The Dawood Group
In your opinion, what is true CSR? Or what is an understanding of sustainable practices within your sphere?
CSR has been made synonymous with corporate philanthropy (CP) in peoples mind whereas it is about sustainable development in the key areas of social, environment and economic well-being of organizations and societies at large.
As economies globalize, new opportunities to generate prosperity and quality of life are developing but these positive improvements are accompanied with new risks to the stability of our environment and the continuing burden of poverty and hunger on millions of people. This paradox of advancement and poverty is the challenge for the 21st century.
The key challenge of sustainable development is that it demands new and innovative choices and ways of thinking.
While developments in knowledge and technology are contributing to economic development, these developments also have the potential to help resolve the risks and threats posed to the sustainability of our social relations, economies. New knowledge and innovations in technology, management, and public policy are challenging organizations to make new choices in the way their operations, products, services and activities impact the earth, people and economies.
These emerging challenges are forcing organizations to maintain transparency in their operations.
With developments like the FTSE Sustainability Index, language which ‘corporate types’ understand, will, in time lead to people rewarding companies with their purchasing power.
The investor of the future will look for companies who, besides giving them profit, are also transparent in their operations and plan to grow in a sustainable manner.
What is the logical / valid connection between corporate philanthropy and strategic CSR, in your opinion?
Corporations can use their charitable efforts to improve their competitive context: for example the quality of the business environment in locations where they operate.
Using philanthropy to enhance competitive advantage aligns social and economic goals and improves long-term business prospects. Attending to surroundings enables a company not only to give money but also to leverage its capabilities and relationships to support development causes.
What specific examples can you share from your companies of successful CSR implementation? In these examples, what are some ways, creative and otherwise, that ROI’s (returns on investments) on CSR initiatives have been measured?
Under our business-integrated, corporate philanthropy banner, we are now integrating CP into new businesses, at their inception.
Also, we’ve developed a water conservation system through the use of PVC lining and drip irrigation initiatives that are linked to Engro Polymer’s core products.
In the same category, related to Engro Foods’ core business, we are developing the capacity to enhance milk production in rural Sindh through extension services that focus on improving hygiene, and animal health initiatives.
Under our environment-based initiatives, at the Engro Chemical plant for instance, we have a continuous effort to reduce our environmental footprint. Additionally, we have developed a 2015 sustainability vision for reducing water use, waste generation and reduction of green house gases emission. We have eliminated the use of CFC’s in compliance with the Montreal protocol. We are also actively working on carbon trading opportunities under the Kyoto protocol.
As part of our economic transparency and efficiency drives, our project implementations are open to public scrutiny through environment impact assessment studies.
As far as the ROIs are concerned; for the economic and environment initiatives just shared, the investments are business decisions, and are strictly ROI-based.
What might be your input to the community on effective ways to implement result – oriented CSR programmes that are aligned with a company’s core business?
If CP has to take roots in corporate Pakistan, the alignment with core business is a must. Businesses have to see a gain from the initiatives in the form of expanded markets, brand build-up, supply chain strengthening and so on.
Microsoft and CISCO offer clear examples of integrating CP with their core businesses by investing into human capital through training and development in core IT skills not only to become product users but also to develop skills to sustain themselves in emerging job markets.
I can share a few examples for instance, from Engro on what business alignment could entail. Engro Chemical is investing in agri- extension services and balanced fertilization initiatives. Or Engro Energy is exploring energy conservation projects.
Our challenge as a conglomerate: we are now evaluating how all the above can be combined in a single initiative for synergistic intervention in rural areas.
As chairman of the PPAF, how do you think CSR is viewed (in similarity and in opposition) by the development sector, and by the business sector?
I think trends relating to Social Responsibility are coalescing, but of course, the business and the development sector are approaching it from different directions.
For the development sector, social responsibility is an end in itself. It sees its role as one of reacting and responding directly to human conditions. Development sector organizations are therefore at the vanguard of bringing about change in society’s attitude and (in the West) have an acute understanding of the power of the media and celebrities to accelerate social change.
On the other hand, it is the social environment that prompts and educates acceptable corporate behaviour. Trend-setting corporations now view CSR as a way of differentiating themselves from the competition and are keen and proactive participants in it. They use the media to validate their social responsibility credentials.
Hence, what began as a movement to ensure that corporates managed risk adequately and thus had a license to operate -after catastrophic incidents like Bhopal and Exxon Valdez- is now about attracting human resources and discriminating customers who value social responsibility.
The process is similar in Pakistan as well but is not as advanced or evident on a large scale. There is greater understanding of the issues and hence learning on both sides, which gives rise to collaborative efforts towards the common good.
To me, examples of some of the emerging similarities include:
- the need for implementing change in a sustainable manner;
- the use of micro credit as a developmental tool;
- the use of technology to impact development: telemedicine, and so on;
- a more ‘business like’ attitude towards accountability and efficiency in social interventions, and;
- a greater orientation towards results.