Corporate Social Responsibility

Omayma Khan
April 25, 2005, LEAD Pakistan
Contents

• CSR

− What do we understand?

− Definition

• The Development of CSR

• The Role of Business

− Is it really a new emerging idea?

• Case Studies

• CSR in Pakistan

• How we know we’re getting it right

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CSR

• What do we understand by this term?

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Definitions

• CSR is about how companies manage the business processes to

produce an overall positive impact on society.
− You can have the greatest strategy in the world but if your vision of the
future is wrong you can end up traveling fast in the wrong direction
• The World Business Council for Sustainable Development in its
publication "Making Good Business Sense" used the following definition.
"Corporate Social Responsibility is the continuing commitment by
business to behave ethically and contribute to economic development
while improving the quality of life of the workforce and their families as
well as of the local community and society at large“

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Definitions cont.

• United States
− More philanthropic approach
− It is seen as tainting the act for the company to receive any benefit from
the giving.
• The European model
− More focused on operating the core business in a socially responsible
way, complemented by investment in communities for solid business
case reasons.
• But as with any process based on the collective activities of communities
of human beings (as companies are) there is no "one size fits all". In
different countries, there will be different priorities, and values that will
shape how business act.

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The Development of CSR

• Huge, rapid and erratic changes in how

people feel about the world in which we
live… leading to…
− Changes in values, expectations, moral
codes, ethics, moods and emotions
− Significant impact on every aspect of
consumer behaviour, worker motivation
and investor relations
− Enron and Worldcall - ‘red flag’

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The Role of Business

• Providing goods and services

• Creating wealth
• Employing people
• Supporting local economies
• Seeking mutual advantage
• Seeking to ensure that benefits are widely felt

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A Growing Global Role

• Greater presence in non-OECD countries

• Greater impact/influence of their business
• One thing is for sure - the pressure on business to play a role in social
issues will continue to grow. Those institutions which have grown in
power and influence have been those which can operate effectively within
a global sphere of operations.
• There is a growing interest, therefore, in businesses taking a lead in
addressing those issues in which they have an interest where national
government have faltered in coming up with a solution.

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Companies – what are they doing differently now

• Before
− Health, Safety and the Environment
− Annual Accounts
• Now
− Management in terms of people and processes
− Engaging with stakeholders
− Measuring the company’s impact on society
− Greater information disclosure
− Greater accountability e.g. transparency in hiring, vendors
− GREATER AWARENESS OF THE IMPACT OF STAKEHOLDERS

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Important to have…

• Policies
• Frameworks
• Codes of Conduct etc.

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But more vital…

• Can a business…
• …Walk the talk.

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Case Studies

• Exxon Valdez
− What not to do when things go wrong
• Johnson & Johnson
− What to do when things go wrong?

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CSR in Pakistan

• Previously mainly philanthropic

• Shift in big corporations investing in areas of operations
− Pakistan Tobacco
− Eni Lasmo
− Engro

• Still along way to go, but some are getting there

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How do we know we’re getting it right?
Measuring Progress

• Management Systems – having the processes to support good business

practice
• Engaging Stakeholders – maintaining productive relationships
• Creating Material Benefits – finding win-win situations for all
• Reporting Standards (Global Reporting Initiative) – testing performance
against established criteria

• Leadership – having their buy in

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