CSR, Singapore-style: An untapped business strategy?

Can CSR be a business strategy to grow the business? The answer seems to be yes, according to a recent report from Nielsen.

A global average of 55% of respondents in Nielsen's corporate social responsibility survey said they were willing to pay extra when companies are committed to positive social and environmental impact. Respondents in the Asia-Pacific region were most willing to pay more for products with social-good benefits, surpassing the global average at 64% (up from 55% in 2011). European respondents seemed the least willing, at 40% (though, that figure still indicates an 8% increase from 2011).

To many companies in Singapore, the term Corporate Social Responsibility (CSR) has come to imply that a company has societal or environmental obligations that somehow must be entirely separate from its obligation to make a profit. That “de-linking” of what should be entwined business imperatives can create a number of issues.

For some organisations, CSR is an arm’s-length reaction to the need to balance the scales of profit and growth with a sprinkle of doing good. It is considered an add-on, an offset, a risk management tool – rather than an important contributor to reputation and, ultimately, profit.

Very often, the people charged with managing a company’s philanthropic initiatives aren’t considered an integral part of the leadership team; rather, they are perceived as the politically correct, socially-conscious alter egos of the people who do the real business of the company. That is unfortunate.

Instead, what businesses should be focused on is their overall “Corporate Responsibility”. CR encompasses CSR, but recognises that it’s part of something much more viable for the organisation.

What does that mean? Some organisations in Singapore toe the line about the triple bottom line – people, planet, profit but do not necessarily walk the talk. The truth that dare not be spoken is that the profit piece is the priority one. But what’s important is that the other two should be considered in the context of how you make your profits, not how you spend them.

At its best, societal alignment through CR is about shaping a company and its actions based on a deep understanding of the values and expectations of your stakeholders and then engaging with those same stakeholders to generate or protect profits.

Just last week, Starhub unveiled an initiative empowering its customers to contribute to society. Customers will be able to pledge unused talk-time, mobile data, and SMS for selected charities and other worthy beneficiaries. Starhub has partnered with several NGOs including AWWA (Asian Women’s Welfare Association), CPAS (Cerebral Palsy Alliance Singapore), ISCOS (Industrial and Services Co-Operative Society), SAVH (Singapore Association of the Visually Handicapped), and SPD (Society for the Physically Disabled) to implement this plan.

In this initiative, Starhub is just the enabler and the customers are the philanthropists. The beauty of this initiative is that it can be sustained even if a serious financial crisis or downturn in business occurs. In its most impactful form, CR is about a much broader set of stakeholder needs and expectations than definitions of “CSR” typically convey.

Undertaking corporate philanthropy on the one hand but failing to address core supply chain sustainability issues on the other will not build profits. Having “green” products does not count if they’re produced by underpaid workers. Engaging with NGOs is meaningless if it compromises your ability to contribute to the national development agenda in Singapore and in the countries where you operate – and so-on.

CR activities have to serve the real bottom line, not be a by-product of it. There has to be a fundamental business reason underpinning societal alignment through CR. If there is not, those activities in and of themselves will not be sustained. Yet even for the best-intentioned business, it’s the kind of spending that will get cut first when belts need tightening – because there’s rarely any business imperative involved.

What’s critical, therefore, is to establish that point where an organisation’s obligation to its stakeholders can intersect with a societal need; where corporate assets can be put to work for the community in a sustainable way but with no hint of embarrassment that, ultimately, there might be some payback for the company. If the question is “should companies use their profit to make a difference or should they profit by making a difference?” then the answer can be “both."