Strategic CSR | Inquirer Opinion
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Strategic CSR

The AIM Ramon V. del Rosario Sr. Center for Corporate Social Responsibility started organizing 10 years ago an annual conference on corporate social responsibility. This conference is now more widely known as the Asian Forum for Corporate Social Responsibility (AFCSR); the venue has been rotated among most of the Asean countries. It was held once each in Indonesia, Thailand, Singapore and Vietnam, twice in Malaysia, and four times in the Philippines.

The AFCSR is the largest and longest-running annual gathering of CSR practitioners in the region. In 2011, more than 500 participants and speakers from 31 countries attended the conference in Manila. This year it will again be held in Thailand, in the second half of October.

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Through the years, the extent of acceptance and practice and the depth of understanding of CSR have grown tremendously. At the start, many wondered what it was all about. Thereafter, the questions were: Why CSR? Is it needed? What value does business derive from CSR activities? Isn’t it just a duplication of the public relations activities of a business?

Today, the understanding of CSR has moved on from philanthropy to many other forms of the concept. Many of these other forms have been presented as best practices in various sessions of the AFCSR. It is now accepted that CSR must provide value to both business and society.

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The current concerns of CSR practitioners have to do with the development of strategy and implementation of CSR programs. Two of my colleagues, Franky Roman and Maya Hererra, have developed a manual to help practitioners develop a strategy for CSR. The general idea is to identify the social issues that obtain in the environment of a company or organization and then match these up against the resources and skills of the organization. In this manner, CSR becomes strategic. This process also ensures that CSR programs yield benefits both to business and society. It augurs well for the sustainability of these programs.

Herrera and Roman elaborate on this process in their manual:

“CSR can be aligned with the business when programs are developed and implemented while taking into account the goals and resources of the enterprise as well as the reality of its business situation. CSR can also be fully embedded in corporate strategy and operations. This involves ensuring that all of the corporation’s philosophies, goals, strategies and activities take into account the company’s impact on its stakeholders, the environment and society as a whole.”

“Developing a CSR strategy begins with evaluating the enterprise in a business context that includes both market and non-market environments.”

“Understanding the market environment includes evaluating the customer market as well as competition. Understanding the non-market environment includes understanding both the company’s footprint as well as the stakeholders that the company interacts with. The ‘footprint’ refers to the impacts of the company’s operations on its stakeholders, the environment and society in general. For example, factory emissions affect local air quality and factory work schedule may upset local social culture and norms.”

“Ideally, CSR initiatives would minimize the footprint’s negative impact and maximize positive impact.”

“Analysis of the corporate footprint also helps the enterprise to identify relevant stakeholders.  Stakeholders are internal and external individuals, groups and organizations with a legitimate concern about and with influence over company operations. They include those who are directly or indirectly affected by company operations, those who have an interest in protecting those who are affected by company operations, and those who have a general interest in moderating or policing corporate behavior in the areas of operations or impacts of the company.”

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“On the one hand, the company must evaluate its market, its footprint, and its stakeholder in order to identify critical footprint and stakeholder concerns, in addition to market realities. On the other hand, the enterprise also needs to evaluate its key assets and capabilities in order to understand which issues and concerns it is in the best position to address relative to capabilities of the other players and stakeholders. This provides a basis for prioritization as well as helps the company identify potential areas of cooperation. On the one hand, the approach focuses on the firm, its key priorities and how to best utilize its capabilities for creating positive impact. On the other hand, the analysis should also uncover options on how to best allocate capabilities among different players in order to create the optimum outcome or all.”

“Ideally, the CSR strategy would be formulated within a larger corporate strategy that is based on a realistic foundation of long-term enterprise sustainability. For instance, a company that sustains losses each year cannot be a strong long-term partner in addressing social objectives.”

“Finally, a strategic approach to CSR must involve a ‘fit’ with the organization’s vision, mission and core values (VMV).  An evaluation of the firm’s VMV helps in prioritizing footprint and stakeholder issues. A failure to link CSR philosophy and policies with VMV could result in the marginalization of CSR within the organization. For some companies, the reevaluation of the new realities of the global markets have, in fact, resulted in a reexamination of corporate VMV and a revision of VMV in order to reflect the new realities of the increased importance of non-market factors. ”

Felipe B. Alfonso is the vice chair of the AIM-Scientific Research Foundation and the AFCSR executive director of the Asian Institute of Management Ramon V. del Rosario Sr. Center for Corporate Social Responsibility.

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