from the ground Up

by Jessica Cheam, The Straits Times, Nov 10 2008

Crisis will reveal which companies are really socially responsible

IN THE current economic climate, corporate social responsibility (CSR) might seem like the last thing that would be on the minds of companies now.
But one by-product of the financial crisis will be a separating of companies with real commitment to CSR from the fakes, said the director of Insead’s Social Innovation Centre, Mr Luk Van Wassenhove.
He was responding to a question asked at the Insead Leadership Summit held last Friday at Insead’s Buona Vista campus, on whether the crisis would put the brakes on CSR initiatives by organisations.
CSR refers to a concept where corporations consider the interests of society by taking responsibility for the impact of their activities on individuals and communities, as well as the environment.
The practice has been increasingly embraced by firms around the world as consumer awareness about climate change and social responsibility grows.
“Companies which are really committed will press on with CSR regardless,” said Mr Van Wassenhove. “Consumers can then differentiate firms which are serious about being responsible.”
Lenovo Group’s senior vice president and chief information officer, Mr David Shcmoock, who was on the four-member panel, noted that “smart companies will not put CSR on the backburner, as shareholders’ trust is very important”.
“Not doing what you promise damages your brand with today’s information-savvy consumers,” he said.
President and chief executive of Malaysia’s Petra Group, Mr Vinod Sekhar, added that practising CSR is not only the “right thing to do”, but firms with a good public image often also benefit from a higher price to earnings ratio, boosting their value in the stock market.
The Petra Group recently gave a grant of £1 million (S$2.3 million) to the Royal Society’s South-east Asia Rainforest Research Programme to be disbursed over an eight-year period.
Energy giant Royal Dutch Shell’s executive director (downstream), Mr Rob Routs, said that CSR is something that has to be “put into a company’s DNA”.
“It has to be embedded in all your company’s processes, and managed at the board level,” he said. “When one company in an industry starts doing this, hopefully the rest will follow.”
While the panel noted that firms in Asia might be more concerned about survival than practising CSR, they said CSR is becoming increasingly important for companies – and it goes beyond just “giving cash” back to society.
Insead’s Mr Van Wassenhove said CSR is “just good business practice”, and if nothing else, helps firms attract good talent.
“The younger generation in the workforce will increasingly look for firms that not only make money, but also contribute to society,” he said.
The summit brought together 300 global business leaders, government officials and academics on the theme: Is Asia Riding – Or Writing – The Future.