Corporations and their Social Responsibility

Most people, when they think of business, think of money. After all, whether they started the business as wide-eyed dreamers hoping to change the world with their invention or as practical, skilled individuals who saw a way to use their expertise and be their masters, the bottom line will always be about money.

However, once a company is born, it comes with certain social responsibilities. Corporate Social Responsibility (CSR) or Corporate Citizenship (CC) has four main areas: economic aspects, legal aspects, ethical aspects, and philanthropic aspects.

The economic aspects are tied to the bottom line of business. Maintaining strong economic interests is important for a business to continue to operate. A company needs to be profitable and must provide value to its shareholders.

Companies also must follow all the laws of the country and those applicable to their business at all levels. An example of this legal aspect is that a company should follow policies on returns and refunds. Every person has the right to expect quality products. The company is obligated to take the appropriate action if a customer wants to return a defective good. Please note that it is the responsibility of the buyer to prove it was defective upon purchase.

The ethical aspects are where the opportunity a company can show that it goes above and beyond the legal demands of its business to meet and exceed the expectations of the community. The phrase “moral obligation” is perhaps the most familiar to people. This is where people look at the values of a company. The word fair is often applied in this aspect—fair trade, fair practices, etc. It looks at how a company sees itself as part of a community. For example, a company should be aware of the impact their manufacturing and disposal process can have on the people and the environment. They should take steps to avoid damaging the environment.

With great wealth, comes great responsibility. Society expects businesses to use a portion of what they make in philanthropic activities. Through acts of charity, they are expected to help improve the overall situation of their community. Companies are expected to share some of their money and/or goods to give back to their community such as during disasters. Many companies, such as SM, also choose to look beyond the immediate needs and help pave the way for future generations in the form of scholarships that will allow future leaders and thinkers of our business community, industries, and country to excel.

Why do corporations do CSR activities? One of the country’s most active CSR organizations, the Philippine Business for Social Progress (PBSP) reports that the status of companies that exercise their corporate citizenship and actively hold CSR activities are much higher in the eyes of their consumers.

By supporting these companies, the consumers feel that they play an active part in helping their community with each product or service they purchase.

This high regard impacts the company in several ways. First of all, it helps the company make a profit. The more people buy, the more money the company makes, and the more they can give back.

Second, it makes a company more attractive as an employer. People want to work for a company that is ethical and shows that it cares about more than just its financial well-being. This can help a company meet its human resources needs.

Third, communities that have benefited from CSR activities such as livelihood programs can become future suppliers, and provide products that meet a standard that the company set through their teaching.

These same communities also provide free advertising for these companies. With every story of goodwill that they share, they increase the number of people interested to become part of that company, whether as an employee, a partner, or in any other form.

Currently, there is no law in the Philippines enforcing corporate social responsibility. The Corporate Social Responsibility Act (House Bill 9061), principally authored by former President Gloria Macapagal-Arroyo has only been approved on its second reading. This, however, does not mean that the local businesses have been idle or ignoring their responsibilities.

In fact, for many decades, local businesses have done their best to find ways to do more than just give money to society. In the true spirit of Bayanihan, many companies encourage their employees to take part in their CSR activities. For example, The Ayala Group of Companies has a reforestation/ forest protection program that aims to help offset the carbon emission in our environment. Since September 2016, employees from the Ayala Group have planted a total of 700 trees in Pagudpud.

A favorite CSR activity is organizing a fun run. It is a healthy and hopefully exciting event that also allows the different members of the community to take part. The company sponsors the materials needed. The employees provide the manpower to run the event. Many business partners sponsor prizes.

By paying the registration fee, anyone who chooses to participate helps to raise funds for the company’s chosen charity or cause.

There are many examples of local businesses actively, and sometimes quietly, practicing their Corporate Social Responsibility. What are your favorite CSR activities? Which CSR activities would you choose or have already chosen to be part of?

Note: This article was previously published in our printed issue of The Corporate Guide and Style for Professionals Magazine.