CSR must start from within
Shayan S. Khan | Wednesday, 23 July 2008
Since the dawn of enterprise, conventional wisdom has drawn a firm line between achieving corporate excellence and providing what may be called merit goods. The returns from providing low-cost education, healthcare, etc., were not deemed high enough for risk-taking entrepreneurs to invest in. Hence, governments stepped in to provide these essential goods and services for the bulk of the population. Similarly, little regard was paid to working conditions, the effects on the environment and the overall impact on society of these entrepreneurs' unbridled quest for profit, and more profit. As recently as the 1980s, Gordon Gekko uttered (on celluloid) the immortal words 'Greed is good', and corporate bosses from Wall Street to Canary Wharf lapped it all up.
Just recently though, one can sense that there has been a shift in the sands. Whereas Gekko's followers once championed greed and the unrelenting pursuit of profit, today they fawn over sustainability and social responsibility. A new breed of consumer prowls the aisles in supermarkets, who cares whether the farmer whose coffee beans they are buying got a fair price for his produce, who is sensitive to whether the cardigan they are wearing was stitched together by a child, and who will possibly prefer a reusable or recyclable bag to carry their shopping home. This new, ethically conscious consumer has in turn forced corporations to take a deeper look at themselves and their own position within the society in which they operate. There is little doubt about the enormous power and influence they exert by dint of their stature. Finally, they have come to realize the great responsibility that comes with this power. Hence the advent of Corporate Social Responsibility (CSR).
It is relatively recently that the term CSR has arrived to encapsulate all the actions that corporations engage in as a way of giving back to the societies from which they reap their profits. These may be termed as their 'external' CSR engagements. However there is much scope for CSR within an organisation as well. These, which may be termed as 'internal' CSR, bring together providing adequate working conditions (including not only the workplace environment, but also working hours that allow employees to maintain a healthy work-life balance), minimising the effect on the environment of an organisation's activities and making sure their supply chain is compliant with global standards of ethical corporate behaviour (again, a quite recent formulation).
It is through this last one that the concept of CSR was first imported to Bangladesh. The 'sweatshop' controversies of the 1990s alerted multinational clothing chains to the often poor working conditions that prevailed in the factories of the Asian nations from which they procured their apparel at astonishingly low prices, and an instant drive was initiated to get these factories in line or stop supplying to the leading international brands who made decent working conditions a necessary condition for supplying to them.
Bangladesh, being a leading supplier to such chains through their RMG sector, started feeling the ripple effects of this newfound ethical code quite early on with many factories closing down as a result of deviation from the stipulated standards. Just recently even, Zara, a leading high-street chain in the U.K, closed down a factory in Dhaka. But the benefits of knowledge-transfer have seen the Bangladeshi RMG sector become by-and-large compliant in terms of their factory conditions. This is one of the reasons why the Bangladesh RMG has not suffered the cataclysmic fate many observers foretold for it in the post-Multi-Fibre Arrangement (MFA) era. Indeed, beyond compliance, Bangladeshi garment manufacturers have been very forthcoming to new ideas to make the workplace experience better for their workforce.
One such idea that was recently tried out with great success was a workplace health programme that had a very positive effect in bringing down absenteeism and staff turnover.
The experiment, which was facilitated by Extending Service Delivery (ESD), a five-year reproductive health and family planning project funded by the USAID, and carried out at a garment factory in Chittagong, proved to be very fruitful as an average of 11 per cent fewer days were lost to absenteeism and staff turnover declined by 43 per cent in the first year of the programme. Worker attitudes also improved significantly as a majority of the workforce reported in a survey following the advent of the programme that the on-site services made them less likely to be absent from work, more likely to stay on in their current job and helped them to harbour positive attitudes towards factory management.
The Return On Investment (ROI) of implementing the programme was estimated to be a very impressive 2.4:1. H&M and KappAhl, two leading European clients for the RMG sector, were very taken by the results of this study and in conjunction with the CSR Centre, decided to disseminate it amongst their supply chain. This was done in a workshop hosted by the CSR Centre and attended by all relevant stakeholders ranging from the supply chain to NGOs concerned with occupational safety. The supply chain reacted very positively to the report, and went away looking to devise ways to implement such a programme in their own factories. The positive reactions were not wholly unexpected, as the Bangladeshi RMG factories have always proved very conducive to new ideas. 'We like to think of Bangladesh as our think-tank country', remarked Viveka Rosberg, Code-of-Conduct Manager for H&M.
Since it has entered the corporate consciousness in Bangladesh, CSR has been widely misinterpreted. Planting of trees, helping out flood victims have all been passed off as CSR when deeper issues lay unmet within the organisation. It shows that they are at least thinking about the debt they owe to the society in which they operate, but to be seriously taken as socially responsible businesses, the Bangladeshi corporate sector must look to fill the CSR gaps within their organisations first.
Hence the importance of internal CSR. Specifically, they must look first at working conditions for their staff and the impact on the environment of the work they do. They will find, as the ESD report did, that the return on investment of such activities can be very rewarding. With the rest of the world moving swiftly to make business responsible, the Bangladeshi corporate sector cannot afford to lag behind in this aspect. And with organisations like the CSR Centre springing up to facilitate their evolution towards social responsibility, we can look forward to a day where corporate excellence and social development go hand-in-hand in Bangladesh.
The writer is Operations Manager, CSR Centre
Just recently though, one can sense that there has been a shift in the sands. Whereas Gekko's followers once championed greed and the unrelenting pursuit of profit, today they fawn over sustainability and social responsibility. A new breed of consumer prowls the aisles in supermarkets, who cares whether the farmer whose coffee beans they are buying got a fair price for his produce, who is sensitive to whether the cardigan they are wearing was stitched together by a child, and who will possibly prefer a reusable or recyclable bag to carry their shopping home. This new, ethically conscious consumer has in turn forced corporations to take a deeper look at themselves and their own position within the society in which they operate. There is little doubt about the enormous power and influence they exert by dint of their stature. Finally, they have come to realize the great responsibility that comes with this power. Hence the advent of Corporate Social Responsibility (CSR).
It is relatively recently that the term CSR has arrived to encapsulate all the actions that corporations engage in as a way of giving back to the societies from which they reap their profits. These may be termed as their 'external' CSR engagements. However there is much scope for CSR within an organisation as well. These, which may be termed as 'internal' CSR, bring together providing adequate working conditions (including not only the workplace environment, but also working hours that allow employees to maintain a healthy work-life balance), minimising the effect on the environment of an organisation's activities and making sure their supply chain is compliant with global standards of ethical corporate behaviour (again, a quite recent formulation).
It is through this last one that the concept of CSR was first imported to Bangladesh. The 'sweatshop' controversies of the 1990s alerted multinational clothing chains to the often poor working conditions that prevailed in the factories of the Asian nations from which they procured their apparel at astonishingly low prices, and an instant drive was initiated to get these factories in line or stop supplying to the leading international brands who made decent working conditions a necessary condition for supplying to them.
Bangladesh, being a leading supplier to such chains through their RMG sector, started feeling the ripple effects of this newfound ethical code quite early on with many factories closing down as a result of deviation from the stipulated standards. Just recently even, Zara, a leading high-street chain in the U.K, closed down a factory in Dhaka. But the benefits of knowledge-transfer have seen the Bangladeshi RMG sector become by-and-large compliant in terms of their factory conditions. This is one of the reasons why the Bangladesh RMG has not suffered the cataclysmic fate many observers foretold for it in the post-Multi-Fibre Arrangement (MFA) era. Indeed, beyond compliance, Bangladeshi garment manufacturers have been very forthcoming to new ideas to make the workplace experience better for their workforce.
One such idea that was recently tried out with great success was a workplace health programme that had a very positive effect in bringing down absenteeism and staff turnover.
The experiment, which was facilitated by Extending Service Delivery (ESD), a five-year reproductive health and family planning project funded by the USAID, and carried out at a garment factory in Chittagong, proved to be very fruitful as an average of 11 per cent fewer days were lost to absenteeism and staff turnover declined by 43 per cent in the first year of the programme. Worker attitudes also improved significantly as a majority of the workforce reported in a survey following the advent of the programme that the on-site services made them less likely to be absent from work, more likely to stay on in their current job and helped them to harbour positive attitudes towards factory management.
The Return On Investment (ROI) of implementing the programme was estimated to be a very impressive 2.4:1. H&M and KappAhl, two leading European clients for the RMG sector, were very taken by the results of this study and in conjunction with the CSR Centre, decided to disseminate it amongst their supply chain. This was done in a workshop hosted by the CSR Centre and attended by all relevant stakeholders ranging from the supply chain to NGOs concerned with occupational safety. The supply chain reacted very positively to the report, and went away looking to devise ways to implement such a programme in their own factories. The positive reactions were not wholly unexpected, as the Bangladeshi RMG factories have always proved very conducive to new ideas. 'We like to think of Bangladesh as our think-tank country', remarked Viveka Rosberg, Code-of-Conduct Manager for H&M.
Since it has entered the corporate consciousness in Bangladesh, CSR has been widely misinterpreted. Planting of trees, helping out flood victims have all been passed off as CSR when deeper issues lay unmet within the organisation. It shows that they are at least thinking about the debt they owe to the society in which they operate, but to be seriously taken as socially responsible businesses, the Bangladeshi corporate sector must look to fill the CSR gaps within their organisations first.
Hence the importance of internal CSR. Specifically, they must look first at working conditions for their staff and the impact on the environment of the work they do. They will find, as the ESD report did, that the return on investment of such activities can be very rewarding. With the rest of the world moving swiftly to make business responsible, the Bangladeshi corporate sector cannot afford to lag behind in this aspect. And with organisations like the CSR Centre springing up to facilitate their evolution towards social responsibility, we can look forward to a day where corporate excellence and social development go hand-in-hand in Bangladesh.
The writer is Operations Manager, CSR Centre