Grow Your Business

Many corporations are integrating corporate social responsibility or CSR into their business strategy to give something back to the community. According to business consultant Efren Cruz, CSR encompasses the obligations and responsibilities of business to society, and that in the pursuit of the profit motive, its corporate acts and strategies should include committing itself to protecting the environment, upholding workers’ rights, and improving the quality of life of its community and the society at large.

CSR gained momentum in the last decade as consumers, the media, activists, and various groups started demanding that companies contribute to the betterment of society. “Businessmen must accept that they have an obligation to society in the same level as politicians,” says Cruz, author of Setting Frameworks: Family Business and Strategic Management. “This demand is based on the fact that businesses are now institutions as powerful as governments.”

Indeed, the business sector plays a big role in determining wages and commodity prices, among other things, but it has frequently been criticized for contributing to air pollution and environmental degradation, among other sins. Cruz says the business sector is obliged to help protect the environment, ease poverty and unemployment, support education and the arts, finance basic research, and contribute to urban planning and development—areas that used to be the government’s sole domain. “The doctrine of corporate ethical behavior and social responsibility states that in the pursuit of a reasonable return on investment, business firms must behave as good citizens,” says Cruz.

Still, it’s not solely the big corporations that must commit to CSR. “You don’t have to be big to practice social responsibility,” says Tita Datu-Puangco, head of Ancilla Enterprise Development Consulting. “A [small or medium enterprise’s] most important responsibility to society is providing quality products and services and continuing to improve that quality.” Indeed, small and medium enterprises have a big role to play in developing society because they make up 99.6 percent of all businesses in the country, contribute 32 percent to economic output, and employ 69.9 percent of the labor force.

On the other hand, what does a company gain from practicing CSR? Here are several:

• Reputation and brand enhancement. A company’s brand and reputation are greatly influenced by public perception. According to the 25,000 people across 23 countries who responded to The Millennium Poll on Corporate Social Responsibility, they form their impressions of companies by focusing on corporate citizenship, and two out of three prefer companies that go beyond making money and contribute to the broader goals of society. This means a company that makes environment-friendly products or supports community events is likely to win public approval.

• Tax benefits. There is no such thing as a totally altruistic motive for charity, according to Puangco. Most companies practicing CSR are motivated by the tax breaks they get from it. “That is not exactly wrong: that you can combine tax breaks and projecting a good image by alleviating the needs of the underprivileged.”

• Employee satisfaction. Employees are motivated when their company stands for something. “When people are inspired, they naturally produce excellent work,” says Puangco. “But more than that, when a company does the right thing for society, its employees are motivated to do the same.” Moreover, a company that contributes to society attracts the best talents.

• Investment generation. The rapid rise of socially responsible investments illustrate that investors consider a company’s corporate citizenship, among other things, to decide whether or not to invest in it. Incorporating programs such as community events, environmental and educational projects, product safety, and other CSR initiatives into your business practice generate investor confidence.

MONEY ISN’T EVERYTHING
Not all companies have the money to funnel into CSR initiatives, but CSR is not all about money. If you’re a small or medium company without much financial clout, you may start with small projects. Consider doing the following:

• Network with like-minded businesses to learn about their CSR programs and to know what worked and what didn’t.
• Partner with other organizations to co-sponsor community work or to support the programs of institutions like World Vision.
• Contact business organizations to learn what events they support and how your company may contribute to any of these.
• Solicit employee suggestions on CSR initiatives.