As the year 2022 unfolds, the world continues to grapple with familiar challenges – the continued Covid-19 pandemic, enduring crises of climate change, biodiversity loss, pollution and waste.
Yet, this year could be perfect time to environment concerns, with high-level conferences, symposia, and events scheduled, to help energize international cooperation and collective action.
This year will also mark two golden jubilees. In 1972, the world took up the environmental mantle at the historic UN Conference on the Human Environment in Stockholm. The meeting firmly placed the environment on the priority list of governments, civil society, businesses and policymakers, recognizing the inextricable links between the planet, human well-being and economic growth. Now, fifty years later, the Stockholm+50 meeting in June 2022 will commemorate the event, and reflect upon and move forward.
Experts hope that 2022 will be a year of breakthroughs for the environment.
In line with these world developments in the environment, many companies in the world, and in the Philippines take a second look at how to participate to help control and limit corporate social responsibility programs.
Corporate Social Responsibility redefined
Corporate Social Responsibility (CSR), as defined by the United Nations Industrial Development Organization (Unido), is a management concept in which companies incorporate the addressing of social and environmental issues on their business operations and interactions with stakeholders. CSR issues can deal with environmental management, social equity, labor standards and working conditions, and good governance, among others.
In the Philippines, the birth of Corporate Social Responsibility and its practice can be traced back to the 1960s where companies gave donations in cash directly to foundations and other charitable organizations. It was more confined to philanthropic endeavors or the usual one-time-dole-outs to communities in need. A decade later, many companies have started to initiate CSR activities on education, environment, disaster response and recovery, and livelihood projects or skills building.
Recently, more and more companies are responding to the call to do more meaningful interventions. They have began to mainstream CSR in their business practices for reasons related to business sustainability, stakeholders demands, enhancing competitive advantage, access to new markets and company branding.
Importance of Corporate Social Responsibility hen buying a product, 83 percent of customers are willing to choose ethical goods to prevent environmental damage caused by its production. CSR is about more than social capital or reputation management. It’s also about corporate social responsibility or CSR.
While many benefits exist, the psycho-social benefits of CSR are hard measure. However, the benefits of socially responsible workplaces and sustainable communities can be seen clearly.
There are four main benefits of CSR—community, employee, economic and environmental benefits.
One key benefit is that CSR can help improve the social fabric of communities. Social enterprises bridge the gap between businesses and the nonprofit sector by providing benefits to society at large, while meeting the needs of individual communities.
When employees are included in CSR activities, their experience working for a company that values CSR results in higher levels of employee satisfaction.
Combined with an increase in motivation and empowerment, this leads to more engaged workers who are likely to produce higher quality work.
A company that benefits the local community is at an advantage when it comes to recruiting, motivating and retaining employees in that area. Additionally, CSR benefits may lead to providing opportunitiese for conomic growth for vendors/suppliers and other organizations in the area.
The benefits of corporate social responsibility are also realized by the environment.
CSR helps organizations become more environmentally aware and encourages them to take actions that improve their environmental impact. Many companies have adopted green policies as a result of their CSR initiatives, and some businesses have even gone so far as to create separate divisions that focus exclusively on environmental sustainability.
Different types of CSR
Corporate Social Responsibility is based on these four tenets:
Ethical, philanthropic, environmental and economic.
Ethical responsibility is about looking after the welfare of the employees by ensuring fair labor practices for the employees and also the employees of their suppliers. Ethical labor practices for suppliers mean that the companies will ensure the use of products that have been certified as meeting fair trade standards. Ensuring fair labor practices for employees means that there will be no gender, race, or religious discrimination among the employees and each employee will be given equal pay for equal work and better living wage compensation.
Philanthropic responsibility means serving humanity. This is one criteria that pays attention to the well-being of the underprivileged or needy people who badly require our support to sustain themselves on this planet. Companies fulfill their philanthropic responsibility by donating their time, money, or resources to charities and organizations at national or international levels. These donations are mainly given to a variety of worthy causes including human rights, national disaster relief, and clean water and education programs in underdeveloped countries.
No other business tycoon has fulfilled philanthropic responsibilities better than Bill Gates. Bill Gates has donated billions of dollars to the Bill and Melinda Gates Foundation, which supports numerous causes including education, the eradication of malaria and agricultural developments, etc.
Economic responsibility is an interconnected field that focuses to strike a balance between business, environmental, and philanthropic practices. Economic responsibility abides by the set standards of ethical and moral regulations. In this context, companies try to find a solution that can facilitate their business growth and generate profits by benefitting the community and the society.
Here, economic decisions are made by considering their overall effects on society and businesses at the same time. Hence, economic responsibility can improve business operations while engaging in sustainable practices.
Today, we need to focus on two main areas of our environment: limit pollution and reduce greenhouse gases. Companies are bound to fulfill their economic responsibility because awareness of environmental issues is growing largely among the consumers and today they want businesses to take necessary steps to save the planet and all lives. Companies that are concerned about reducing air, land, and water pollution have increased their standing as good corporate citizens while benefiting society.
Among above four types of CSR, environmental responsibility seem to be highlighted in 2022.
Environmental CSR aims to reduce any damaging effects on the environment from the business processes. Activities may focus on:
- energy use
- water use
- waste management
- recycling
- emissions
- eco-friendly office and business travel policies
Some of these are significant from both environmental and financial points of view.
Advantages of environmental CSR
Green CSR can reduce business risk, improve reputation and provide opportunities for saving costs. Even the simplest energy efficiency measures can generate savings and make a difference to your business. e.g.
- switching off lights and equipment when not in use
- reducing the use of water
- reducing the amount of paper you waste
Caring about the environment can increase revenue too. Many customers prefer to buy from responsible companies.
How to reduce environmental impact
You can reduce business’ environmental impact in many ways. For example, you can:
- create products that can be recycled
- optimize product life cycle
- source responsibly (eg using recycled materials and sustainable timber)
- reduce packaging
- buy locally to save fuel costs
- create an efficient (and fuel-efficient) distribution network
- work with environmentally conscious suppliers and distributors
Green investments
Meanwhile, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno has highlighted the importance of green investments or projects aimed at the conservation of natural resources in driving the country’s post-pandemic recovery.
“Since the Philippines is vulnerable to typhoons and climate-related risks due to its geographical location, green recovery is the ideal approach to strike a balance between implementing economic strategies and building climate and disaster resilience,” Diokno said in a statement recently.
Citing data from World Bank’s International Finance Corporation, the BSP chief said that investments in the Philippines and in three other big emerging markets — China, Indonesia, and Vietnam — may reach $5.1 trillion if these economies adopt a post-pandemic “green recovery approach.”
The said approach includes investments in energy efficiency, green infrastructure, support for environment-related research and development, and incentives for low-carbon vehicles.
Diokno said the BSP has incorporated sustainability principles in its portfolio management as part of its sustainable central banking strategy.
Article credits: The Manila Times