Reforming CSR policies for sustainable growth

Corporate Social Responsibility (CSR) in Bangladesh has largely been driven by private company owners motivated by a personal desire to give back to their communities. Even though it is not always termed 'CSR,' it has resulted in various efforts in healthcare, education, and emergency responses. However, there are significant shortcomings that remain, with the two main ones being the geographical concentration of activities and the lack of a cohesive approach to such interventions. There is a need to review current practices for national alignment and establish a more impactful framework.
Corporate-initiated development efforts in Bangladesh have seen considerable evolution. Especially multinational and large corporations have incorporated philanthropy into their operations, supporting initiatives such as donations, scholarships, community development projects, and climate action solutions. However, the initiatives remain mostly voluntary, except in the financial and banking sectors. Bangladesh Bank has played a pioneering role in promoting CSR by issuing guidelines that focus on allocating resources to healthcare, education, disaster management, and environmental priorities. The updated guidelines of 2022 stipulate that at least 30 per cent of CSR funds be directed to healthcare, 30 per cent to education, 20 per cent to environmental and climate change initiatives, and the remainder to areas such as disaster management. However, outside the companies that fall under BB directives, such development efforts are often fragmented and driven by personal or institutional preferences.
In the last decade, Environmental, Social, and Governance (ESG) considerations have become integral to modern corporate strategies, as they provide a broader framework for responsible business practices. Unlike traditional CSR, ESG embeds sustainability and ethical governance into the core operational and decision-making processes of organisations. While the term surpassed CSR in 2021 and has somewhat fallen out of fashion in the West, it has yet to gain a strong foothold in Bangladesh.
One of the most pressing challenges in the current landscape is the geographical concentration of activities. CSR efforts are often focused on regions where business owners have personal or professional ties, leading to some areas receiving more investment than others. This has resulted in significant imbalances, leaving underdeveloped and remote regions overlooked.
Another issue is the lack of coordinated efforts among different stakeholders. In the absence of a coordinated framework, initiatives tend to be short-term and ad hoc, focusing on immediate philanthropic goals rather than addressing structural challenges (i.e., project-based rather than program-based). For example, while scholarships and healthcare camps are common initiatives, they often fail to address the underlying issues, such as inadequate infrastructure in education or the need for sustainable healthcare systems. Such a fragmented approach diminishes the fund's ability to create systemic change.
These activities in Bangladesh are often spread too thinly across a wide range of sectors without clear prioritization. Critical areas such as renewable energy, healthcare infrastructure, and skill-based education-which have the potential to drive transformative change-are not prioritised enough. Companies may fall into the trap of reporting larger numbers rather than sustainable impacts, which can be more difficult to assess.
A comprehensive national CSR policy, developed in consultation with practitioners and experts from a diverse range of fields, is essential. Such a policy should provide clear guidelines for companies across all sectors, defining the scope of these activities and ensuring their alignment with national development priorities and the Sustainable Development Goals (SDGs). The policy would help provide strategic direction and consistency in implementation across industries. Such initiatives can be piloted with the top-earning MNCs and domestic companies first. Ensuring the effectiveness of corporate involvement also requires the establishment of proper monitoring and reporting mechanisms. Companies should be mandated to report their CSR activities in a transparent and standardised manner, similar to the requirements imposed on banks and financial institutions by Bangladesh Bank. However, it is essential to counterbalance the new authority granted to the government with clearer accountability to the people, to ensure that philanthropic funds do not end up in the coffers of those close to power.
Incentivising the geographical diversification of activities could be an effective way to address regional disparities. Fiscal measures such as tax rebates for projects in underdeveloped regions could encourage companies to expand their efforts to areas that have traditionally been overlooked.
Additionally, prioritising high-impact sectors is crucial. Directing resources towards areas such as education, renewable energy, and healthcare infrastructure can help corporate social initiatives contribute to long-term systemic change. This can be done in line with national development plans.
Lessons from global practices offer valuable insights for improving the landscape in Bangladesh. India mandates that companies allocate at least two per cent of their net profits to community development activities, with an emphasis on alignment with national development goals. South Africa integrates these contributions into annual financial disclosures, enhancing transparency. In China, fiscal incentives encourage projects that promote environmental sustainability. These examples demonstrate how policies can create synergistic impact at a larger scale.
Even though there is no shortage of good intentions, the CSR landscape in Bangladesh requires a strategic overhaul to address its pressing challenges. A national policy framework to promote geographic and sectoral diversity in line with the country's development priorities could unlock tremendous potential for everyone involved. Focusing on high-impact sectors, providing the right incentives, and implementing a proper monitoring and reporting system will act as multipliers.

The writer is a development professional and artist. He can be reached at [email protected]