Why corporate social responsibility is profitable

The time is always right to do what is right. — Rev. Martin Luther King, Jr.

Always do right; this will gratify some people and astonish the rest. — Mark Twain

A good company delivers excellent products and services, and a great company does all that and strives to make the world a better place. — William Ford Jr.

First of all, I wish to make a fearless forecast — I believe world economic recovery will start by Christmas. Under President Obama, the US is on the right track, boosting con-fidence and pushing reforms. The world’s other economic giant, China, is already recovering due to its leaders’ bold stimulus program and other proactive initiatives. Let us all continue to work hard and accelerate Philippine economic development.

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This passionate advocate of capitalism is wary of any socialistic forces and tendencies that pressure private business enterprises to open up their coffers for charitable donations. I am not against philanthropy, but I believe businesses should focus more on and be good at their core competencies and primary reasons for existence — to efficiently manage and allocate the world’s scarce resources and priceless human talent in order to generate profits and in the process advance the cause of human progress.

I strongly believe that by being efficient in a vibrant, free enterprise system, entrepreneurs and businesses are in the long-term doing infinitely much societal good. 

What are the civic causes that I believe need more help from businesses’ philanthropy? I urge assistance for widows and orphans, the welfare of teachers, education, medical research, arts and culture, environmental concerns, disaster relief, social justice advocacies, and support for legitimate religious causes.

From a purely pragmatic business point of view, what are ideal rationales for entrepreneurs and companies to undertake “corporate social responsibility” (CSR) programs?

• Enhancing human resources - HSBC Philippines CEO Mark Watkinson recently told this writer at lunch in the Peninsula Manila Hotel: “We call our corporate social responsibility or CSR initiatives corporate sustainability, because we recognize that our financial success depends on our ability to manage and address non-financial considerations. CSR improves employee retention.”

Watkinson added: “We have 2,300 employees from the Philippines’ best universities, 57 percent of them are part of Generation Y, they are young, idealistic and eager to make a difference. They want to have a chance to change the world or else they’ll leave HSBC. Our civic projects offer them the opportunity to make a meaningful contribution to society and they are proud to be part of an organization that supports that mindset. Our soft target is at least one hour per person per quarter for volunteer work.”

Among the HSBC corporate sustainability initiatives that have boosted employee morale and team-building include Project Eco-Kids, with bank volunteers going to 20 public schools like Pembo Elementary School in Makati to educate 20,000 grade school kids about climate change, energy efficiency, waste management and recycling. Another project is HSBC Read With Me, where volunteers go to public schools to conduct an innovative weekly reading program for grade school kids.

A major civic project of HSBC worldwide is Future First, with US$10 million for a five-year program to support outstanding non-governmental organizations (NGOs). Three NGOs in the Philippines were awarded $75,000 each — SOS Children’s Village, Childhope Asia and Philippine Christian Foundation. Since last year, HSBC staff interacts weekly with the kids supported by these winner NGOs, either in Tondo, Alabang or on the streets.

 • Risk management - One of the important corporate priorities is how to manage and minimize risks such as accidents, scandals or other negative crises, which might wipe out corporate goodwill built through many years. CSR projects can boost a company’s image as a benevolent and positive force in society, such as the Bantay Bata and La Mesa Dam environmental projects of ABS-CBN 2, which can help offset controversies like that of the Wowowee stampede. The shipping firm of Sulpicio Lines should undertake CSR projects to enhance its badly battered corporate image and offset any future accidents.

• Brand differentiation - In the arena of business, companies can pull ahead of their competition by using CSR or civic endeavors to differentiate them from their rivals. For example, Jollibee has for years championed civic causes supporting children such as the MaAga Ang Pasko Christmas gift-giving, and the recent successful fund-raising for kiddie charities from the sales of Jollibee stuffed toys. Arline Adeva said Jollibee’s stuffed toy sales for children’s charities was the brainchild of their franchisee and Ateneo Gokongwei School of Management dean, Professor Rudy Ang.        

Another firm using CSR is the manufacturer of Sisters Napkins, which has awarded outstanding sisters or female friends in Metro Manila public schools for outstanding academic and other achievements. Foundation for Adolescent Development (FAD) — a non-governmental, non-profit organization providing education, counseling, and referrals on reproductive health and sexuality for adolescents ages 13 to 19 — told this writer they are partnering with Sisters Napkins for a nationwide educational campaign in public schools, with Sisters Napkins’ endorser actress Maja Salvador.

FAD’s mission is to prevent the problems of teenage pregnancy, alcohol and drug abuse, HIV/AIDS infection, and other problems related to adolescent reproductive health. One of their projects is Dial-A-Friend.

• License to operate - What better way to fend off the predators among our politicos and bureaucrats using taxes and regulations to prey on businesses than to use CSR projects to show the public that the company is a responsible member of society?

An example of this is the Federation of Filipino-Chinese Chambers of Commerce & Industry, Inc. (FFCCCII) now led by flour mill/soybean/sugar mill taipan Alfonso Uy. Out of sincere concern for the chronic classroom shortage and also perhaps to fend off the predator tendencies of traditional politicos, Filipino-Chinese entrepreneurs have donated thousands of public school buildings through the years to poor regions via the FFCCCII’s “Operation Barrio Schools” project.

The FFCCCII’s “Operation Barrio Schools” is the Philippines’ largest ever and also the longest-running private sector support project of its kind for public schools; whether taipans or small traders, they donate numerous public schools with the goal of helping democratize access to public education. Not only have the generous public school donations helped fend off these politicos, progressive political leaders like ex-President Cory Aquino, former Senate president Franklin Drilon and Senator Kiko Pangilinan had even set aside some pork barrel funds for the construction of rural public schools through the Filipino-Chinese business community’s innovative and cost-efficient “Operation Barrio Schools.”

There are so many varied reasons and motivations for entrepreneurs and companies to undertake CSR projects, but the truth is, CSR is in the long run very profitable, not only for the corporate bottom line, but also immeasurably beneficial to our consciences.

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