Corporate Social Responsibilitya Necessity not a Choice

Hammad Siddiqui

Senior Program Manager

Center for International Private Enterprise

Outline and Possible Takeaways

Outline: Term CSR Difference between CSR,

Philanthropy/ and Charity Business Case for CSR

(Competitive Advantage and 3BL)

CSR initiatives by multinational companies

CSR initiatives by Pakistani companies

What is not CSR

Takeaways: Differentiation between CSR

and Philanthropy CSR vision of multinational

and local companies. Challenges in developing a

vision for effective CSR in Pakistan

Charity vs CSR

Charity is giving without any long-term view

CSR is a vision

to bring sustainable change in the society

Friedman’s thin ethics

“there is only one social responsibility of business – to use its resources and engage in activities designed to increase its profit so

long as it …engages in open and free competition without deception or fraud.”

Milton Friedman 1970

Ford’s Vision

“The terms of the contract between industry and society are changing …Now we are

being asked to serve a wider range of human values and to accept an obligation to

members of the public with whom we have no commercial transactions.”

Henry Ford II, 1969.

Competitiveness

Competitiveness comes with effective use of labor, capital and natural resources to produce high quality goods and services at a price acceptable in the marketplace:

Educated/skilled, healthy and motivated workforce Recycling, reduced emissions, energy efficiency Strong partnerships, trust and credibility

Competitive Advantage

Business ethics is a key factor for recruiting and retention.Businesses satisfying the global demand for more ethical production and delivery are best placed to capture the international markets.Responsible Businesses are likely to remain competetive in challenging business environment.

Triple Bottom Line

Managing resources and its impact in anenvironmentally friendly, socially responsible

and economically wise way

‘maximization of social, environmental and economic performance’

People - Planet - Profits

If a Company is:

Taking care of environment Respects human rights and human values in

the workplace Transparent and follows fair trading practices Makes ethical investments

It is a responsible company

Motivational Factors

KPMG's International Survey of CSR Reporting (2005). This report surveyed more than 1,600 companies worldwide and documented the top ten motivators driving corporations to engage in CSR for competitive

reasons.

1. Economic considerations2. Ethical considerations3. Innovation and learning4. Employee motivation5. Risk management or risk reduction6. Access to capital or increased shareholder value7. Reputation or brand8. Market position or share9. Strengthened supplier relationships10. Cost savings

Discussion on CSR Initiatives from Multinational companies in Pakistan

Local Companies – Are they really in CSR Business?

Pakistan State Oil(Environment, Education, Transparency)

Bank of Punjab(Economic Development, Agriculture)

Crescent Steel and Allied Products(Education, Healthcare)

Hewlett Packard H-P Way

Being sensitive to the needs and interests of the community; its means applying the highest standards of honesty and integrity to all our relationships with individuals and groups; it means enhancing and protecting the physical environment and building attractive plants and offices of which the community can be proud; it means contributing talent, energy, time and financial support to community project.