opposed Shell’s decision to dismantle and dispose of one of its oil platforms in the North Sea. This too led to massive consumer boycotts. and bowed to public opinion in the new media war. 4. stakeholder and pressure group criticism. Risks of Non-Compliance Businesses had to pay a huge cost for failing to understand and integrate socially responsible values and practices in business dealings with stakeholders. Enron’s declaration of false profits. In the 70’s and 80’s Shell was heavily criticized for continuing to carry out the business in South Africa and breaking anti-apartheid sanctions. The Company had to face criminal investigation and law suits and bad repute. It is now possible for companies to make a difference not only with their products but also with their values. Nike. Initially unmoved Shell ended up paying a price in image and reputation. costing them more than double to what it would have cost to decontaminate the structure and reuse or dispose of the waste on land. the Brent Spar crisis in 1995. environmental problems. Enron came up from nowhere to become America’s largest company in just 15 years employing 21.rbipk.000 staff in more than 40 countries. Enron’s latest report on environmental and social situations outlines this as a measure taken and how the company is gearing up to address human rights.3. media. In the face of consumer boycotts even a mighty company like Shell came to feel the might of the mass market. Greenpeace. A company’s repute and success is dependant on the relationship with all these stakeholders. Several corporate scandals have been highlighted by the pressure agencies like NGO’s.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION so they can lead the market by anticipating new legislation. The Enron scandal was another landmark in the history of CSR and built up a strong case for its implementation. The Nike issue acted as a catalyst to bring about a change in management policies and pointed out that consumer expectations are not restricted by geography. shredding of documents and auditors inability to reveal companies unorthodox business practices are just a few of the major charges. was struck by controversy over their labour practices in Asia.

while representing that the driving force actually comes from the organization’s stakeholders. they can also support the role of governments. As for its detractors. trading partners which have resulted in a variety of social audits that explains the social performance of an organization. working conditions and marketing ethics etc. According to its promoters globalisation is promoting democracy as well as economic growth. Companies can work with local communities for sustainable development programs by conveying clear values and principles. There is increasing awareness among business leaders in the developed economies that practicing corporate responsibility affects their corporate reputation and brand image. and accepting responsibility for workplaces and workplace conduct. This awareness CSR departments are now commonplace has increased the expectations they had of CSR is now seen as an investment not a cost businesses thus creating a pressure on the businesses to adapt to the social and SRI Indexes are outperforming others economic well being. Studies have shown that their interests and purchasing decisions are linked with Global CSR Trends social criteria. These policies target traditional corporate performance variables such as environmental performance. regulators. Demand for disclosure has increased over time from the customers. environmental activists.rbipk. This is a rare convergence in support of CSR from completely opposing perspectives. companies can not only build trust and mutual understanding with stakeholders. Increasing Business schools teach CSR at PhD level interdependence of shareholder values and © Responsible Business Initiative-2003 the corporate values have brought up a strong case for top management about CSR. www.4. NGO’s have also played a major role in turning the spotlight on the corporate practices creating pressure for the noncompliant organization and boosting the activities of the organization practicing or planning the CSR strategy. Factors Driving CSR Growth The changing scenario of business across the world due to globalization has instigated governments to regulate business and develop policies compliant to this emerging situation. Customers can be both from businesses or consumers.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 4. Also there has been a rapid growth in the ‘CSR industry’ of consultants and accounting firms who are driving the social reporting trend. Awareness of various stakeholders including Triple Bottom Line is an accepted tool shareholders and the general public has Voluntary disclosure is gaining ground increased over the period. especially judging the CSR is now a mainstream business principle environment and human rights.org © Responsible Business Initiative 17 Ambreen Waheed . community groups. globalization can be contained by encouraging CSR as a foil for runaway commercialism and exploitative business practices. investors. Companies that base their business decisions on profit margins alone and ignore their impact on stakeholders can pay a heavy price in both the court of public opinion and the stock markets.

distributors and even consumers are informed about the company’s ethical and social performance. workplace policies. companies have to under-promise and over-perform.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION The Nike experience was a catalyst for bringing supply chain issues into the spotlight. CSR and WTO Requirements To make CSR into a business case. and the lack of such governance in developing countries as well as at international level. who dispose of a highly sophisticated set of economic and social regulations. 4. Corporate progresses towards greater responsibility has always been the result of both push and pull forces.6. 4. EU’s Commissioner for Trade strongly advocates that in order to extend the limited societal benefits of CSR practices it needs to be integrated into broader strategies and public policies.5. Investment groups have also started pressing the companies on their social issues. Pascal Lamy. World Trends in CSR Demand & Supply The European Commission has established a “European Multi-stakeholder Forum” to exchange best practices and explore the European approach to CSR. Business Case Our research also focuses on different definitions and benchmarks being used globally in major regions and at how business is being impacted in terms of their profitability and productivity by www. human rights practices.7. their counterparts in society pushed 19 for change. ethical decision making and corporate governance. that consumer expectations from their favourite brands business are not geographically restricted to their home country but based on universal principles reinforced by the fast expanding information society that links all manner of stakeholders.20 International growth of business and the efforts of WTO to remove global barriers has also pressurised the smaller economies to become competitive. But Nike has also ended up having to lead the pack in changing their previous business practices at headquarters as well as along their supply chains in developing countries. HOW IS CSR CHANGING WITH GLOBALIZATION? 4. They require disclosure on wide range of CSR issues including environment responsibility. Nike’s misfortune was that it became the symbol of what every other global brand seemed to be doing – disregarding their responsibility to exploited workers or an endangered environment. Big business entities are not only concerned about their CSR strategies. Imbalance between the advanced governance system in industrialised countries. ©Responsible Business Initiative-1999 CSR is one of the responses to the imbalances resulting from the acceleration of the globalization process. community involvement.rbipk.org © Responsible Business Initiative 18 Ambreen Waheed . companies are also keen to ensure that their suppliers. Business leaders pulled their organisations to higher standards and.

4. 4. Slide in Operating Costs Environmental stewardship and workplace safety initiatives help improve work place practices. we find that companies often feel that resources expended on mandatory social or environmental compliance is CSR. A socially responsible organisation can benefit from its good reputation amongst its customers and is also recognised as a respectful entity in their business community.org SRI funds have increased from 40 billion US dollars in 1984 to 2 trillion US dollars in 2003. 4.2.7. Enhancement of social standards and benefits result in employee retention which saves hiring and training cost and increase profit by improved productivity through stable work force. Socially Responsible Investments have risen by 7% over the past year even as the total volume of investments has declined 4%. The business case for CSR is now a reality proven through a number of researches.7. on the whole. then this finding is reinforced in the lack of importance being given by them to CSR. Case studies of organizations all over the globe have clearly identified a 21 linkage between socially responsible practices and greater financial gains . Companies addressing ethical. and processes. www. The challenge is to create companies that have the vision and capacities to create socially and environmentally responsible business models that can outperform competitors who do not accept this challenge. And that their donations to charity are CSR costs. Saves revenue on advertising to restore brand image and increase financial viability through increase share prices.1. If we assume that business schools teach what they determine as useful to their pupils. Moreover. reduce wastes. and resource consumption. Increasing their ability to attract investment and trading partners.org © Responsible Business Initiative 19 Ambreen Waheed . Access to Markets According to socialinvest.7. Brand Image and Reputation Companies or brands with good image and clearly defined strategy on corporate social responsibility attract a large number of customers. Thus they improve productivity and reduce costs.3.7. Improved Financial Performance Several academic studies have shown the connection between socially responsible business practices and positive financial performance.rbipk. social and environmental responsibilities have growing access to capital. the business case for CSR is yet to be understood in terms of competitiveness and business advantage. It’s found out that unethical corporate behaviour directly affects the stock prices. In Pakistan.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION implemented CSR practices. Some of the proven benefits to business are discussed below: 4. 4.

Less Scrutiny by Regulatory Bodies Another important advantage observed in case of organizations practicing corporate social responsibility is that they are less scrutinized by the regulatory authorities and are given prompt treatments and extra benefits.7. CSR is still a buzzword for most of the organizations and individuals. 4. quality.7. 4. due to their international linkages and are actually adopting the standards followed in their Need for change head-offices in the developed countries.7. the financial community — to raised by their voice has actually instigated the value the material importance of sustainability government and the businesses to develop management. GRI strategies complying with the international Global Reporting Initiative. The multinationals in Pakistan are ahead of this wave. CSR has created potential incentives for entrepreneurs who can now cater a growing market segment of ethically motivated consumers who are inclined to value based criteria.0 HOW DOES CSR FIGURE IN THE PAKISTAN CONTEXT? In the West CSR has become a touchstone of Corporate trust and a predictor of business longevity. Ernst Ligteringen. taste. availability safety and convenience. Businesses are in a process of attaining the internationally accepted norms of corporate social responsibility often either misunderstanding the true philosophy of CSR or ignoring it. appearance. 5. www.org © Responsible Business Initiative 20 Ambreen Waheed . particularly during tight labour markets.8. Growing Sales and Customer loyalty The common concerns of the customers include price. A good example from Pakistan is Saga Sports. Retention levels may be higher. whose investments in community infrastructure and socially responsible manufacturing made it the world’s largest soccer-ball manufacturing company despite a business environment fraught with child labour allegations 4. Productivity and Quality Enhancement Companies that invest in the working conditions and environmental friendly atmosphere and also involve the employees in decision making tend to have an increase in productivity.7. Discontinuities several NGO’s working for CSR related issues have will lead the core of the global economic expedited the awareness process. Still there is a need to involve civil society and the academia to make a powerful CSR strategy for Pakistan that can be implemented in addition to a strong national body that can enforce the regulations.5.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 4. resulting in a reduction in turnover and associated recruitment and training costs. The birth of Systemic change is needed. Netherlands standards.7. In Pakistan. The pressure system — i. Employee Retention Companies perceived to have strong CSR commitments often find it easier to recruit employees. too.6.e. Employee loyalty and dedication results in effective man hour utilization and hence increase in quality.rbipk.

The apathy of the local business sector was highlighted in the 1996 by the breakdown of the local carpet industry and the threat of damage to Sialkot’s sports industry.. Though taking the reactive measures. the terms being often mistakenly used synonymously.rbipk. the textile sector. primary education. This indicates the need for a mass awareness campaign supported by the government.. Some consider CSR to be a simple compliance with law. A draft One-off philanthropy is good but not sustainable national standard was developed for Business goals are better achieved if linked to CSR aims use as compliance standard approved CSR leaders enjoy entrepreneurial advantage too by Government to replace many ©Responsible Business Initiative -2000 International social and environment compliance standards and buyers code of conduct.1. child labour.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Multinationals and quite a few large nationals have policies committing to environmental. Unfortunately. In 2003 a multi stakeholder forum Why we need CSR Strategy in Pakistan. “Pakistan Compliance initiative” was Money is better spent for preventive interventions launched with support from It costs less over time to fix the process international buyers. the joint effort of the industrialists saved the greater damage foreseen. The result of this effort was inclusion of social compliance in the trade policy and initiation of a project proposal by Ministry of Science and Technology to European Union for encouraging SA800 implementation by subsidizing consulting and implementation cost. but companies can create an even larger impact towards sustainable development if they consider strategically sound CSR investments. Labour exploitation. Some focus is also on cultural programmes such as. www. adult literacy and health sector projects. inadequate employee benefits and unsuitable working environment were few areas pinpointed by the international eye. they are not in any state of danger. but not much has been done to take more proactive measures. CSR Practices in Pakistan State of CSR in Pakistan is still in its infancy. It is mostly a step that makes a difference. establishment of hospitals and diagnostic centres. It costs more over time to fix “end-of-pipe” and the Ministry of Commerce. media awareness and vaccination campaigns.org © Responsible Business Initiative 21 Ambreen Waheed . social and ethical compliances and they have also invested in community projects which includes welfare. These activities are a useful component of CSR. sports events which are mainly initiated to 22 All these corporate activities are cyclical and enhance brand image and product publicity. 5. In Pakistan CSR is frequently equated with corporate philanthropy. reflect a non-strategic and non-business approach to very good societal investments. referred to as Social Investment. This creates a difficulty because top management is still uncertain about the true meanings of CSR. the local industry is either unaware of the benefits brought by CSR or they feel that even if they do not adopt such policies. charity shows. Only few companies have an existing CSR strategy and mostly they are the multinationals who follow their own CSR policies and S standards.

The table-5. departments and institutions recognized by the Higher Education Commission whether they taught CSR as a course or whether it was a subject for faculty or student research.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION targeting businessmen. 5. entrepreneurs and customers so that they are able to appreciate CSR and also the general perils of non-compliance in today’s environment.2.2 elaborates the initiatives taken by different organizations and the key areas they are working on. They pose a risk of misguiding corporations to get involved in “green washing” by doing token efforts or replicating policies and projects done by other Global Corporations or their competitors without realizing the real impact of their initiatives. but it is often observed that the focus of these presentations labelled as CSR tends to examples of corporate philanthropy and the examples cited as CSR best practice often describe charitable acts by companies. few organizations have been formed to work on different issues incorporated in CSR. In Pakistan this activity has not been encouraging so far. this attitude invariably goes unchallenged. several organizations have evolved over the period of time that have played a major role in creating the awareness. These corporations sometimes claim that the driving force actually comes from their stakeholders.rbipk. with the exception of the Institute of Administrative Science at the Punjab University where a special elective is offered. RBI asked faculties. In a situation where there is a lack of both theoretical and practical CSR knowledge and experience.org © Responsible Business Initiative 22 Ambreen Waheed . Since the idea is hardly a decade old. www. There are examples of conferences where CSR is made a topic for panel session. The study found no CSR department or unit in any institution within the sample and no faculty member carrying out primary research on CSR issues. pointing out the issues and fighting the injustice. As an extension of this study. Also.Academia Academia has a very important role in shaping the future Business Leaders in Pakistan. this study found no CSR courses being taught. There is a slow growth of the ‘CSR industry’ of consultant firms who are charging highly to corporations who want to ride the CSR bandwagon. detailing its nature and promoting and developing methodologies on how local businesses adopt and manage their CSR obligations would be a useful first step. Initiatives by Support Organizations in Pakistan Since the inception of the concept of CSR and the awareness. Frequent and open discussion defining and understanding CSR. .

EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION

- Media The Media plays a large role in consumer awareness and in creating demand for responsible behaviour from business on globally accepted parameters. In Pakistan the Tele Media as well as newspapers are often silent on these issues. We see a few programmes or interviews on some television channels, but the focus is often limited to elements like labour rights or environmental compliance. A few supplements on related topics like environmental reporting and CSR best practices mainly write about the odd corporate community project or environmental reports. Main CSR parameters are still missing from media. Organization
ACCA – Association Certified Accountants of Chartered

Initiative
Reporting Award Partnership for awareness Monitoring for child labour compliance Component in overall training programme Cleaner Technologies Productivity Criteria development NGO Certification Community work Initiative Research, awareness Capacity building, Standard/tools development, Strategy building Stakeholder Dialogue Training/Teaching International Linkages Impl. & Impact assessment Global CSR policy Tools development Codes development Research, Regulation Research projects Reporting Standards Triple Bottom Line project Cleaner production centres Compact signing

Focus
Environment European social standards ILO code, child labour, labour rights, Decent Work conditions Environment Corporate Philanthropy Corporate investment Environment Environment, Trade Social Compliance Philanthropy Corporate giving Focus CSR-10 pillars, Tripe Bottom Line, Global Responsible Leadership Initiative, Social auditing, GRI UN Global Compact, SA8000, UNCTAD/ISAR, AA1000, Accounting Standards Responsible Entrepreneurship Sustainable consumerism Responsible competitiveness Corporate Governance CSR Corporate Governance Environment, Global Compact Corporate transparency Efficiency, principles sustainable business

GTZ – German Technical Cooperation ILO – International Labour Organization LEAD-Pk – Leadership for Environment & Development – Pakistan NCP NPO PCI – Pakistan Compliance Initiative Pakistan Centre for Philanthropy Organization RBI – Responsible Business Initiative

SECP – Securities and Commission of Pakistan

Exchange

UNDP – United Nations Development Program UNCTAD – United Nations Conference on Trade & Development UNIDO – United Nations Development Organization Industrial

GCF – Global Compact Foundation Pakistan

GC principles

Table (5.2)

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5.3.

CSR in the Light of Islam

Islam favors fair and ethical business as the best source of income. It aims to promote mutual benefit in business interactions. Islam reinforces transparent and corruption free written contracts, acceptable working conditions, fair exchanges for both natural resources and human effort. It advocates “Tazkiyah”23, through active participation in this life and by behaving ethically in the midst of the tests of this dunia (world). Muslims prove their worth to Allah by upholding Huquq-ul-Ibad (Individual Rights) and care for society, and sharing wealth with poor and underprivileged. Actions and decisions are judged to be ethical depending on the intention of the individual. God is omniscient, and knows our intention completely and perfectly. Good intentions followed by good actions are considered as acts of worship. Halal (good) intentions 24 cannot make haram (bad) actions halal) . Islam allows an individual the freedom to believe and act however he/she desires, but not at the expense of accountability and justice. The Shariah (Islamic law) defines codes of social behaviour, and business ethics according to which today’s business investors can invest in socially responsible companies. One example of applying the Shariah in socially responsible investment is the Dow Jones Islamic Fund – IMANX – which invests in Shariah -compliant companies to encourage muslims seek a blend between financially rewarding and faith-compatible investment opportunities. Thus it makes a strong business case for companies in Pakistan to adopt Islamic business principles as part of a national compliance code and support a disclosure and verification system to validate performance against it. 6.0 6.1. IS THERE A CSR ROLE FOR GOVERNMENT? Examples from the World

Governments can play a unique and powerful role when it comes to corporate responsibility. It’s widely accepted that countries and governments that respect human rights have more open and transparent laws and financial systems, less corruption, a better-educated workforce, more stability and more security. In order to establish the global rules and regulations imposed by the international organisations, and making their businesses compliant to the international law and practices; Governments should pursue their traditional function of promoting trade and business through a proper policy. Supporting economic growth establishes a support for democracy. The strongest foundations for the stability, predictability, and security necessary for a sustainable business environment are democratic governments that protect human rights and labour rights. Government must work with companies to promote strong corporate values which promote legal and ethical behaviour as well as respect human rights and labour rights. Governments should support and facilitate public-private efforts to promote corporate responsibility bringing seemingly disparate groups together for serious efforts to address

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mutually recognized problems. The Voluntary Principles and Social Accountability International are two good examples of such efforts. Governments should support existing international standards and adopt them in their policies to delegate them to their local businesses making them readily competitive for the international market. Governments should help civil society, business, academics, NGO’s and unions to join hands together and craft credible solutions for their day to day problems and help them implement that throughout the business chain. Governments can promote the CSR agenda through legislation, media and create awards to encourage the organizations to adopt the changes. The importance of CSR for United Kingdom is depicted by the fact that they have a Minister for CSR. Stephen Timms, Minister for Corporate Social Responsibility, welcomed a social responsibility investment index saying, “Corporate Social Responsibility has a vital role to play in our society. It's living proof that economic and social goals do not have to be in conflict. And it can address some of the toughest challenges our society faces”. 6.2. Meanwhile, In Pakistan…

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“Role of Business in Society is the 21st century's most important and contentious public policy issue”. Simon Zadek CEO, AccountAbility

The conduct of for-profit businesses in Pakistan is regulated through comprehensive principal legislation in the form of the Companies Ordinance, 1994, overseen by a statutory body like the SECP, and business interests are represented by duly recognized representative bodies such as trade associations or chambers of commerce. This structured and supervised mechanism imparts strength to the concept of process integrity by instituting transparency and accountability. . SECP is reviewing corporate governance legislation and regulations that will bring into focus elements of corporate disclosure, shareholder liability and transparent accountability. NAB has unveiled a national anti-corruption strategy that lays down parameters for corporate compliance. The State Bank has outlined new regulatory frameworks on financial responsibility and probity. Internationally recognized guidelines such as SA8000 is getting support from Government In 2003 “Pakistan Compliance initiative” was launched with a draft national standard as a compliance standard approved by Government.

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There is no evidence of the various tenders. PNAC initiated awareness seminars on SA8000.The research could identify no work in progress on the development of CSR-related policies based on emerging global requirements to facilitate Pakistani companies in improving and expanding export and trade in international market. a universe of companies was identified. social compliance standards in 2003 at all major chambers of commerce in the Punjab. more than financial investment. respondents were identified within the subject organization through a signed letter of intent and baseline information acquired.org © Responsible Business Initiative 26 Ambreen Waheed . . in terms of policies and acceptance of the initiative. stratified and randomised into a representative cohort of about 100 companies.0 7. with due reference to current international CSR trends and issues and benchmarks. A detailed survey instrument was designed in keeping with the data requirements articulated in the TORs. A proposal was made by Ministry of Science and Technology to the EU for subsidizing SA800 certification among Pakistani suppliers and companies Corporations. an information pack was sent out with the survey instrument directly to individuals identified as respondents. It was administered to identify stakeholder respondents. A ten-level multi phased CSR performance grid was used to inform the survey instrument and a triangulation methodology was adopted for administering the survey involving a three-step process.rbipk. . however.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION - Compliance was declared a priority in the national trade policy. Attitude and Practice (KAP) format. GAPs .1. WHY THIS STUDY AND HOW Methodology Based on available data. First. Second. This instrument was based on the RBI 26 “Pillars of CSR” model within the context of the “4-Ps of CSR embeddedness” in a Knowledge. a trained data collector personally validated the response in discussion with the respondent. The methodology was kept adaptable and flexible www. little progress was seen at the practical level. This could help in promoting the management aspect of CSR. 7. Third. people and innovative CSR initiatives need Governments support. requests for proposal (RFP’s) or terms of reference (TOR’s) for government contracts advertised or initiated by its departments or agencies specifying any CSR-related parameters25 as criteria for selection.There is no confirmed information on any clearly articulated tax incentives or recognition from Government for good business practices and innovative initiatives like research & development for sustainable technologies.

Telecom & IT 10. Consumer product & services (misc. Cement & Building 7. Pharmaceuticals 4. Chemical & Fertilizer 6. The sectors include 1. Questionnaire 2 asked for detailed CSR information based on the KAP approach according to the RBI’s 10 parameters and global benchmarks. Tobacco 3.) A detailed literature review was conducted to inform the context and the approaches currently being followed and the type of organisational best practices relevant to Pakistan. if any. For each parameter a set of KAP questions was devised. 8. 10. Financial Institutions 8. Sugar & Food 11. Leather & Footwear 9. This led into a comprehensive super-set of questions. practices and performance was then split into three separate questionnaires. its strengths. including small and medium enterprise. Getting the initial details about the company. to be used in three steps. The first questionnaire served as an introduction between the questioner and the focal person from the organization. 7. locations and practices. the second questionnaire acted as a detailed evaluation on the state of corporate social responsibility. a mix of multinationals and national companies. The questionnaire was purposely kept very detailed to instigate respondents’ thinking.org © Responsible Business Initiative 27 Ambreen Waheed . Textile 2. 3. Corporate Governance Business and Ethical Principles Environmental Compliance Social Compliance Disclosure – Environmental and Social Product Integrity Corporate Giving & Community Investment Stake Holder Dialogue Financial Performance Supply Chain Security Questionnaire 1 sought general information about the respondent organization’s business.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION This research is specific to the current state of corporate social responsibility that is being practiced in Pakistan. human resources and systems. 2. The two-fold purpose was firstly to get detailed www. 5. which was shared with SECP for review. 4. Fuel & Energy 5. These parameters include: 1.rbipk. Questionnaires were dispatched to over 100 organizations from 10 sectors. It judged the organizations on the basis of several essential parameters of corporate social responsibility. 6. Questionnaire 3 asked for the CEO’s direct views on CSR and the success or failure of their various initiatives. 9. This set of questions for assessing respondents’ CSR awareness.

(see minutes attached.Code for ethics SA8000.process framework Brands . SAI. Recommendations were prepared for taking action toward a National CSR Strategy. indicators. Responses to all three questionnaires were cross linked and integrated for an In-depth qualitative analysis. GC.RBI AICSR Ethos Table (7.CSR management Transparency. of developing business and social standards. impediments and expectations and to have evidence-based qualitative data for a designing future strategy.Social standard RBI. BIC . criteria. The questionnaire served to also standardize the information exchange in line with a framework based on a global benchmark.GRI. The research findings and recommendations were presented for validation to the leaders of the participating companies and other major stakeholders through an Apex Consultation process. Transparency Accountability. GRI. issues. CSR and reporting indicators independently and as a team member with International organizations such as UNCTAD. Sample questionnaires are attached as appendices ( APPENDIX A).EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION understanding of the respondent’s CSR aspirations. These include guidelines.2) 8. Secondly. The consultative process created larger awareness and generated interest for actions. it was to facilitate participating organizations in understanding CSR and assist in a gap analysis of their respective CSR practices as a result of the question-answer process. A number of CSR experts from RBI’s international collaborating partners were also consulted to get a balanced approach while designing the three questionnaires.Resolutions on HR ICCR.FTSE4 good index Keidanren.APENDIX B) 7.COP GRI Reporting guideline ILO.org © Responsible Business Initiative 28 Ambreen Waheed . Benchmarks The RBI Pillars and the Perception model is derived from the consultant’s local and overseas experience.BP for Bribery Formatted: Font color: Black www.Quality standards Global Compact. fair trade criteria. FLO. OECD BIC. IBL.CoC FTSE. SAI. etc. benchmarks. FLO. Accountability.2. The Table (7.0 RESEARCH FINDINGS Measurement Frame work AA1000. ILO.PBSP27. REGION EU UK US Asia Pacific South Africa South America BENCHMARKS by UNCTAD.2) introduces some of the well recognized organizations from different regions who have pioneered and developed or are in the process of developing CSR tools and Benchmarks. CSM.rbipk. CCSR.FTSE4Good BSR. frameworks for facilitating and implementing CSR . Additional benchmarks being used in different regions were also reviewed to include all the various perspectives relating to the fast-evolving thinking on CSR.

Tobacco 3. Chemical & Fertilizer 6. Response Analysis Over 100 companies were invited to participate in this survey. remain outside of the CSR mainstream.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 8. SECP’s recent efforts indicate that it may be best placed to provide the leadership for achieving consensus on a National CSR Strategy developed through a consultative process and the active involvement of the corporate and citizens sectors. Leather & Footwear 9. They represented the following sectors: 1. it merits a place in a company’s core mission. Data Analysis Ongoing debate on how countries are gaining competitive advantage using CSR as a management tool reflects the importance this approach has for companies continuously seeking the next formula for success.rbipk. This research found “quality” and “customer satisfaction” as aspiration values occurring frequently in corporate statements. Results of this study.1.org © Responsible Business Initiative 29 Ambreen Waheed . CSR thinking is still confined to a select few who often believe philanthropy to be responsibility. 8. owed no doubt to the consumer demand for such attitudes from business and the realization that they affect the bottom-line. Fuel & Energy 5.2. There is evidence that national strategies are being developed to facilitate corporations overcome impediments that prevent them fulfilling their corporate social responsibilities. Telecom & IT www. Financial Institutions 8. perhaps as an indication of the changing paradigm. If CSR is to be regarded as an integral part of business decision–making. From the findings of this research what appears to be a priority is a clear and realistic appreciation of the business case for CSR and the systemic advantages it bestows on the day to day running of a company. discussed below in detail show that Pakistani corporations. vision and value statements. Otherwise others in the region would benefit from the gains in competitive advantage. and the patronage of government ministries directly working for trade promotion. Textile 2. succinctly related to its business goals. Cement & Building 7. barring a handful of enterprises. CSR leaders responding to queries in connection with this research stress that Pakistani businesses must learn fast to ride the CSR bandwagon. Likewise. Pharmaceuticals 4. mission or vision statements of companies aspiring for a “socially responsible” image frequently refer to going “beyond mere profit” or “creating social value for stakeholders”.

Based on our frequent interaction with companies. Multinational. Consumer product & services (misc. Sugar & Food 11. we found the following factors responsible for lack of participation: 1. Lack of Awareness: For a majority of respondent organizations CSR is a new and alien concept and it appears there is significant resistance towards adopting CSR best practices particularly among family owned businesses. www.org © Responsible Business Initiative 30 Ambreen Waheed .rbipk.) Legal requirement or Customer Image drives CSR Consumer & Services Sugar &Food Telecom Leather & Footwear Financial Institutions Cement & Building Chemical & Fertilizer Fuel & Energy Pharmaceuticals Tobacco Textile 0 1 2 3 4 5 6 7 8 9 10 Response % Fig (8. and aspiring to major CSR benchmarks increases this feeling of vulnerability. None of the pharmaceutical companies responded to our call. Lack of Interest: The general perception elicited from respondents about research is that it is an academic exercise which has no direct benefit to their business. fuel and energy. 2. Respondents confirm that there is a perceived apprehension of “getting exposed” with regard to their relatively low compliance with even existing mandatory requirements.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 10. about 35% responded to the survey questionnaire. These perceptions seem to be based on respondents’ experience of previous research surveys that have a tendency for ending up in reports and research papers with limited practical outcome.2) Of the companies invited to participate. Respondents overwhelmingly said that they consider surveys as a mere waste of time28. and financial institutions showed 70% response which is so far the best percentage.

In the case of this research. they expressed a reluctance to share anything in writing. In a small number of respondent companies assigned personnel went for leave or left their jobs without handing over the task. www. Lack of Commitment: In a number of cases the research team faced a general gap in commitment from people to whom the task of completing the questionnaire was assigned. Among the respondents there appeared to be no considered effort by management to invest specifically in CSR-led information systems that make data available for decision-making and strategy. It was clear that in the absence of clear demarcation of responsibility for CSR assignments within the corporate structure. Respondents referred to incidences of misuse of corporate information by competitors and others. 8. RBI team members personally visited corporations and were always available on the telephone phone to backstop the process of completing the questionnaires. knowledge or interest in the study. 7. Lack of Leadership: Like all other innovations. Lack of Learning: Most of the companies who agreed to participate in the survey expressed difficulty in responding to the questionnaire because either the questions on CSR were not understood within the context of business or specific data were not available in a reportable form. only a small number were able to commit personal time to oversee the collection or validation of their respective company data. 4. Lack of Coordination: In a number of respondent companies. Lack of Documentation: Lack of documented information and absence of proper systems to generate decision data about company’s policies and practices invariably hinders companies in participating actively in CSR initiatives. RBI had to recheck and validate a number of such data instruments.org © Responsible Business Initiative 31 Ambreen Waheed . At times the task was handed down to executives who seemed to have limited time. Lack of Trust: There seems to be no culture yet of corporate disclosure. there was insufficient coordination between departments as well as layers of top and middle management. the feedback process was very time-consuming. the success of CSR activities too depends to a large measure on strong. despite top managements interest. and in the odd case the study questionnaire got lost between departments.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 3. Respondents who took this as a learning opportunity later conveyed how the process helped them build awareness on CSR precepts. even though invitation letters from the Chairman SECP were addressed to CEOs. A general paucity of the right CSR knowledge and skills at the management or supervisory tier to which the task was assigned also may have contributed to the overall quality of the questionnaire in a small number of responses. 6.rbipk. and while a number of the respondents were ready to verbally communicate their information with the research team. visionary leadership. 5. indicating a general lack of trust even for research that may ultimately prove beneficial to their companies.

3.org © Responsible Business Initiative 32 Ambreen Waheed . TI 0.1) From the responses. Sectors 1 participating in the Textil Suga Consumer Cemen Tobacc Service Oil and Chemical Fig (9. it is evident that companies from consumer products and oil & gas sectors have a greater awareness about current CSR concepts. The responses are compared to the globally accepted parameters based on interaction with Global CSR initiatives on a scale of 1 to 5. International exposure creates better understanding of precepts 4. Lack of Stability: The research team were unable to get timely feedback from a number of highly committed corporate leaders and company managements because of the transitional process underway within their companies due to re-structuring. 9. Each participating company was to define CSR based on their own perception. Each of the parameters was given weights and ranking based on its relevance to the CSR concept. This is perhaps because of international exposure and consumer pressure in the case of the former and relatively stringent www.0 1. knowledge and understanding of CSR. 3. 1 to FI N A N CI T 1.rbipk. Average understanding of definition of CSR on a scale 2. Before a discussion of the different key factors for CSR awareness and implementation it is important to get a general sense of perception of CSR among corporations in different Industrial sectors in Pakistan. privatization or mergers and acquisitions. GENERAL PERFORMANCE Perception 1. 2. C E M E FI N A N CI Financia Footwea Teleco OI L & G A F O O T W S U G T O B A C C H E MI C T E L E C C O N S U M S E R VI C 0. E X 1.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 9.

management. sugar.rbipk. www. Pakistani companies have an unfocussed perception of business ethical principles. Their relatively fuzzy perception of CSR means they typically do not have well formed initiatives to develop CSR strategies in their organizations. ZThe service and the financial sector show moderate awareness towards principles of CSR. The cement. Similarly environmental and social commitment towards internal factors like employees. And quite understandably.org © Responsible Business Initiative 33 Ambreen Waheed . and cement industry typically lack tailored policies to curb corruption. Responses reveal that certain companies feel their philanthropic endeavours are CSR initiatives. On average companies are shy of admitting their pursuit towards business and financial benefits for the fear of being perceived as not being “socially responsible”. these companies reveal an unmistakable focus on marketing and business-development as a derivative of CSR interventions. documenting and implementing CSR policies and code of business ethics. chemicals and telecommunication sectors still appear to be lagging behind in assimilating CSR precepts and their importance to their business. Data provided by respondent companies in these sectors show that companies are unable to relate their business practices and community interface with CSR. The fuel & energy sector acknowledged corporate governance. nor is there widespread evidence of any substantial constructive activity to develop a CSR infrastructure in these organizations. Textile. but they are more of philanthropic endeavours than activities to contribute to actual CSR spirit. Their detailed responses reveal that they are either now starting to focus on policies and procedures for implementing CSR or they are developing strategies and frameworks for such initiatives. However. business ethical principles and product integrity as the parameters of primary importance in CSR. workplace environment is not reflected in many companies’ definition of CSR. footwear. Responses of certain companies also show that they do have programs to contribute to the communities. Few have certain bribery control policies which they think encompass the complete business ethical principles red book. footwear manufacturing. which can be a possible setback for quality in business. In any case companies in this category appear to have accepted that CSR is here to stay and they now show evidence of being in the process of developing.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION legislation and regulatory requirements for the latter. company responses show a general lack of awareness about the emerging global prospective of CSR.

and telecommunication sectors. most are engaged in CSR as a minimal compliance requirement or in response to specific client demand. waste minimization. They also show evidence of encouraging compliance to CSR standards among their subcontractors and suppliers. The textile. CSR Practices Less than 50% of respondents fall into the “Compliance” category. Amongst national companies. They often have projects which contribute to the community and environment. some of which are in place for decades. These may often be companies who have traditionally supported community projects but have only recently been introduced to CSR as an umbrella term that implies community giving. Often these companies find themselves in the process learning what CSR actually means. and generally good reporting structures. In terms of adopting company-wide CSR policies or strategically implementing CSR. leather & footwear. They show well-formulated business ethics policies. They are seen reviewing their philanthropic activities and evaluating their community impact within their renewed CSR orientation. and can be termed as being in the “Awareness” stage.g. These companies reveal a desire for developing their CSR strategies and are in the process of doing so. This is primarily because of global policy uniformity among international businesses. as evidence of their commitment to CSR. In addition. www. this study finds only multinationals or large nationals with international affiliations actively engaged at the practical level. e. Some are in the process of customizing their head office policies to Pakistan’s local environment. a stage where a company exhibits a general awareness of CSR principles. 3. Most are contemplating or actually implementing measures to improve their CSR impact. cement & building. objectives and benefits. Interpreted within the current paradigm. CSR Policy Of the companies providing data. However. companies do declare philanthropic projects. there are companies who have just begun adverting to CSR. These companies exhibit a focus on internal stakeholders. regard for stakeholders. recycling and pollution prevention. Companies at this stage show that they are becoming more conscious of environmental and social impact issues arising as a result of their industrial activity. financial. oil & gas and those operating in the service sector are in the early stage of CSR development.rbipk. Often it is possible to draw the conclusion that CSR activity in a company is involuntary and as such driven not by corporate values but by necessity. those belonging to the chemicals. These companies typically take interest in training their management about CSR and are found focusing on developing CSR policies. all appear at this stage of CSR development. and why it is important for their management practice and corporate image.org © Responsible Business Initiative 34 Ambreen Waheed . designed to bring overall conformity with head offices overseas. these otherwise admirable acts do not make a company fall in to the CSR compliant category.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 2.

www. This research could not find widespread evidence of reliable and verifiable measurement processes to gauge these impacts. and process.and product integrity. disclosure. or stakeholder feedback mechanisms that can help improve on or change the nature of these activities.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Multinational companies in the fuel & energy. The 4 P’s The adoption of CSR starts with clear understanding and right perception of Global CSR debate. The success of a CSR program and initiatives needs to be measured to improve the ongoing CSR practices and projects. 4. social and environmental compliances. knowing what actually Corporate Social responsibility really means and why it is important to adopt CSR practices. and consumer sectors appear to be implementing CSR policies to a relatively greater extent as compared to their peers. such as corporate governance. Having clear and related policies is not enough for a successful CSR program. disclosure and other CSR parameters.org © Responsible Business Initiative 35 Ambreen Waheed . Once a company has a clear concept the first step is to the show commitment and have CSR reflected in their mission and vision so it progress to the stage of developing CSR policies to guide management in implementing them and to create awareness among employees to adopt these policies. The third and most important stage is the “practice“ of implementing well established systems to follow the policies for integrity.rbipk. Very few companies at present are seen to be at the fourth stage where they are able to reap business benefits of their efforts. implementing employee-related best practices and community support programs. marketing practices. anti-corruption measures. They provide indications of addressing environment-related issues. CSR Performance This study can state with reasonable confidence that only a handful of respondent companies seem to be concerned about the long term impact of their CSR policies. governance. thus the performance needs to be obvious and transparent.

Consumer goods manufacturing multinationals are in the middle section of the figure which indicates better perception. policy. telecom and financial sectors are in the overlapping areas between Perception and Policy which indicates that they are in a transition between the two stages. It is indicative of the fact that these companies have developed policies to bring CSR in their organizational infrastructure and are currently struggling to deploy them.org © Responsible Business Initiative 36 Ambreen Waheed . Tobacco is weak in perception but has a place in the performance circle as it has tried to evaluate interventions through social reporting and attempts to measure the impact of their interventions through stakeholder Involvement and assessment.rbipk. Companies in technology and services sector fall in the overlapping region between Policy and Practice. They have developed a perception about CSR and are currently contemplating to develop a CSR Policy.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Most Companies are still in the initial Policy Development stage Perception Knowledge and understanding of CSR Performance Measuring Impact company competitive edge Policy Developing a CSR policy Practice CSR policies implemented to improve i ti l Financial Footwear Telecom Textile Sugar Consumer Cement Tobacco Services Fuel & Energy Chemicals Technology Fig (9. www. policies and some practices in place and trying to gauge their performance. The Figure maps the sectors-wise general state of CSR on perception. Companies in textile. Participating sectors have been colour-coded and placed in overlapping bubbles which represent different states of CSR the “4-Ps29 of CSR embeddedness.2) illustrates the stages in which different organizations participating in this study are seen in. practice and performance.2) The Fig (9.

The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. Each parameter was further assessed against globally acknowledged standards. It acts as the umbrella for all CSR activities and ensures that the corporation is directed.rbipk. Corporate Government Corporate Governance is the most important pillar of CSR. attitude and perceptions (KAP) related to each “parameter”. validated through existing codes. management. In today’s fast paced corporate and industrial growth. www.1. shareholders and other relevant stakeholders within a legal and regulatory framework. transparency and fairness.org © Responsible Business Initiative 37 Ambreen Waheed .0 STATE OF CSR RBI’s “CSR Pillars” were used to benchmark the state of CSR in Pakistan. management and the board of directors. rules. as well as learning through interaction with International business and CSR organizations. It is the process by which company objectives are established. Corporate governance is concerned with the relationships and responsibilities between the board. evaluation tools. RBI’s CG BE EC SC DR EP CC SH FP SS CSR Pillars Corporate Governance Business Ethical Principles Environmental Compliance Social Compliance Disclosure & Reporting Product Integrity Giving & Community Investment Stakeholder involvement Financial Performance Supply Chain Security 10. Corporate governance is commonly referred to as a system by which organizations are directed and controlled. administered or controlled fairly by its shareholders.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 10. achieved and monitored. standard operating procedures (SOPs) and implementation. Questions gauged company knowledge. there is a global appreciation of the corporate governance principles of responsibility. Corporate Governance is concerned with holding the balance between economic and social goals and between individual and communal goals. SECP already has in place a Code of Corporate Governance that all listed companies must comply with and report in the mandatory annual report. policy. accountability. evolving CSR definitions and indicators.

More than 50% of the respondents gave corporate governance the highest priority as a CSR measure. care and diligence with proper regard for the technical and professional standards expected. The financial sector assigned topmost priority to corporate governance and business ethics principles. policies and procedures in place. Business ethical principles provide a framework of behaviour to the professional. Consumer products and chemical manufacturing companies showed a stronger conceptual understanding of corporate governance along with the necessary infrastructure.1) This research shows that companies have a fair understanding of the need to conform to the corporate governance parameter in order to become responsible.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION SECP’s Code implemented fairly uniformly by listed companies 5 4 Median on 1-5 scale 3 2 State of Corporate Governance on a scale of 1-5 1 Financial Oil and gas Consumer Products Services Telecom Chemicals Tobacco Outlier Participating Sectors Footwear Sugar Cement Textile 0 Fig (10. They showed confidence that strong corporate governance policy helps in beating corruption and as a result improves business as well as image.rbipk. display necessary competence to fulfil assigned tasks and should carry out delegated professional work with due skill. Corporate governance and business ethics principles go hand in hand in any professional setting. More than 50% of the respondents gave corporate governance the highest priority as a CSR measure.org © Responsible Business Initiative 38 Ambreen Waheed . One should strive for objectivity in all business judgments. www. documentation. fair dealing and truthfulness should be shown by a professional with commitment uncorrupted by self-interest. This research shows that companies do have a clear understanding of the need to conform to this particular CSR parameter. Integrity in all professional and business relations.

promoting. vision or codes of conduct. to market exit and insolvency. The integrity of corporations. However. Thus research appraised companies on two key parameters: • • Existing policy that penalizes workers in case of unethical behaviour Existing policy that rewards workers on abstinence from unethical behaviour In the following graph. The system of recruiting. this reflects lack of importance given to implementation of ethical values or codes mentioned in their mission.2. Most respondents to the questionnaire include ethical behaviour as part of their general code of conduct. Corruption is against the spirit of competition. in entrepreneurship.from their very beginnings.org © Responsible Business Initiative 39 Ambreen Waheed . company law. Shown as “0” on the scale. compensating and publicly honouring employees all can be designed to promote CSR. this study did not find an instance where a company acknowledges an employee’s individual contribution towards maintaining an ethical environment. through their governance structures. hiring. Companies generally understand that employees tend to engage in behaviour that is rewarded and avoid behaviour that is penalized. Business Ethics Principles Government and corporate corruption cost billions of dollars throughout the world that could have been used to improve the lives of countless people. Almost a third of the respondents were hesitant to share information on their initiatives or practices in ethical behaviour. companies were rated on a scale of 1 to 5. financial institutions and markets is particularly central to the health of our economies and their stability. www. 10.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Conclusively. Our interaction with companies in different sectors allowed us to evaluate that many companies do not have a corporate governance strategy. privatization. rather they need direction to fit them into CSR definition. Business efficiency improves when conducted in an environment of fair competition supporting stake holder’s confidence. Corporate Governance looks at the institutional and policy framework for corporations .rbipk.

all respondents in this category are multinational companies with wellformulated organizational structure and policies in place. and cement industry typically lack tailored policies to curb corruption. and environment considerations a priority in its business decision-making and processes. Environmental Compliance Environmental compliance means that the organization makes health. safety. It also means that a company shares learning on the impact of its process to outside parties and assures by the management of its waste materials that it is doing its best to safeguard the environment and protect life. A few do commit to bribery control policies which they think encompass the complete business ethical principles.org © Responsible Business Initiative 40 Ambreen Waheed . such as bribery or other misdemeanours. The research findings confirm that national companies still do not have a clear enough perception of ethical principles relevant to their respective processes. which can be a possible setback for quality in business. 20% of the respondents have penalties for unethical behaviour.rbipk. rated 2 show that they neither have an effective business ethics policy in place to motivate employees to abstain from unethical behaviour nor any incentive to induce practice of ethical behaviour. www. Only 7% companies declare a clearly articulated code of behaviour for employees that aim to promote an ethical work environment.3. These commit to a verbal declaration that exhorts avoidance of unethical behaviour in the organization. 10. This implies that there are mechanisms in place to promptly report any hazards or incidents that put the environment or life at risk to authorities or other stakeholders.2) Formatted: Font: Not Bold 27% of the companies. along with any recommended protective measures. footwear. Textile. Not surprisingly.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Ethics not linked to CSR implementation in company 5 Practices in company policy & Practices Importance given to ethical business i 4 3 2 1 0 Company attitudes clustered by response ? Respondents not fnamed Fig (10.

Three aspects are of incremental importance in safety reporting: industrial safety. Employee involvement and training is necessary to actively manage and minimise health and safety risks. the darkest shade reflects that a company has future plans for improving their health & safety. and caring about environment. There is a need for changing behaviour through briefings. training and appropriate tools. The light shade reflects some awareness raising trainings and initiatives. and they are briefed on all potential hazards and risks in the workplace. Health and Safety performance should be measured in terms of accident frequency and severity. It is the responsibility of the management to make sure they have proper policies and that their work force is familiar with health and safety policies.3) maps the measures taken by corporations in different sectors to improve their Environmental Compliance.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION An organization's aim is to Identify assesses. high priority should be assigned to raising health and safety awareness by providing appropriate training to the workers and employees and raising their consciousness. rank and control all health and safety risks for their employees and contractor staff.rbipk. improvement on policies and www. instructions. personal safety and time lost.3) The Fig (10.org © Responsible Business Initiative 41 Ambreen Waheed . Compliance vision is predominantly situational not strategic Fig (10. Generally human error is the primary cause of workrelated accidents and incidents. environmental training. the darker shade shows that a company has policies relating to environmental and health & safety compliance.

EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION implementation.rbipk.4. employees of a company too have demands on a company to be treated in a socially responsible way. 30% said they give consideration to energy-efficient and environmentally friendly products while choosing office appliances or raw material. Health and Safety performance should be measured in terms of accident frequency and severity. health and safety training procedures and proper record keeping mechanism for documenting frequency and causes of accident for future analysis and risk management. but also their employer’s social responsibility. Social Compliance Like shareholders. One study shows that more than ninety percent of MBAs in the relevant sample were willing to forgo financial benefits to work for firms with better reputations for corporate social responsibility. The research identifies very low focus on waste management. These corporations owe these measures to international consortiums and petroleum products regulatory authorities’ laws pressing upon them. It is becoming evident that a corporation’s reputation for social responsibility can attract and retain better quality employees. although their existing departments are handling these issues. In developed countries. energy efficiency or an emphasis on finding innovative ways for employing green energy and sustainable technologies. Majority of the respondents in our survey do not provide or support any organized environmental awareness training.31 www. Protective gears available for workers working with hazardous chemicals. As a best practice work-related accidents should be recorded in a central database and periodically analyzed. Finally the opaque shade shows that the company feels the importance of environment risks and have employed personal specially to look after environmental issues and initiatives. A uniform system should be employed for reporting accident figures and the figures published for future reference and preventive tactics. recycling. 10.org © Responsible Business Initiative 42 Ambreen Waheed . Future improvement for current projects Personnel to support train and manage employees for environmental compliance. employees are seeking contracts that not only define wages and working conditions. Only 25% of the respondents were seen to have taken an initiative towards improving environmental conditions. Only 12% said they are recycling a proportion of their waste material. This research reflects that fuel and energy sector and multinational companies have: • • • • Environment. Multinational chemical manufacturing companies also display a competent level of environmental compliance and health and safety management of their employees.30 Employees derive satisfaction from being associated with responsible firms. health and safety and accident management policies in place.

org © Responsible Business Initiative 43 Ambreen Waheed . Social compliance being recognized as the backbone to corporate citizenship. growth potential. along with the mandatory ones on wages and working conditions. procedures and practices that relate to the impact of the organization on the society in general and the workplace in particular. or retirement.rbipk. and job security provisions. The questionnaire for this research included a number of parameters to determine the state of social compliance in the respondent companies. sick leave and special leave issues. unemployment. A corporation’s reputation for social responsibility can attract and retain employees. Like shareholders. allowances and benefits. human resource development. rest breaks and leave arrangements. New approaches to cooperation between workers and employers at enterprise level are of particular importance with the purpose of encouraging genuine bilateral dialogue. including annual leave. and the absence of child labour. employees should insist on socially responsible behaviour from employers both by contract and by choice of work. work illness. knowledge enhancement. www.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION This study finds that none of the respondent companies include a reference to CSR in their employee contracts. including provisions for social and human capital development through shared learning. hours of work. employee benefits. All companies sampled agreed that the employee is the backbone of their organization. human capacity building and opportunities for future growth. Social compliance encompasses the introduction of norms and implementation of policies to ensure basic rights like equal treatment and non-discrimination. over time work. Social security includes protection against the effects of economic and social hardship resulting from a reduction in earnings due to work accidents. Workplace security. 100% Companies accept that they can attract best human capital by providing employee rights. involves policies. and a safe and healthy workplace. wage and work hour’s related issues. abolition of child labour. the absence of forced labour. satisfied and healthy employees are invaluable assets. Safe working conditions including minimum wages and above minimum wage issues. But less evidence is found for practice relating to systematic approach and enabling environment for flexibility and employee knowledge enhancement. This indicates a significant knowledge gap that requires immediate attention. labour welfare and social protection and the right for the employees to organize as unions and bargain collectively are important aspects that come under the bracket of social compliance. Employee’s contracts should have clauses on responsible behaviour. Working environment includes protection against the effect of hazards in the work place involving issues of work safety as well as protection from work related diseases and illness. Pakistan’s industry has lagged behind the transformation of the economy and must now ‘catch up’ if they are to play a meaningful role in national and enterprise development. and that competent.

Except for one company. The provision of paid leave can help to protect children’s health and development by enabling financially constrained mothers to remain at home for longer period following childbirth. Primary benefit given to women in all sectors of Pakistan industry is the maternity leave. as stipulated under law. These policies are made to facilitate women's work outside the home and help reconcile work and family life by protecting and promoting the well-being of children while their parents are in the labour force. Maternity rights affect the time a mother spends out of the labour force after a birth and the probability that a mother returns to her pre-birth employer rather than starting a new job. The goals of maternity leave policies are to support family work and child rearing and to create an incentive for women not to leave the labour force when children are very young.org © Responsible Business Initiative 44 Ambreen Waheed . Employees unions are typically discouraged by companies who do not cater to the international market. Multinationals allow workers to form works councils and unions.rbipk. Among the major employee benefits provided by our participating organizations are: annual leave and medical insurance and annual bonus and sports and recreation. which allow for negotiating worker demands with the management. Benefits like subsidized food and transport facilities are uncommon. It can be concluded that it is not the norm in Pakistani companies to give paternal leave. On average. stock options are not offered to employees. www. There is one company in the financial sector that gives female employees 130 days paid leave 32 for Iddat . which is commendable. respondent companies are willing to let a mother have 2 months paid leave. The question about paternity leave grant was avoided by companies in general. This can serve as an indicator of best practices being followed employed by companies in Pakistan with a vision to facilitate workforce and to improve their overall performance and commitment.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Our survey questionnaire consisted of different parameters which help in determining the state of social compliance in different companies in Pakistan.

and support a positive overall experience.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Benefits follow minimal legal requirements or leader’s Financial Textile Cement Oil & Gas Footwear Sugar Tobacco Chemicals Telecom Consumer Services Annual leave Insurance Free Meals Free transport Recreation etc.org © Responsible Business Initiative 45 Ambreen Waheed . Management and staff should understand that having a grievance procedure provides a process for resolving conflicts and can help facilitate the effective use of resources. Bonus/profits Stock options Maternity leave Paternity leave x x x x x x x X x x x x x x x x x x x x x x x x x x Fig (10. Conflict creates an environment of tension and if not properly managed can harm morale and productivity. Companies rely on verbal employee-management interactions to deal with conflicts and problems. They can elect their representative independently and have the right to voice their concerns. Multinational companies www. According to the responses received about 50% of the companies do not approve of employees joining unions. There are no complaint document management systems and no history is kept to review on an annual basis. Multinational companies allow employees to have work councils and unions which protect their rights and negotiate worker demands with the management. Half of the respondent companies do not even support such in-house representative structures.rbipk. unjust or unreasonable. There is always the potential for conflict to arise in a workplace. Employees unions are not allowed by local companies or even by exporting companies whose international buyers insist unions or works councils as a major CSR compliance issue. 80% of the companies in Pakistan lack articulate grievance procedures. and associate unions with strikes and coercive practices. maintain good working relationships. companies seem to favour works councils and often opt for “workers’ committees” to represent workers for issues and complaints to management for solution.4) wrefCompanies do not focus on areas like subsidized food and transport facilities. However. A work related grievance might flow from any aspect of a staff member's work experience that they believe to be unfair. to improve working conditions.

5.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION operating in the region have strong.org © Responsible Business Initiative 46 Ambreen Waheed . www. In general. None of the organizations have mentioned any benefits obtained from reporting.rbipk. none of the sectors is releasing reports on a voluntary basis. however. Reporting being done is often focused on lighter issues and contains factual information concerning the organization. but the quality of information presented is still quite elementary compared to global standards. The sectors like Financial and Textile are doing this as per requirements by government or their customers. of which one is based on the GRI reporting format. Like Business Principles. even as 6% of the respondents have already published CSR reports. interest among corporations for reporting environmental initiatives has grown due to ACCA-WWF Environmental Reporting Award. Disclosure and Reporting Reports are used as means of management (creating and documenting systems). Cross-checking company procedures allowed us to realize that reporting is not being given substantial importance in any sector in Pakistan. 20% of the respondents have in the past disclosed environmental and social initiatives either in their annual report or in newsletters or company supplements. Moreover there is a need for definitions which define e. Often there is little correlation between CSR and other business variables highlighted in company annual reports. The scope of CSR information in the financial report should cover information which is material to the economic performance of the company. Make clear and timely communication a priority. well-maintained grievance procedures. In recent years.g. For most of the organizations. The main benefits that come out as a result of maintaining a reporting system is the ease of comparability of the organization’s social and environment al performance. it was given a priority value greater than 6 on a scale of 1 to 16 where 1 was the highest priority and 16 the lowest. environmental costs and investments and a need to develop appropriate verification standards for CSR information. 10. A grievance procedure should be part of a larger effort to enhance communication. Most companies did not share detailed information to enable us to assess the kind of support documents and procedures in place to ensure effective response of worker issues. reports also reduce conformance cost by providing quick views on operational procedures and their outcomes and also to monitor ongoing processes. An effective procedure operates as an early warning system and alerts management to potential problems before they escalate. The research showed that reporting is not given a high priority in adaptation of CSR by any sector. In order to properly capture CSR-related financial risks there is a need for a cross disciplinary approach including both the financial and the CSR manager of the company.

www.Harmful materials are not being used in the process (chemicals. Product finishing should be to ensure that it is not harmful for end user. Financial institutions. having Product Integrity means a company ensures that the product reaching the consumer is the same as it was promised in the advertisements and other commitment statements like quality standards etc. An organization needs to pay attention to the following issues regarding product integrity. It is an outcome of the supply chain monitoring as well as in-house quality systems. leather and technology sector companies in Pakistan are run as family businesses rather than publicly owned companies. It should be at par with modern safety and production standards. (chemicals that cause allergic or corrosive reactions on human body. including the priority assigned to it as a part of the CSR strategy by each company and the emphasis on Product Integrity upon purchase of raw material.Product being produced should be biodegradable. even as there is an abiding interest in quality management systems and certification in all sectors.rbipk.Environment is not being damaged in any way during the production process (effluents. cement. . At present private enterprises are not mandated by law to publicly declare such information. We found that there is a serious lack of appreciation regarding this factor.workers are not being pressurized in any way during the production process (forced labour.6. Respondents were not aware of any specific initiative on part of government to enforce policies regarding product integrity. If it is not biodegradable then what mechanisms are available to dispose of it after use. emissions. . Participants in the survey did not show much interest in this section of the questionnaire which is an indication that companies lack awareness in this area. Product Integrity Product integrity is actually a part of product quality. . whistleblowers) . Textile.Channels of research should be well-developed with personnel implying a role of improving standards of product not only in terms of quality but also increased health and safety standards. It encompasses a wide variety of issues like environmental and social impacts of the production process. The emphasis of the company on ethical advertising was also added to the criteria for evaluation of Product Integrity. pollution) . In a business sense. A contributing factor ascertained by the research to this state of affairs may be the relatively weak consumer lobby in the country.There should be no harmful effects of the product.Technology being employed should be sustainable and efficient. products that deteriorate human health and quality of life) . The research monitored Product Integrity through several ways. 10.org © Responsible Business Initiative 47 Ambreen Waheed . machinery that is risking production crews’ life or health) .EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Apprehension of benefit-seeking outsiders is another factor that seems to compel companies to avoid complete disclosure financial information in their reports.

EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION The Fig (10. these are mostly one-off activities. Fig (10-6) Across all products. with companies allocating resources based on their own perceptions. The sectors not shown in this chart lacks proof of efforts made for the integrity of their products Awareness linked to market image and customer sensitivity 8 7 6 5 4 3 2 1 Textile Fuel & Energy Tobacco Telecom Services Cement Financial .rbipk. Corporate Giving or Community Investment Companies clearly give a lot of importance to community philanthropy and show a trend of significant spending towards services and amenities to communities around their geographical boundaries.7. Respondents reveal that the typical motivation stems from a desire for competitive advantage and positive public relations impact. A Few companies in the oil & gas sector are trying to improve their product’s negative environmental impact. Financial sector has also shown responsibility towards fair trade. Use of environmental labels on products. including multinationals. marketing needs or following peers or competitors. www. In this regard ministry of health has also made an effort to prohibit sale of tobacco to minors and to clearly state the harmful effects of tobacco on the label. proper labelling of financial products and ethical marketing procedures.org © Responsible Business Initiative 48 Ambreen Waheed . However. Corporate giving seems to be equated with good corporate citizenship by a significant number of companies. Tobacco sector showed commitment that their policy is to provide their customers with all the necessary information to help them choose the product that is right for them.6) shows the priorities ((1-10) assigned to Product Integrity by organizations in different sectors. avoiding confusion with labels and labelling statements should remain a priority for all companies. clear mentioning of product ingredients and possible side effects should be mentioned clearly on each product label. 10.

and appears as a key area for government policy direction. these efforts are independent of a considered strategy that reflects the felt needs of the communities concerned. www. hospital set-ups. Giving follows High Visibility & services that attract attention 6% 0% Education Technology Water & Sanitation Environment aw areness Sports Capacity building Health 28% 21% 6% 9% 6% 12% 12% Micro credit Enterprise Development Citizen Rights Fig (10.7) Education.7) below shows the various community initiatives disclosed by the respondent companies. scholarships. We are part of society and have a responsi1bility to the world in which we operate. This is not a matter of charity but of investment. health and water & sanitation are the most frequently addressed areas in community initiatives. health camps. The Fig (10.rbipk. Yet most often. The potential for leveraging the enormous potential of corporate sector to alleviate poverty in specific terms is not generally recognized.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION A number of companies reflect a readiness to actively contribute towards the welfare of poor communities around them by providing education.org © Responsible Business Initiative 49 Ambreen Waheed . Organization-run schools. health services. the progress of the communities in which we work. Also the most important areas for sustainable development like technology research and human capacity building have the lowest priority. However. educational trusts. this study did not encounter any initiative being taken by the corporate sector to improve citizen rights or generally redress environmental deterioration. among other things. tube wells and tankers to provide drinking water and sanitation projects are a few examples of this community investment activity. and technology access. free dispensaries. because our continued success 33 depends on. primary education schemes. This appears as a gap in strategic planning the industrial sector in relation to CSR precepts.

Fig (10. which shows that Stakeholder Involvement is prioritized by chemical manufacturing. The Fig(10. customers. www.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 10. the study found no large-scale evidence of any systems and procedures installed by companies to elicit stakeholder feedback for CSR related activities. mechanisms are being put in place for meaningful corporate interaction with stakeholders. The Fig (10. Quite clearly the service and telecommunication industry puts customer communication quite high as a priority and show that they have policies and practices to satisfy them. corporations are generally beginning to realize the importance of the stakeholder perspective and are becoming clear about their primary and secondary stakeholders. They demonstrate the existence of varying degrees of reporting mechanisms and communication channels with relevant stakeholders.8. employees. Increasingly. In Pakistan.1) indicates a colour-coded comparison.8. Apart from this one finding.8. there seems little organized interaction between the five key stakeholders. consumer products and the service sectors. In general. buyers.1) This research reveals a low understanding of the importance of Stakeholder Involvement to a company’s social responsibility. namely the board. Likewise. The reason for this appears to be the perceived dangers associated with the product in question with regard to the environment. and relatively high media sensitivity. All over the world.org © Responsible Business Initiative 50 Ambreen Waheed . telecommunications. however.rbipk.8. Another interesting finding is the importance of stakeholders by corporations in general. companies still seem to be relatively aloof from their stakeholders and need to understand the importance of stakeholder dialogue as the basis of CSR initiatives. This study found evidence of stakeholder interaction in the chemical and tobacco sectors with specific reference to the environment. companies generally reveal insufficient understanding of the role of the stakeholder in their social interface. and the community at large. Stakeholder Involvement CSR implementation is not possible in its essence without stakeholder involvement.2) shows stakeholders order of priority given to them by the corporations.

that is.rbipk.8. Supply Chain Security As stakeholders take a growing interest in corporate social responsibility. many companies are finding that they not only are responsible for their own CSR performance. but also for the CSR performance of the companies upstream and downstream.org © Responsible Business Initiative 51 Ambreen Waheed . Buyert C Ac Com Media Supplie Emp Fig (10. www.2) 10. a company’s suppliers as well as its customers and even its customers’ customers.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION a Cus Boar Go Com Mgt Emp Stock Env.9.

improve and communicate their company's labour.10. CSR helps companies develop new competencies because it engages employees. Median on 1-5 scale 1. and crises. sound human rights practices and treat workers fairly with dignity and respect.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Supplier practices considered less relevant to companies’ own practices 5. and they require their suppliers do the same (including labour agencies). components and products used by any industry must comply with all national and other applicable laws and regulations. www. 10. They should strive to provide a safe and healthy working environment for their workers. It helps firms attract better employees and increase employee goodwill. Suppliers that manufacture. turbulence. 0. They should uphold the highest standards of ethics.org © Responsible Business Initiative 52 Ambreen Waheed . 3. and leaves responsible firms better prepared for external changes. Financial Textil Cement and Fuel and Footwea Suga Tobacc Chemical Telecommunicatio Consumer S Service Participating sectors Fig (10. 2. organization-wide. Financial Performance It has been a much-believed fact now that CSR compliant companies perform better worldwide. It helps firms run better. It builds reputations and enhances relations with bankers and investors.9) In this research we have focused policies and practices which organizations expect from their subcontractors and their suppliers only.rbipk. calls for a forward-thinking managerial style. Companies in Pakistan working on permanent contract with international buyers especially in the consumer product sector take particular care of supply chain security standards. Supply chain standards in Pakistani service sector companies who have based their operational procedures on similar companies working abroad have trickled down automatically. health & safety. environmental performance. They should conduct business operations in a way that protects and sustains the environment and maintain management systems that measure. Outlier 4.

Organization can reap long term profits and have sustainable growth in turn. The survey questionnaire asked respondents to provide information on buying decision to ascertain cost savings through durable. reusing and selling waste.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION A study commissioned by the UK Environment Agency concluded companies with sound environmental policies and practices are highly likely to see improved financial performance♣. recycling. energy efficient products. very clearly demonstrated the link between social viability and environment stewardship on the financial bottom line of the companies.rbipk. The analysis looked at 60 research studies over the last six years. VALUE ADDED Taken by Enterprise Taken by Customer Revenue Customer Loyalty / Retention Cost Plant / Process Efficiency Customer Acquisition Customer 'Margin' Customer 'Share of Wallet Process Efficiency (cycle time) 34 Social Efficiency 'Eco-efficiency' Machine Efficiency (downtime) Employee Productivity Employee Loyalty & Availability UNIDO’s TBL approach is unique in that it adds to the traditional TBL elements of evaluation and reporting a third element of continuous improvement . finding that 51 of them (85 percent) showed a positive correlation between environmental management and financial performance. Only 5% of sampled companies expressed this level of consciousness. They also revealed that their efforts towards CSR compliance did not take away from their financial viability.36 Good social performance leads to good financial performance which contributes to making sound reputation for the organization.10) The report on UNIDO demonstration project on Triple Bottom Line in four countries including Pakistan35. The rest of the companies did not respond to the question. Fig(10.org © Responsible Business Initiative 53 Ambreen Waheed . The organizations who are able to record these data demonstrate the link between social and environmental stewardship to their financial bottom line. www.

EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 10. Fig (10.org © Responsible Business Initiative 54 Ambreen Waheed . Practice and Performance.11.rbipk. Each tile shows state of compliance for each sector divided into separate columns for different states of CSR embedded ness. Based on the evidence from the study we have highlighted the existence of each state against the 10 pillars of CSR as devised by RBI.1) www. Perception. Policy.11. Levels of Compliance of CSR Principles Summarizing the findings of our study we have developed the following matrix P-P representation of the state of CSR compliance in each participating sector.

Consumer value perception has moved beyond a simple “price-quality” focus to one where buyers seek “valueintegrity” that reflects a company’s sensitivity to environmental and social stewardship. www.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION All the sectors mapped on 10 parameters of CSR identifies the gaps for each sectors on CSR parameters.0 Bridging The Gap This study aimed at a realistic assessment of where Pakistani business stands with regards to its awareness and attitudes on CSR in relation to the world at large. Analysis of data collected against available global CSR good practice benchmarks shows: Business needs to develop clear strategies to implement the method of giving or volunteering that best suits their goals and desired image. The assumption is that learning from this study will help policy makers find ways to tackle the Global challenge our business is going to face because of a change in market perception. Highly variable CSR practices indicate no fixed goal-posts or mechanisms CG 5 SS Financial BE 4 3 2 Textile Cement Oil and gas EC SH 1 0 Footwear Sugar Tobacco Chemicals CC SC Telecom Consumer & Services EP CG BE EC SC DR Corporate Governance Business Ethical Principles Environment Compliance Social Compliance Disclosure Environmental & Social Report DR EP CC SH FP SS Product Integrity Corporate giving’s /Community investment Stake holder Involvement Financial Performance Supply Chain Security Fig(10.2) 11.rbipk.org © Responsible Business Initiative 55 Ambreen Waheed . It seems Pakistani businesses need to gear up to respond to this challenge.11.

37 A number of international CSR benchmarks were cited. there is a need for a more systematic approach to documenting best practices. which indicates that while positive role models do exist. No Nationally Recognized CSR Benchmark Respondents in the study were rightly not able to point to any nationally recognized definition or benchmark according to which they could design compliance or implementation programmes. 5. and not necessarily as an intrinsic organizational value. They also declare they are tracking their savings through these initiatives. this study confirmed that customer-specific social compliance codes were a priority for businesses primarily as a selling proposition. Examples shared were somewhat scattered and random. 4. creating more business opportunities for corporations. Less Focus on Competitive Advantage It appears from the results of the study that most CSR initiatives being implemented by respondents presently are focused on short term economic benefits. Inadequate Stakeholder Communication Companies appear to seldom engage directly with stakeholders other than those that are in some way connected to their marketing activity. high labour standards or environmental performance. remain for businesses a factor of customer demand. therefore. such as GRI. However. Moreover company efforts are typically “feel good” activities that often betray a low consideration for their long-term impact on sustainable development. This reflects a shaky perception regarding the scope and scale of CSR as a business strategy and management tool among the average Pakistani business. As such respondents are not able to link incentives or enabling factors from Government to profits. Respondents mention no investment and resource allocation for research and development on cost effective models and efficient technologies that help bring production costs down and also decrease environmental impact in future. two companies mentioned bringing their costs down by using recycled material and environmentally safe raw materials. as there are for corporate philanthropy or charitable donations. Incomplete Conceptual Understanding This study confirms that most companies still see CSR as a “philanthropic obligation”. 2. Uneven Official Incentives Respondents revealed a relatively limited awareness of laws. This study found no examples of any organized communication mechanisms between companies and their stakeholders for 95% of the respondents. SA8000 or the Sullivan Principles. Implementing these. codes or government policies related to CSR.rbipk. Hence. etc. There seems a lack of understanding of how business can contribute to create sustainable development models that promote economic growth. There appear to be no clearly understood incentives for socially responsible behaviour.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 1. 3. which revealed the ambiguity such tools pose to the average business.org © Responsible Business Initiative 56 Ambreen Waheed . SECP’s recent requirements for disclosure on the www. or as “imposed compliance” with buyer-led social standards.

www. In most respondent companies that exhibit a demonstrable degree of environmental or social compliance.rbipk. With a well-considered strategic CSR action plan Pakistan can emerge from being a potential victim of globalization to a potential beneficiary. 7. the Pakistani business environment functions in somewhat of a vacuum. Over 60% of companies approached for this study declined to provide complete information on their respective social and environment performance. 12. Experts reflect on CSR as the main hedge against the negative tendencies of globalization. the development of user-friendly formats to document and disclose social and environmental performance.org © Responsible Business Initiative 57 Ambreen Waheed .EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Code of Corporate Governance too are not presently matched by tangible performance-related incentives to motivate businesses. The upside of this is that we have global standards to guide such a leap and professional linkages to help along the process over a relatively short timeline. Government can be supported in this activity by its citizen sector counterparts. can quickly turn around the present state of information vacuum. representative trade bodies or any other institution that is currently able to provide a uniform or credible level of awareness. whether created by the Government. Secondly. Pakistan needs to leapfrog from its present level of CSR into the current paradigm. 8. identify solutions and frame policies. A key reason for this is the low trust companies have of any outsider asking questions.0 CONCLUTION It is clear from the above findings that Pakistani businesses need to be supported in bridging the gap between their present state and the rapidly evolving CSR environment that is creating new benchmarks of corporate performance and customer acceptance. A third reason is the relatively low professional capacity and allocated resources for such reporting. ideally via internet or call centre solutions. Unclear Strategic Approach Even among companies that show a relatively higher appreciation of business ethics issues. data reflects community or philanthropic responses that appear to be the result of situational decisions by or a projection of personal causes of the leadership. Compared to some countries where such neutral platforms bring major stakeholders together with CSR experts to discuss issues. Absence of National Platform Respondents were not aware of any forum or platform. A second reason is the low priority given to documentation and reporting in the typical business enterprise unless it has to do with mandatory requirements. backed up by an effective orientation programme. this study finds a low incidence of consistent strategic CSR programme direction. This can be overcome firstly by encouraging an environment of trust between companies and regulatory agencies. 6. Disclosure This report confirms the general impression that Pakistan has still to develop a culture of Disclosure. information or guidance on CSR to interested individuals or companies.

academia and the media.0 RECOMMENDATION FOR CSR STRATEGY There exists a dire need to improve the quality and quantity of corporate social responsibility. civil society and academia is a necessity. the media. CSR adds value and builds image. shareholders and labour representatives all value accountability and transparency. business. know that it behaviour by business in the marketplace and helps achieve profitability. which then must Such policies should activities to build a multilayered social be strictly observed by regulators. investors. Business on the other hand needs to abandon the subsidy-seeking culture of the past and embrace competitive ways that build capacities. human development and progress. having the requisite capacity to 38 implement guidelines and monitor progress .EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION In placing Pakistani business in a competitive place with regard to CSR. A wide-ranging and multi-tiered awareness campaign needs to be organized in order to make the various stakeholders and businesses understand the necessity and advantages of CSR and remove any misconceptions related to it. every stakeholder has a role to play and would need to be cultivated as an ally. And finally both government and There is a dire need for a dialogue between business need to include civil society as the government. An effective regulatory authority is key to this strategic thrust. On behalf of the Government. it is a condition of survival for our businesses. crossstakeholder dialogue between governments. our society. Businesses need to know that in a competitive international market. business and the citizen represented by academia. clear policy guidelines. CSR is not an option. This study recommends the following immediate actions to build into a strategic response to CSR that can leapfrog Pakistani businesses into the mainstream of business achievement in today’s world: 13. regulators. efficiencies and customer friendly practices as a basis for market advantage. And to come full circle another important area that needs investment in terms of www.org © Responsible Business Initiative 58 Ambreen Waheed . Outcomes from this dialogue must inform enablers. government authorities. A relevant and enabling CSR policy needs to be developed by Government with the involvement of all stakeholders. and experts in their policy. fair and transparent rating and reporting mechanisms and tangible incentives and penalties for companies who wish to demonstrate their commitment to sustainable environmental or social investments. consumer groups. Also crucial are facilitator organizations that can help groom small and medium enterprise in building socially responsible process. Companies have consciousness that quickly rewards ethical to feel encouraged to adopt CSR. sector to develop a win-win for every one. and ultimately. integrity and technological research as dictated by current CSR precepts. certifiers. and that just as readily condemns irresponsibility. This requires adopting a culture of compliance. Flowing from this improved awareness.rbipk. and advise the larger businesses in leveraging the advantages of CSR and sharing lessons and best practices. this requires the creation of an enabling statutory and regulatory environment.

All this is achievable. into legislative and regulatory mechanisms. Each of these areas has the potential to becoming a distinct hub of programme activity or project: 1. Link CSR to Competitive Advantage Businesses in Pakistan. time and education is consumer awareness. This area requires perhaps the widest stakeholder involvement. Also www. associations and stock exchanges. with the requisite opportunities for national debate. Trade Unions etc.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION money. the media. debate and dissemination activities. Incentive like tax breaks and awards for sustainable programs with larger economic and social impacts. along with trade associations and chambers of commerce. providing credible information beyond social investments and corporate citizenship initiatives. Social Investments needs to be based on community and societal needs assessed through stakeholder’s involvement at community and national level. Build Strong Conceptual Knowledge The first step towards a national CSR initiative must be a considered effort to build awareness and knowledge on what comprises minima for CSR performance in Pakistan. 3. Institutions like SMEDA and Technology Institutes and engineering firms could be linked into such programmes. These could then be introduced gradually. Companies could contribute with their thinking and financial capabilities supported by government incentives and facilitating policies. This can be achieved through linking SMEs with their larger corporate counterparts in knowledge transfer and capacity-building partnerships that develop responsible cost effective solutions to create a ripple effect.org © Responsible Business Initiative 59 Ambreen Waheed . especially the small and medium enterprises that form supply chains of major businesses need to make the connection between CSR and profits so they can become more efficient and pass on savings and value all along to the customer. but requires a strategic approach and a step-by-step process so Pakistani businesses can emerge stronger in the current CSR paradigm. Below is a summary of what this research has highlighted as areas for immediate attention within the context of a CSR strategy. To guide CSR perceptions in the right direction media claims and “green-wash” activities need to be watched through appropriate Government institutions like SECP and representative bodies such as chambers. all taking up the agenda in their inquiries. 2.rbipk. lobbying groups. Enhance Effective Stakeholder Involvement CSR needs to be introduced as a topic in business discussions starting right from business and commerce education to the highest level of trade negotiations. with academia. A task force could be formed with representatives of Government from SECP. Business and select CSR experts to suggest a Pakistan-specific “definition of CSR” with accompanying policy guidelines for Government to implement and Process indicators for business to assess their initiatives and concept and frameworks to be included in business schools curricula. All community projects and social investments needs to be assessed for both negative and positive impacts. CSR focus needs to shift to improving internal efficiencies using CSR as management tool.

SECP in its regulatory role has a key responsibility in steering other stakeholders towards such a vision. representative bodies. Promote “Business” Thinking for CSR Projects CSR interventions that seek to respond to community needs such as health or sanitation or education are often not seen by their corporate sponsors as social investments and as such not www. 7. Define and Promote Clear Incentives At present the Government allows for tax exemptions and preferential treatment of businesses that contribute to philanthropic causes. It would be appropriate to immediately embark upon the task of instituting this national CSR standard or at least a voluntary best practice guideline against which companies can benchmark them and be accepted in the global market. the country needs a clear and compelling strategic vision for CSR. Simpler CSR reporting guidelines need to be devised and encouraged through CSR Report Awards by Government agencies like SECP in collaboration with civil society organizations having technical expertise in CSR reporting standards. Promote a Shared Strategic Vision With all the above initiatives building the context for action. Benefits and recognition akin to those proposed for exemplary taxpayers by CBR could be extended to transparent and accountable companies. Again. Social investments can be recognized as tax-relief contributions and finally official recognition of CSR as a corporate responsibility must be matched by public rewards instituted officially or through trade associations and civil society organizations. Over time and through a calibrated process of national dialogue and technical appraisal these guidelines could be inducted as a national standard on which companies can be graded for performance and for bestowing incentives. Harmonize and Standardize CSR Performance The most urgently required is a CSR tool based on considerations of our national limitations and strengths for gaining competitive advantage with a focus on Global CSR debate and to get it recognized globally. a task force of such citizens hosted by SECP would be well placed to take this forward through the active collaboration of academia. trade associations and public benefit organizations. 5. Other incentives include awards and public recognition of individuals and companies bestowed by the government. CSR experts and the media. CSR must be marked for such incentives too. All this promotes business interest in certain activities and allows for interested individuals to aspire to higher standards.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Learning from successful and unsuccessful investments can provide feedback into more relevant policies and procedures.rbipk. CSR experts and conscientious citizens who can help promote the national CSR strategy. Pakistan has many a notable example of socially responsible entrepreneurs. 6.org © Responsible Business Initiative 60 Ambreen Waheed . Companies going beyond compliance would more readily gain competitive advantage. Social reporting can be encouraged through instituting minimal disclosure requirements as part of the licensing and compliance process for companies. 4. articulated convincingly by champions who practice what they preach.

Examples can be documented and covered through the media. compliant organizations in mentoring relationships with smaller local companies that are part of the large companies’ supplier network. collaborate with other responsible leaders and provide a learning forum for young leaders. due to a widespread citizen movement and action by activist judicial systems. and thence for government. from the consumer society perspective. A real contribution to CSR that business can make is to go beyond providing resources and instead impart “business” thinking to their social interventions. possibly through the forum suggested above. Recent years have “True. the world has also seen them contributing to sustainable development. In Pakistan too there is room for a national CSR forum where knowledge can be shared informally and good practice honed to take the country into the next plane of CSR performance. Good mentoring programmers can be recognized and replicated. Groom Future CSR Leaders There is no dearth of innovation leaders among Pakistan’s corporate and citizen sectors. This will encourage social enterprise models that bring sustainable economic competitiveness to projects and lead to community building through profits and entrepreneur skills. with secretariat housed in an institution such as the Institute of Corporate Governance. 8.org © Responsible Business Initiative 61 Ambreen Waheed . An advice help-line and newsletters can provide basic CSR information and a CSR induction kit for businesses can be developed and disseminated on a cost-recovery basis. An approach towards this goal would be to pair large. SECP can lead this forum. The forum could become a membership body and take over the tasks described above. such as publishing newsletters and disseminating good practice values culled from a regular series of national dialogues. but telling witnessed a spate of convictions of world renowned philanthropy from responsible business is still a conceptual leap business leaders for unethical practices. which indicates the for our businesses that prevents shape of things to come. Over time and through a considered stewarding approach. India 2001 ©RBI corporate and citizen sectors is now changing to joint action and strategic partnerships for sustainable development.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION open to the kind of scrutiny reserved for financial investments. or any another academic institution. Governments and corporations now regularly partner civil rights and development groups guided by CSR experts to develop and implement sustainable interventions in an ever widening range of environmental and social themes. Businesses need to be convinced that social investments are not too different from financial ones and thus have to be measured like them. These innovative corporate leaders can be the best resource and act as a catalyst for creating a larger pool of future leaders. This is a reason why such projects often do not last long. “ that confrontation between erstwhile antagonists among the CSR in South Asia. Seed a Vibrant National Forum CSR has fast emerged as key management concern for businesses.rbipk. or a suitable citizen sector organization. leading to a gradual ratcheting up of socially responsible thinking that is not averse to profits but to unethical practices. it www. However. 9. These leaders need to take a leap forward to educate themselves on CSR issues and then showcase ethical behaviour within their own organization.

such as chambers of commerce.rbipk. SECP. www. business schools or CSR enabling organizations. These young leaders can be encouraged through rewards and recognition by representative bodies.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION would be possible to create a culture of competition based on innovation and socially responsible behaviour in all aspects of business.org © Responsible Business Initiative 62 Ambreen Waheed .

org © Responsible Business Initiative 63 Ambreen Waheed .EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION THE WAY FORWARD How to leapfrog into the global CSR mainstream for competitive advantage Government CSR Expert Multinational Corporation Large National Corporation Funding Agencies Sustainabl e Technology Business School Technology Institute Small and Medium Enterprise Society and Environment Fig (13) www.rbipk.

org © Responsible Business Initiative 64 Ambreen Waheed .rbipk.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION www.

She expressed her concern on Pakistan’s slow progress rate as compared to other countries and urged that CSR could be used as a tool to gain competitive advantage in a rapidly changing global trade environment. She shared with the audience SECP’s objectives for commissioning a national baseline study of the state of CSR in Pakistan. economic and environmental context – the so-called triple bottom line – instead of just their financial outlook. including Government. Director SECP. is the first of its kind in the country and was going to help fill the gap that exits regarding credible information on which to base national policies.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION APPENDIX B APEX DISCUSSION FOR CSR STRATEGY Date: Time: Venue: 1. Ms. Ather said this research. a feedback form. She said that since the successful implementation of the Code of Corporate Governance. Director SECP Ms. Introductory Session: Ms. a summary of research findings. Registration: Participants were registered at the registration desk by RBI volunteers and were provided with a folder containing details of the seminar. SECP was now engaged in conveying to all the organizations it was charged with regulating the emerging importance of a viable strategy for CSR in Pakistan. brand image and satisfaction at being “good” corporate citizens are just a few basic benefits to be gained through the principles of CSR. welcomed participants to the seminar and explained the context and significance of the research being presented and its relevance to the emerging importance of Corporate Social Responsibility (CSR) in conduct of business. and the citizen sector were represented at a senior level. She explained that enhanced corporate reputation. business & industry. Delegates: 30 participants representing a wide array of stakeholders. Ambreen Waheed.rbipk. information material by SECP and a souvenir 3. Hotel Pearl Continental Lahore th 14:30 15:05 15:15 16:00 17:15 2. www. and that in order to thrive. SECP feels an evaluation of the current state of CSR in Pakistan would facilitate and improve transparency and accountability. AGENDA Participant Registration SECP’s CSR Initiatives Research Brief & Findings Reflections & Way forward Closing Remarks RBI/SECP associates & staff Ms. Executive Director RBI made a presentation outlining the background. Shah. 4. and help businesses compete better within the WTO regime. Ambreen Waheed. Advisor RBI Dr. She said that as a result of rapid globalization in the past decade the expectations of customers are now greater than ever before. context. Jaweria Ather.org © Responsible Business Initiative 65 Ambreen Waheed . 5. followed by a gap analysis of CSR in Pakistan. companies today must also be mindful of how their businesses impact their social. Chairman SECP 26 September 2005 2:30 pm – 6:00 pm Shalimar Room. Faiz H. Dr Tariq Hassan. Opening and Welcome: Ms Jaweria Ather. methodology and findings of the baseline study. Tariq Hassan. conducted by RBI on behalf of SECP. Chairman SECP presided over the session. Executive Director RBI Dr.

He said that the importance of CSR as a national business issue in the UK could be gauged from the fact that the country had a minister for CSR. and lack of a strategic approach as major causes of concern in implementing the precepts of CSR. To overcome these she proposed a “Collaborative Model” that aims to bring together the government. Policy. Waheed. quality and occupational standards where as Services and goods sector.org © Responsible Business Initiative 66 Ambreen Waheed . Practice. Advisor RBI. she reiterated that to leapfrog into the global mainstream and gain competitive advantage it is essential to for Pakistan to develop and then work in unison within a CSR strategy that focuses on awareness and dissemination of CSR prospects. social. She then discussed the levels of analysis based on “Thought-toAction” transition model comprising the “4-Ps” of “embeddedness”. Shah reiterated the 8 issues identified by the research and initiated discussion on them one by one as follows: www. began the session by showing participants the United Kingdom’s official CSR website.rbipk. Dr. who clarified elements of the questionnaires in response to their respective queries and backstopped their information needs. In her discussion Ms. She expressed concern that in the new Global market environment these industrial sectors would face the most pressure to adopt CSR concepts or risk losing business to other countries. which can be considered a fair response rate for a study of this kind even though the expectation was for a higher response. She presented the gaps identified during the research and presented her recommendations for CSR Strategy as a way forward and basis of the Panel discussion in the next session 6. and informed them about steps that are being taken in a number of countries to mainstream CSR as a day-to-day management issue.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION • She informed participants that from a cohort selected by location and size from within 10 industrial sectors over 100 companies were invited to participate in the study. referring to the findings presented by Ms. namely Perception. absence of benchmarks. For this purpose Dr. She said that there is overall lack of CSR implementation against most of the CSR pillars and little effort or evidence of assessment of impact and linkages of CSR activities to financial performance. Towards the end of her discussion. Waheed shared with participants the research techniques used for the study and a brief overview of the three questionnaires developed for data collection. Faiz Shah. creates opportunities for sustained stakeholder dialogue. The response rate was about 35%. the urge to hide information with a culture of non disclosure. All invitees for research were followed up by RBI. He set the context of the discussion by comparing current global trends in CSR with the situation in Pakistan. Cross Stakeholder Panel Discussion: Taking up the facilitation of the session. Waheed highlighted the “CSR Pillars” framework against which the research has been carried out: Ms. He pointed to the need for a national consensus on CSR and the importance of a practical national CSR strategy developed with inputs from all major stakeholders. Ms. Waheed pointed out the glaring lack of proper channels of stakeholder communication. She revealed that there is a lack of understanding of CSR precepts and it is still equated to Philanthropic gestures and corporate giving in general. He highlighted SECP’s emphasis on corporate governance as a positive contribution to CSR. maintains focus on sustainable development priorities and paves way for benefiting from global market opportunities. encourages CSR practices through factual information. multinational corporations and funding agencies to support citizen sector and media synergies to develop constructive dialogue and appropriate technologies to help build sustainable business. Performance. In terms of policies the fuel & sector and the tobacco industry were amongst the high scorers in proper choice and compliance of environment.

6. 8. She asked how these precepts could be made relevant and applicable to the not-for-profit sector. However.rbipk. Dr. Tariq Hassan agreed that government incentives were less than perfect. He said that most of such organizations did realize the importance of CSR but still needed to build on this knowledge to develop their specific CSR plans. indicating that even if they are doing it at the behest of clients. which would be provided. such industrialists are cognizant of the concept of CSR. This amounts to a strong disincentive for companies to spend on labour and workplace benefits. he said that on average 35% of company incomes actually goes into workers’ benefits and for ensuring worker health and safety etc. He underscored the need for practical steps to be taken in this regard and assured participants that the SECP would soon take the initiative of going beyond verbal CSR to prepare such guidelines. He explained that such organizations were already performing some of the functions intrinsic to the CSR model described by Ms. Tariq Hassan responded to the question saying that section 42 not-for-profit companies have a mandate and objectives specific to such aims as social welfare and corporate philanthropy. social health and security and compared it with the 1960’s and 1970’s when new social security legislation was created to effectively dealt with these matters. He said that there was a dire need for creating awareness for those to whom the concept is completely new so that everyone is involved. when these companies file their returns these very expenses are disallowed by tax authorities. Hassan informed the participants that SECP and the Institute of Chartered Accountants of Pakistan (ICAP) are currently in the process of developing a standard for social auditing. Build strong conceptual knowledge Link CSR to competitive advantage Enhance effective stakeholder involvement Harmonize and standardize CSR performance Define and promote clear incentives Promote a shared strategic vision Promote “business” thinking for CSR projects Seed a vibrant national forum A Representative from NGO said that CSR as a concept was relatively unknown to the NGO sector and as such there was a need to educate the civil society organizations about its precepts. 2. Dr. He expressed concern over the lack of responsiveness of officials responsible for matters such as workers welfare. 4. but noted that CSR is not a completely new concept and had existed for many years in a number of forms. Representative of a professional association shared his observations on the current state of legislation in the country and stressed that a strong action plan was needed to properly disseminate the CSR concept. He narrated his recent visit to a leather factory. thus validating the notion for building strong conceptual knowledge. Speaking from his knowledge of tax laws. Waheed. Representative from oil sector asked how long it would take SECP to develop such guidelines and how long it would take companies to develop the capacity and systems to comply.org © Responsible Business Initiative 67 Ambreen Waheed . Dr. 5. where the owners have installed a water treatment plant.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 1. 3. especially those organizations that are registered under section 42 of the Company’s Act. Dr. Hassan explained that companies would need sufficient time to prepare for social compliance. especially for not-for-profit companies to make sure that they spend their funds responsibly and for the purposes received. 7. www.

A civil society member said that according to a survey conducted by PCP in Pakistan on corporate citizenship: . and said that they require immediate attention on the part of government. presented her idea of targeting the stock exchanges as mediators for CSR among listed companies in Pakistan. Another participant from Oil and Gas sector said there was a need to study the prevailing CSR benchmarks in countries such as the UK and France.rbipk. civil society as well as the academia to make a joint effort for the spread of the CSR concept. said multinationals that normally have to follow policies of their global parent companies. A representative of chemical industry. He agreed with the observation made earlier about the necessity of communicating to businesses and individuals alike that philanthropy is but one cornerstone of CSR. newspapers. Small and Medium Enterprises Development Authority (SMEDA) representative articulated that if CSR was to register a sufficiently deep impact it was necessary to develop a collaborative front involving the ministries.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION A Civil Society representative pointed out the inadequacy of laws relating to CSR. He advised the use of taskforces. He said that SECP should act as the umbrella organization to maintain liaison with CSR organizations in other countries. including CSR guidelines can be encouraged to share their practices and well developed procedures with the local organizations for creating motivations. which should be invited to support CSR efforts to strengthen the awareness base nationally. They will be more prepared to accept the concept of CSR because it serves their business interests. Pakistan still did not rank as a socially responsible state. A participant from a multinational. . She elaborated by giving the examples of organizations which some years ago were subsidized by the government for achieving compliance and certification to quality management standard ISO 9000.67% companies consider it to be extremely important. as well as the media and high profile organizations. TV channels and conferences to further the CSR concept. along with a mechanism to allow for an independent monitoring authority. .16% companies believe it to be important. Representative from pharmaceutical industry reiterated the necessity for the government to create benchmarks and incentives to act as catalysts for a socially responsible business culture. She said those companies or sectors should be targeted first. Workers-Employers Council representative. which embraces a much wider thought. and incorporating these into a nationally relevant system. pointed out the weak base of the CSR concept especially when related to Small and Medium Enterprises (SMEs). A participant representing oil and gas sector stressed on the need for creating a platform to help companies achieve social standards compliance. which are likely to be better motivated through such incentives.Only 6% think otherwise www.org © Responsible Business Initiative 68 Ambreen Waheed . Referring to the findings of a recent study that finds Rupees 19 th billion being generated through charity. and as a result of which a large number of companies attained a higher quality rating. he expressed his concern that in spite of being ranked 6 among the countries demonstrating high levels of private philanthropy. Others will follow suit. He further noted the lax efforts of the government to rise up to the occasion and face the challenge head on.

which recognizes environmental reports from among entries in three categories.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Other findings from this study reveal that out of the Rs. www. against their relevant action heading: 1. Dr. utilizing the good offices of representative bodies such as trade associations. government intervention should be minimal yet effective. Member representing workers/employee offered their services to in this regard. namely. however that since these donations are voluntary. “best local listed company” and “best unlisted company”. NGOs. The award aims to encourage the development of an environmentally responsible culture in Pakistan. Ambreen Waheed. He cautioned. 7. labour unions. Reflections on the Way Forward: Dr. SECP agreed to take the initiative in this and to bring together representatives of CBR and other stakeholders to discuss these options. Jaweria Ather and Ms. On a more positive note he insisted that whether the government plays its part or not. Representative of workers/employee council was of the opinion that the government. “best multinational”. A Civil Society organization member. He said that in order to better channel all these resources the government must introduce social reporting guidelines and provide incentives such as awards for corporate philanthropy. Faiz Shah drew the attention of the participants to the agenda for the apex consultation and invited precise comments from the delegates on the 8 issues identified in the research as requiring attention in terms of a nationally relevant CSR strategy. it does appear that companies are interested in knowing how they can accept greater social responsibility. so as to build mutual appreciation of each others perspectives and work towards synergies in the context of competitive advantage. has failed to take the initiative in this scenario. Participants suggested the starting up of a periodic newsletter and the use of private TV channels to disseminate awareness about CSR.rbipk. as of yet. He pointed out that although a CSR culture is not too widespread yet. SECP and RBI to assist meaningfully in building conceptual knowledge. Enhance Effective Stakeholder Involvement There was unanimity again among participants for a national initiative to involve business and its various stakeholders. 600 million was contributed by the corporate sector. 19 billion generated through charity. which should be developed with the help of a cross-sectoral national task force formed by SECP with the possible involvement of academia and the media. Comments by the participants appear below. Reports from companies are evaluated for their clear communication of a company’s environmental responsibility performance by a panel of judges that includes Ms. mentioned an incentive scheme being run by WWF-Pakistan in collaboration with the Association of Certified Chartered Accountants (ACCA). chambers of commerce. all the various stakeholders present in the room should make a unified effort to propel the cause of CSR forward. but must now make amends by giving the scheme its due attention otherwise things were likely to deteriorate. He urged participants. Build Strong Conceptual Knowledge Participants unanimously supported a national CSR awareness campaign.org © Responsible Business Initiative 69 Ambreen Waheed . Rs. Hassan commented that the recently established Institute of Corporate Governance could be asked to provide a home for this task-force since they have adequate resources and because volunteer organizations are represented on the institute as well. 2. called the “Pakistan Environmental Reporting Award”. media groups and educational institutions.

suppliers and traders together with consumers Expert Working Group developing CSR content for mainstream media programmes NGO coalition propagating CSR through their respective channels Orientation & Training programme on “Pillars of CSR” for all above groups A participant informed the participants about the national CSR roundtable pilot project being implemented by GTZ– German Development Cooperation. and that as with all recommendations emerging from this consultation SECP would consider this option. SECP could consider taking over the institutional support of the roundtable. and in his opinion it would not be possible to develop a nationally relevant set of CSR guidelines. but also quoted the example of the Global Reporting Initiative (GRI) which in addition to core parameters. and as a member of the organization’s governance structure invited participants to become involved in the development and testing of such evolving tools for measuring and reporting CSR performance. which brings together all stakeholders. and analyse what would be a realistic mix of CSR incentives that promote corporate interest. Tariq Hassan agreed that stakeholder participation was necessary. identify what other countries are providing in similar conditions. participants were also conscious of the cross-stakeholder participation. recognition. sensitive to the particular requirements of Pakistani industry would be a positive outcome of SECP’s interest in CSR. subsidies. He also shared with participants that a draft set of national CSR guidelines had been developed under an initiative supported by EPB and leading export companies in 2004. Faiz Shah suggested that since this pilot would end in December 2006. taxes and oversight. Such a study would be required to ascertain what incentives are presently available in Pakistan.org © Responsible Business Initiative 70 Ambreen Waheed . www. bringing buyers. 4. Harmonize and Standardize CSR Performance In response to this recommendation. government confidence and civil society acceptance. Dr. Ms. one participant said that CSR needs are different for different businesses. which could be used as an agenda for further discussion under the aegis of the Corporate Governance Institute. Dr. Dr. which are cross-applicable.rbipk. with representation from government. awards and benchmarks. There was general agreement that the situation required a detailed study of present laws and regulations that govern the conduct of business. and civil society Industry CSR forums. including: Regional CSR roundtables. it was clear that there was a lack of information regarding what the government was already offering as compared to what would be required to promote CSR among companies. resulting revenues. time. duly supported by the business sector. has also released industry-specific supplements. expertise. assess what stakeholders see as positive motivators for CSR. resources and institutional commitment needed to develop standards or codes that aspire to national and international legitimacy and acceptance. 3. However. business. Ambreen Waheed.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION Participants put forward a number of practical suggestions. A general consensus emerged among participants that a national CSR code. Shah reminded participants of a number of existing standards such as those for quality. environment or social reporting. Define & Promote Clear CSR Incentives While participants were unanimous in agreeing that government should introduce concrete incentives in the form of tax benefits. Executive Director RBI mentioned her continuing involvement with GRI and informed participants that GRI is now in the process of developing a reporting standard for emerging markets.

Seed a Vibrant National CSR Forum The Chairman SECP impressed upon the delegates that sustainable. He agreed with the potential that a strong national CSR dialogue would have on building awareness. 6. Tariq Hassan said that businesses need to have a common vision centred on “enlightened self-interest”. www. Promote Shared Nation-wide CSR Vision When asked to identify a national perspective on CSR. Participants agreed that this perception gap needs to be bridged. and instead lend a hand in building a culture of CSR. However. participants and their companies would not shy away from their responsibility as corporate citizens. and social services and projects contribute to cementing them. which can further CSR and corporate citizenship in the country and in her capacity as an active member of international CSR networks such as the UN Global Compact. Dr. Some multinationals are keen to interact with counterparts who it can explore effective partnerships in CSI. companies and NGOs. Yet. Waheed mentioned that companies are taking up social service delivery or strategic partnerships with government or NGOs to address specific social or environmental issues as “corporate social investments” (CSI). and as a direct consequence generate greater business opportunities. And he was sure that with an empowered environment. Dr. everyone agreed that it would be beneficial to have a national vision along which to develop a comprehensive CSR strategy. Ms.rbipk. educational institutions. it appears that NGOs and businesses see social investments quite differently. Participants expressed enthusiasm for this concept as a way to build shared vision at the national level and for working with local communities. a situation where companies would serve community-specific needs and safeguard the environment knowing that such actions generate greater well-being among existing as well as potential customers. possibly through multi-stakeholder orientation and also by developing need-based community service programmes. Taking this further. participants agreed that as yet there was insufficient realization of the fact that social investments are part of business thinking. Waheed committed RBI’s technical capabilities to any initiatives by SECP.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 5. This is something that is evident even among successful non-profits and NGOs. There was agreement that transferring value perception and relationship-building are central to sustaining a business. He said that SECP would do all it can to support all meaningful attempts towards developing a socially responsible business sector in Pakistan. representatives from SMEDA and WEBCOP offered to organize such seminars among their respective networks. Promote “Business” thinking for CSR interventions Leading off from the preceding views on enlightened self-interest. participants agreed that there was none. NGOs) and other capacity-building stakeholders.org © Responsible Business Initiative 71 Ambreen Waheed . offered to continue backstopping them. which could then guide various programmes as are required for various stakeholders and industry sectors. strategic partnerships must be sought between business and government or civil society. Ms. She accepted the suggestion from a number of participants and said RBI would commit its technical resources and staff to run CSR orientation sessions for companies and key stakeholders in concert with SECP. 7. Faiz Shah reviewed the comments hared by participants on the 8 outcomes of the study and asked for any further thoughts from them before closing the plenary. UNCTAD and GRI.

He appreciated the enthusiasm exhibited by the participants. Hassan referred to CSR as. and carrying it forward with actions in a meaningful manner”. Shah for facilitating the session. He said it was a pleasure for him to be able to attend this apex consultation because he learnt from it and thanked all participants who had come from all over the country to attend. 8. A number of delegates voiced full alignment with SECP’s views and committed support for any initiatives that SECP would develop in future. He urged every corporate citizen to recognize their responsibility and make efforts to work towards realizing social values in enlightened self-interest. He said that if done professionally. Tariq Hassan reiterated SECP’s commitment to see CSR establish itself firmly as a priority area in Pakistan’s policy environment and emphasized again the importance of stakeholder ownership and commitment for any CSR strategy initiative to succeed. “a process of generalizing what we have. He expressed satisfaction at the outcomes of the consultation. He said CSR was a movement which must go beyond workplace health and safety. it would help companies realize that CSR is here to stay as a priority. Ms. Tariq Hassan Chairman SECP www. and once again urged everyone to shoulder responsibility. and take into account the consumer protection aspect so as to win the very hearts of the community. The Chairman SECP stressed the need to develop stakeholder synergies so as to fully exploit the advantages that can possibly be derived from pursuing a well-thought out CSR strategy. Ambreen Waheed and appreciated the hard work of the RBI team for conducting the country’s first CSR study and for successfully organizing the consultation. Dr. He thanked Dr. the high quality of their feedback and the commitment they had shown in bringing about a CSR compliant culture in Pakistan. Dr.rbipk. following which he hoped to consider a media campaign with the help of various stakeholders to achieve the outcomes outlined in the day. He said he was looking forward to the final draft of the report. which he felt was a quantum leap towards fostering a socially responsible environment. prioritizing what we want. He reiterated SECP’s wholehearted support towards this goal and invited others to join the initiative.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION In response it was suggested that a full-scale need assessment on CSR should be conducted at company level to see how much CSR was an intrinsic part of company plans.org © Responsible Business Initiative 72 Ambreen Waheed . But for this we need widespread partnerships. CONCLUSION: Closing the plenary. Ambreen Waheed thanked the participants for their interest in the study and for their valuable inputs while validating the recommendation on the CSR Strategy outline presented Dr. “We are fully committed to CSR. We will not shy away from our obligations. Hassan thanked Ms.” Dr.

rbipk. TARGET Build Strong Conceptual Knowledge ACTIVITY .Task force .Pak Inst. co-funding .PICG .Business . Index Card .Outreach LEAD ROLE .National Campaign .take reps from existing committees forum - . Governance . .Corp.Annual CSR Event .Industry-specific norms .Develop frameworks . 7.Tax break .Newsletter .Govt.design need-based programs . Harmonize and Standardize CSR Performance Define and Promote Clear Incentives Promote a Shared Strategic CSR Vision Promote “Business” Thinking for CSR Projects Seed a Vibrant National CSR Forum Link Taxes to CSR performance – tax reform Review laws and draw together supportive elements .SECP . 9.enlightened self-interest - SECP EFP RBI SECP GTZ/RBI NGO Coalition Industry Forums Media campaign RBI Consider GRI as norm 5. 10.Recognize performers .RBI TIME 12-18 months ASSUMPTION CRI Message development 2. Link CSR to Competitive Advantage Enhance Effective Stakeholder Involvement 3. Of Corp. 4.CSR Centre -SECP .NGO Coalition -Corporate reps .formal CSR guidelines .CBR 6.Private TV channels .org © Responsible Business Initiative 73 Ambreen Waheed .CSR Expert www. . 8.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION APEX CSR DISCUSSION WORKSHEET Lahore – 26th September 2005 # 1.CSR Roundtable .

V The World Wide Fund for Nature (WWF) came into being to protect natural resources.EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 14. 3 OECD Organisation for Economic Co-operation and Development-Organization groups 30 member countries sharing a commitment to democratic government and the market economy. http://www. "Corporate Social Responsibility Reputation Effects on MBA Job Choice" Stanford GSB Working Paper. UK Minister for CSR 14 John Zinkin.com/iddat. Policy. 2 WWF World Wide Fund for Nature was officially formed and registered as a charity on 11 September 1961. and everything else that keeps a Muslim serving God for His sake alone. 20th September 23 According to Islam. education. and base its grants on the best scientific knowledge available a policy which has been adhered to ever since. Singapore 9 Business for Social Responsibility. disclosure requirements. USA 10 Defined by “Business for Social Responsibility” 11 Business for Social Responsibility 12 Samuel DiPiazza. WorldCom. heedlessness. Associate Professor. 16 Promonent recent example have involved leading businesses like Enron. “Silent Spring” -exposed the hazards of the pesticide DDT raised question on humanity’s faith in technological progress and helped set the stage for the environmental 5 The company tried to hide that instead of sharing and overcoming the disaster 6 International treaty on global warming risk management 7 The WEF’s failure to deal with the social and environmental issues in the agenda. wherever possible. 22 “CSR Supplement”: Financial Post . Parmalat. and a slew of national ones like the Pakistan Institute of Corporate Governance. supra 32 Iddat (also pronounced IDDAH) is the period of waiting mandated upon widows after the death of their husbands during which they may not remarry. Commissioner for Trade. 24 Raymond A. SARB SouthAsia Alliance for Responsible Business. Shell and Nike. Performance 27 Bench marking Corporate Citizenship Practices 2003 Report. European Commission 21 A by FTSE 350 index undertaken by the Institute of Business Ethics found above average financial performance for companies with CSR policies. 2004. WWF planned to work. Part III.org © Responsible Business Initiative 74 Ambreen Waheed . Philipines Business for Social Progress 28 This could also be a key reason for the relatively low response-rate for this particular study 29 4-Ps. Klesc Business Ethics in Islam”.netfirms. This purification of the soul is called tazkiyah”. Greenpeace was founded to fight against the pollution and the hazards caused due to human ignorance. The work covers economic and social issues to trade. May.rbipk. the Asia Pacific CSR Centres Group and the Globally Responsible Leadership initiative. mubaarak. 17 Prominent among these are a wide array of international interventions including Global Reporting Initiative. development and science and innovation. Iddat is established from the Quran and Hadith. Minister of State for Trade and Industry and National Development.org 4 Carson Rachel.htm www.Perception. Director. Montgomery and Catherine A.oecd. Ramus. 31 See Aguilera. Tomorrow’s Company 20 Pascal Lamy. Practice. with existing non-governmental organizations. Policy. 8 Dr Vivian Balakrishnan. a set of business ethics principles.com. caprice. Performance 30 David B. product integrity specifications or identified social & environmental compliance standards 26 4-Ps. Islam emphasizes a conscious effort to avoid “hypocrisy. 18 São Paulo Consensus of UNCTAD XI 19 Mark Goyder. et al. CEO Price Water house Cooper 13 Stephen Timms MP. Muslim Executive and Expatriate Newsletter Volume 1 Issue 3 “ .Perception. Nottingham University 15 Amnesty International and OECD was formed by thirty countries to monitor economic development and foster good governance. 25 For example. Practice.0 REFERENCES 1 AI’s vision is of a world in which every person enjoys all of the human rights enshrined in the Universal Declaration of Human Rights and other international human rights standards.

Group Chief Executive of BP. PEMRA. NEPRA etc.org © Responsible Business Initiative 75 Ambreen Waheed .EVALUATION OF THE STATE OF CORPORATE SOCIAL RESPONSIBILITY IN PAKISTAN AND A STRATEGY FOR IMPLEMENTATION 33 Lord Browne of Madingley. Malaysia. 34 Shah Faiz.sa-intl. Monopolies Control Authority. www. 2002 37 http://www. definitive proof that responsible companies perform better financially.com. Waheed Ambreen “ Triple Bottom-line Demonstration Project in South Asian Countries–Pakistan”. Johannesburg. Absolute. South Africa. Project Report: World Summit on Sustainable Development.org 38 Strong regulatory authorities are exemplified by such institutions as the State Bank. 2001 ♣ Holy Grail Found. Marjorie Kelly. http://www.rbipk. Kuala Lumpur. SECP. 2002 35 Waheed Ambreen “GRI Potential at the Grass roots: Applying the Triple Bottom-line to Export SMEs in Pakistan” Paper presented at the GRI Regional Symposium.iso14000.

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