The private sector have been traditionally engaged in global development efforts through their corporate social responsibility departments, where they earmark part of their budget to help and improve communities they serve or operate in.
India even recently passed a law that requires firms to spend at least 2 percent of their profit on CSR activities. But in today’s rapidly evolving landscape, is doing CSR enough?
Probably not, argue certain development experts and practitioners who push to shift from just CSR to a more sustainable concept called “corporate social investment:” Firms focus on empowering people by making them development partners and not just passive aid recipients.
“It has to be a social investment now, because development, in the long run, will not survive in a sustainable manner on charity alone,” Carl Bautista, Asia-Pacific head of Credit Suisse’s emerging markets credit office, explained during last week’s Gawad Kalinga Social Business Summit attended by Devex.
The finance expert, who currently advocates for wider social impact investing, echoed GK founder Tony Meloto’s belief that the poor are not, by nature, lazy, but they are just disconnected and lacking access to opportunities — something firms and corporations should keep in mind because returns could (and will) be bigger this way.
“People want to get involved, but they just don’t know [the opportunities available],” Bautista said. “This is the way to go. If we can move away from pure charity and instead expect something back, it’s actually a good thing. It makes people work hard for what they’re given and see the value in it and the hard work they have to put up, making development inclusive and participatory.”
He added that making development an “investment” to the poor people also boosts their dignity and purpose because “the money that [they] earned is not actually pity but a value [they] created, [which] generates self-esteem and self-worth for [them] and will actually help [them] strive higher and do better.”
This shift from CSR to CSI also underlines the desire of a company to go beyond just “feeling good” and improving its image in a certain market to actually “doing good” by committing to a community and nation’s development progress.
Nestlé Philippines CEO John Miller explained how currently companies that are “doing good” make a good business case for those operations to thrive, not just economically but socially. By doing good, he said, a firm creates shared value with the people by changing its perspective — looking at people not just as consumers but partners in development progress.
“The greatest good is brought about by investing in people [because it] empowers them. You create shared value,” Miller noted. “[Shared value] is where the business imperative and social needs converge, making the [whole effort] beneficial for both.”
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