Good works

Corporate Philippines seems to be taking its social responsibility seriously.

Business leaders now express their companies’ commitment to social development in their core business principles and practices. These leaders set the strategic direction of their companies’ corporate social responsibility, often by creating foundations or a special division dedicated to improving their relationship with key stakeholders.

This renewed interest in corporate social responsibility has led companies to look for creative and innovative ways to do good not only in their areas of expertise. Projects like Habitat for Humanity, Tabang Mindanaw and Children’s Hour have involved different, sometimes competing, companies for a common cause.

Moreover, companies choose to support or develop projects that bring sustainable development. There’s Pilipinas Shell Petroleum Corp., which provides skills training and financial grants to enhance entrepreneurship in local communities. And there’s Metrobank Foundation, which offers scholarships and grants for college students training to become teachers, engineers, and nurses.

The active involvement of the private sector in social development has led government to open opportunities for businesses to extend their projects nationwide. One such example is its poverty alleviation program, Kapit-Bisig Laban sa Kahirapan or KALAHI.

Greater impact

Beyond providing one-time donations of funds and services, KALAHI allows businesses to come together to create a greater impact on the community. In one case, several Ayala-owned companies recently adopted an urban poor community in Mandaluyong City which KALAHI identified as a critical area. By pooling their resources and expertise, these companies increased their capability to address the various needs of the residents.

For instance, Ayala Land, Inc. and Globe Telecom, each with community development projects of their own, have pledged to conduct year-long medical and dental missions in the barangay. Ayala’s utilities arm, Manila Water Co., is providing legal water connection and is constructing a small sewerage treatment plant. The Bank of the Philippine Islands and Ayala Foundation, Inc. brought their experience in micro-financing and entrepreneurship training and contributed to a revolving livelihood fund for families. The group also donated a computer laboratory to a local high school, with Globe providing free Internet access and AFI a training program for teachers.

"Social responsibility projects are part of the Ayala business. We recognize the role of the private sector to work hand in hand with government to help uplift the lives of Filipinos. We realize that business is there not only to increase its value for its stakeholders but also to give back to its community," said AFI president Victoria Garchitorena.

Benefits

But do businesses gain anything for being good corporate citizens? Yes, and no. Various studies show that corporate social responsibility will only affect the bottom-line if it is part of a clear business strategy. After all, the first contribution of businesses to national development is by being good, responsible businesses.

At the World Economic Forum early this year, an Arthur D. Little study showed that companies that take corporate citizenship seriously not only improve brand equity and operational efficiency but are also more likely to be seen as a good investment and company of choice by investors, employees, customers, regulators and joint venture partners.

Another study by two Harvard professors revealed that "stakeholder-balanced" companies enjoy better financial returns through good corporate reputation.

"Corporate citizenship fosters public good," said Pedro Roxas, president of Central Azucarera de Don Pedro and a member of the board of trustees of Philippine Business for Social Progress, at the Asian Forum on Corporate Social Responsibility. He also cited ways that corporate citizenship can directly benefit businesses such as good corporate reputation, reduced risks, access to human and intellectual capital, and a favorable business environment.

Also speaking at the Asian Forum, Garchitorena said that good investments in society will indirectly redound to the good of the company. For instance, investments in education mean a better pool of future employees and investments in micro-credit mean a greater consumer base to sell one’s products to. In the long-term, investments in housing or health can bring about less discontent and, therefore, more peace and order, which brings about economic and political stability so that businesses can better flourish.

As emphasis on business accountability and transparency grows, firms that meet society’s expectations are favored over those that fail in corporate citizenship. By working closely with government, host communities, civil society, and other businesses in addressing social issues, local companies acknowledge that business success is intertwined with their commitment to bring economic, social and environmental value to society.