NOVEMBER 11, 2015: FINANCIAL EXPRESS
Corporate Social Responsibility or CSR indicates a company’s sense of ecological and social responsibility towards the community and environment in which it operates. In other words- CSR is corporation’s initiatives to assess and take responsibility for the company’s effects on environmental and social wellbeing that expands responsibilities from a focus on stakeholders to include philanthropy and volunteering.
CSR may also be referred to as “corporate citizenship” and can involve incurring short-term costs that do not provide an immediate financial benefit to the company, but instead promote positive social and environmental change in the long run. Companies demonstrate this citizenship through their waste and pollution reduction processes, by contributing educational and social programs and by earning adequate returns on the employed resources through proper HR practices and employee development program.
Bangladesh has boundless opportunities to be transformed into a country of higher-middle-income from a country of lower-middle-income. Still we have many hurdles to overcome though various socio-economic indicators show that we are comparatively better than that of our neighboring countries. Until the government becomes solvent the financial institutions and corporate sector should come forward with their full-flagged CSR practices.
The corporate world in Bangladesh is yet to achieve global norms in performing social responsibilities compared to their capability and solvency. CSR is largely practiced by the banking sector in the country and their practice is still largely focused on Corporate Philanthropy, such as donations and community investment which is only a part of CSR. But recently they started considering CSR as an effective tool to economic, legal, ethical and philanthropic development. This practice has significantly improved their business and at the same time inspiring corporate sectors and many other profitable national and multinational companies to engage themselves in CSR practices. But only a few years back it was an outcome of an obligation imposed by the regulatory authority.
In 2008 Bangladesh bank took initiatives for formalizing CSR in the country’s banking sector and issued a detailed directive titled “Mainstreaming CSR in banks and financial institutions in Bangladesh”. The priority areas as indicated by the Central Bank in the field of CSR include self-employment, financial inclusion, and small and medium enterprise(SME) credits designed to create productive new on-farm/off-farm employment, financing of biomass processing plants, solar panels, waste recycling plants, effluent treatment plants(ETP), relief and credit programs to the people affected in natural calamities, like Sidr and Aila, credit programs for diversified production of crops, oilseeds, spices, vegetables, fruits and so on. Under this detailed directives the banking sector is gradually making themselves engaged in most of the above CSR practices.
A recent research work conducted by “Safety and Rights Society” that aimed at assessing the effectiveness of Corporate Social Responsibility (CSR) practices of some local and foreign companies operating in Bangladesh found the following facts:
- Most of the companies do not follow any CSR guide line, policy or advice from any CSR consultation center of Bangladesh. Most of them simply do some philanthropic activity and declared that as CSR activity. Only two companies consult with CSR Center and two other companies follow their parent organization’s guide line for their CSR activities.
- Most of the companies were hesitant to report their yearly CSR Budget in their annual report. Only four companies present their amount of financial aid for CSR activities to their Annual Report.
- Many companies do not respond to certain obligations on employers in relation to Canteens, Shelters, Rooms for Children, Compulsory Group Insurance imposed by Bangladesh Labor Law 2006.
- Some of the companies engage in in-house charitable works, such as by providing donations or in-house training programs.
- There were few companies who have separate units or department for CSR activities.
- The primary target of CSR efforts for most businesses is underprivileged children of the society, mainly in the form of financial assistance towards medical treatment.
- Some companies have a preference to financially assist their employee’s children’s education purpose.
- Some companies are interested to donate in Art, Cultural and Sports sector.
All of the above findings are not satisfactory at all and show the unplanned, unorganized and limited CSR practices of the corporate sector in Bangladesh. But in order to ensure global norms in CSR practice in Bangladesh both by the financial institutions and corporate sector the government and all of its concerned bodies should ensure the labor rights practices, environmental management and transparency in corporate governance. At the same time they have to ensure the enforcement of existing laws and adequate pressure from civil society and interest groups like Consumer Forums.
But the big corporation and the manufacturing companies should come up largely with CSR as corporations can have enormously detrimental effects on the environment and neighborhood. Severe water pollution by textile, knitting, dyeing, garments and leather processing industry in Bangladesh are some of the most conspicuous examples. Pollution is getting worse due to lack of proper monitoring, supervision by the controlling authority, corruption, nepotism and enforcement of law. But CSR practice of those industries in return is very much frustrating. Industries as varied as chemical manufacturing, mining, agriculture and fishing can do permanent damage to local ecosystems. Climate change can also be attributed in large part to corporations. It is difficult to deny that many corporations are gaining huge profit from the deterioration of the local as well as global environment.
Strong financial base and influence make large companies irresponsible to inflict damage on people and the environment. But applying the same money and influence they could effect positive change in the society through practicing full-fledged CSR. Companies can also use their influence to pressure governments and other companies to treat people and resources more ethically.
Companies can also invest in local communities in order to keep aside the probable negative impact generated from their operations. A natural resources firm, like coal, gas explorer and power companies that begins to operate in a poor community might build a school, offer medical services or improve irrigation and sanitation equipment. Similarly, a company might invest in research and development in sustainable technologies, even though the project might not immediately lead to increased profitability.
Like the Central Bank of Bangladesh- the controlling and the regulatory authority of the corporate sector of the country along with all stakeholders might take some initiatives for formalizing CSR in the country’s corporate sector issuing a detailed directive so that they become bound to start a full-fledged CSR practices in the country. The corporate sector in this regard should come forward through creating a CSR policy and guidelines, initiating awareness building program, ensuring Worker’s Rights, building capacity among the concerns, sharing research and information on CSR, initiating corporate CSR strategy by the company itself, making stakeholder engagement through effective communication with them, formulating performance management and governance, maintaining disclose of CSR engagement to the public. The regulatory authority should also make it sure that higher educational institutions involved in business administration have a module in the courses dealing with CSR activities.
Engagement of the corporate sector of our country in full-fledged CSR would be useful in the long run, not only for improving corporate governance, labor rights, work place safety, fair treatment of workers, community development and environment management, but also for industrialization and ensuring global market access.
© Copyright: Reserved by the writer (Noore Alam Siddiqui)
