Corporate Social Responsibility has become quite the buzzword among companies these days.
At Business Agenda, we receive countless press releases talking about Company A’s community outreach program to Company B’s tree-planting and mangrove restoration projects, and so on. And while these efforts merit recognition in itself, there are still a number of organizations that merely regard CSR as yet another box to be checked off before going back to the real business of driving profits.
There are quite a number of companies out there paying lip service to CSR projects that are innovative in solving the environmental crisis and the issue of poverty, but on the other end they barely pay their employees the minimum wage. I don’t know about you, but I don’t think you can hardly call these companies “socially responsible.”
In a recent interview with former Ayala Land, Inc. President Jaime I. Ayala, who now leads the Philippine arm of the Stiftung Solarenergie Solar Energy Foundation, he asserts that a corporation’s cost to doing CSR is basically chunk change.
“CSR for me is just token,” Ayala says. “There are companies who spend P300 million on CSR, but in the context of everything, that amount is probably less than half a percent of the corporation’s entire budget.”
It is with this mindset that Ayala decided to focus solely on building his social enterprise full-time. He created Stiftung Solarenergie with an objective that’s primarily geared toward social development, with all Key Performance Indicators, bonuses and metrics socially driven.
“It’s completely different from a company doing CSR,” Ayala reasons, adding that in CSR the focus is still on the bottom line. “It’s your real objective, but you want to help, too— there’s not much connection because it’s good for the brand, but then that’s just lip service,” he points out.
CSR as a Universal Practice
Short of setting up a social enterprise like Stiftung Solarenergie, what, then, makes for a good CSR program? In the recent Hitachi Young Leaders Initiative (HYLI) press conference held at the Makati Shangri-La Hotel, Atty. Philip Miguel Ranada shared that CSR programs are not that different from instant coffee.
“They’re essentially the same thing everywhere,” Ranada asserts, “but the programs differ across countries to suit the local experience. Despite the global prevalence of CSR, it’s not like ‘one size fits all’; it needs to acquire the local flavor.”
Before CSR became the prevailing buzzword it is today, it was regarded as an ethical niche. “It was sort of a hippie movement, and one pioneer was The Body Shop wherein they convinced people to spend an extra P100 on the claim that their products are sourced from farming communities in Africa and were not tested on animals,” Ranada shares.
Clearly things happened between then and now, and CSR is already in the mainstream. “Today if you don’t do CSR, you’ll be an outlier—a source of potential embarrassment.”
It could be that this mindset is what drives companies of every shape, size and net worth into adopting CSR practices in the workplace—but if this is its main reason for doing so, then it might not lead to an effective CSR program. More than mere philanthropy, CSR should now show a link between doing good and doing well.
“The key to a good CSR program,” Ranada reveals, “is to adopt a value-driven approach versus the traditional performance-driven approach. There has to be a business case—hindi lang basta tapunan ng pera. CSR isn’t just viewed now as a risk mitigation play. It has to be a good play as well and contribute to the bottom line.”
In the Philippines, a pioneer of the shared CSR effort of driving both social change and meeting the bottom line is Hitachi’s HYLI program, which taps into the primer the Philippines (and Asia) gives to education. “Whereas in the United States CSR has a lot to do with product quality and safety, here in the country a lot of it has to do with community outreach with a primary focus on education,” Ranada points out.
HYLI, Hitachi’s 11-year CSR program, provides a unique platform for potential Asian leaders to discuss and have a healthy exchange of ideas on pressing issues in the global arena. Seven participating countries send four of its best university students to the HYLI conference, where solid relationships are built among the participants touted to be the future opinion leaders of Asia.
“True to our corporate statement of ‘Inspiring The Next’, HYLI continues to aid in the development of student participants in understanding regional and global issues,” shares Hitoshi Goto, general manager of Hitachi Asia Limited Philippines. “We encourage Filipino and Asian youth leaders to become proactive in their advocacies, and HYLI is the best venue to help further their growth.”
With Asia’s role in the global arena becoming more pronounced, HYLI raises the youth’s awareness regarding the most pressing issues in Asia by allowing university students to take part in forums, panel discussions and community activities.
“If you’re a student in a university, you aim to shine in your class,” starts Nicole Villarojo, a former participant of HYLI and now a brand manager in Procter & Gamble, “a smaller group of students would dream of making their university better, while an even smaller group of people would want to get out of the university and dream about what they can do for their country. But what HYLI provided was a venue for us to dream for Asia. It’s a very powerful platform for us to dream big.”
Other CSR efforts that successfully marry social impact and the bottom line is BPI and Globe’s “Globe Banko” initiative. A microfinance bank that uses mobile phone technology to serve low income groups in the Philippines, the program not only gives both BPI and Globe added business— “They ’re now getting the CD markets which are very important markets in the Philippines,” points out Ranada—it also created social impact.
Such is the case for Manila Water’s flagship pipe-laying project for low income communities as well. “People thought it wouldn’t work, that low income communities wouldn’t pay for piped-in water,” shares Ranada, “but it did work! And the project has generated 1.6 million additional customers for the company. These are examples about this trend toward CSR contributing to the bottom line of companies, and around the world that’s what CSR programs are gearing towards already. So to end, CSR is universal but it’s also very local, and it’s growing upwards.”
Published in the Business Agenda section of Manila Bulletin, August 1, 2011