CSR As A Business Strategy: A Case Study
Corporate Social Responsibility (CSR) is still seen as philanthropy in Nigeria in many circles. This article seeks to use a case study of instances where CSR has been used to build corporate brand and profitability for different organisations in the country.
Corporations around the world are struggling with a new role, which is to meet the needs of the present generation without compromising the ability of the next generations to meet their own needs. Organizations are being called upon to take responsibility for the ways their operations impact societies and the natural environment. They are also encouraged to apply sustainability principles to the ways in which they conduct their business. Sustainability refers to an organization‘s activities, typically considered voluntary, that demonstrate the inclusion of social and environmental concerns in business operations and in interactions with stakeholders.
What is Corporate Social Responsibility?
Corporate Social Responsibility (CSR) refers to operating a business in a manner that accounts for the social and environmental impact created by the business. CSR is a commitment to developing policies that integrate responsible practices into daily business operations, and to reporting on progress made toward implementing these practices.
Business is not divorced from the rest of society. It is but one constituent part of society. The two are interdependent and it will serve all concerned parties well to ensure that through mutual understanding and responsible behavior, the role businesses play in building a better future is recognized and encouraged by society. As an engine for social progress, CSR helps companies live up to their responsibilities as global citizens and local neighbors in a fast-changing world. And acting in a socially responsible manner is more than just an ethical duty for a company, but is something that actually has a bottom line pay-off.
CSR, in broad summary, is the ethical behavior of a company towards society. In particular, this means management acting responsibly in its relationships with other stakeholders who have a legitimate interest in the business – not just the shareholders.
Sustainable Development – It’s Origin
The origin of the term SD lies in the 18th century and was actually used in forestry. At the time, organizations and individuals were only allowed to cut down a certain number of trees to guarantee a long-lasting protection of the tree population. This method ensured a continuous supply of wood without reducing resources for forthcoming generations. The Club of Rome precipitated an international discussion due to its report ―Limits to Growth (Meadows, 1972). In the course of this discussion, an eco-development approach was created which effected the protection of resources and environment coming to the fore. This development has led to the mission statement of Sustainable Development we have today.
OTHER DEFINITIONS OF CSR
- Environmental care ‘married’ to development.
- Improving the quality of human life while living within the carrying capacity of supporting ecosystems.
- Development based on the principle of inter-generational (i.e. bequeathing the same or improved resource endowment to the future that has been inherited), inter-species and inter-group equity.
- Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
- An environmental ‘handrail’ to guide development.
- A change in consumption patterns towards more benign products, and a shift in investment patterns towards augmenting environmental capital.
- A process that seeks to make manifest a higher standard of living (however interpreted) for human beings that recognizes this cannot be achieved at the expense of environmental integrity.
DOCUMENTATION OF CSR AS A CORPORATE STRATEGY
At the present era of globalization, the corporate business as the largest wealth generating entity is considered to be one of the prime actors for the achievement of sustainable development. CSR as a business strategy acts as instrumental to enforce business role for the realization of this objective. CSR paves the way for businesses to work simultaneously as an economic institution, a social actor and an environmental protector.
Unfortunately, documentation of business processes in Nigeria is poor; more so, most of the CSR processes are poorly documented. With poor documentation of CSR initiatives undertaken by organizations – multinational, banks and SMEs around the country it is almost impossible to determine the extent of their reach. This has led many people to believe that all businesses exist only – “to make profit”. However, presently, businesses are realizing that in order to stay profitable in a rapidly changing environment, they would have to become socially responsible. Therefore, beyond making profit for the shareholders, business enterprises should do more to serve the interests of all other stakeholders. Each CSR initiative should be properly catalogued and made available in the public domain for reading, research and use of secondary data for analysis.
A CASE STUDY OF BANKS IN NIGERIA
Financial institutions in Nigeria are committed to the actualization of the 17 UN Development goals. Most banks are committed to corporate social responsibility programmes in order to enable them positively impact on the communities where they operate.
For its sustainable development programme, most banks in Nigeria are focused on four major areas a) Education, b) Health and Welfare, c) infrastructure development and d) youth empowerment. Some of the CSR initiatives of banks in Nigeria are captured as follows:
- In education, they have facilitated the development of entrepreneurial centers, building and equipping learning centers, offer of scholarships and in some cases the best graduating students have been offered employment with the banks. As part of the education drive, some of them have encouraged more students to become more involved in sports by equipping the Sports Pavilion at the schools they have adopted.
- Through employee engagement in achieving the UN goals, some banks have encouraged staff to volunteer for different assignments. Through the employee volunteering initiative, the staff have enlightened students on financial literacy with over 3,000 students benefitting.
- In health and welfare, some banks have supported the awareness of certain medical conditions, they have also established primary health centers (PHCs) in some of their target communities and donated several medical equipment including conducting health outreaches in their communities.
- In youth empowerment there have been programmes on youth economic empowerment and equipping of ICT centers for youth digital literacy. Several youth have also been engaged in various vocational skills training.
- Infrastructure development and the environment. The target communities have been trained on Green Energy. Some other projects are the reconstruction of roads, building and equipping health care facilities. In some of their communities, youth have been trained to use locally available materials to create beautiful art works; this also has an indirect benefit of ensuring that the environment is protected.
The argument in favour of the concept of CSR starts with the belief that if businesses are to have a healthy climate in which to function in the future, then it is in their long-term self-interest to be socially responsible and demonstrate this in various ways.
In demonstrating CSR some of the advantages are that it can win new business, increase customer retention, develop relationships with suppliers, make an organisation an employer of choice, differentiate an organisation from its competitors, improve business reputation, reduce risk, and provide access to investment and funding opportunities (Kurucz et al., 2008).