Business

NIGERIA: Corporate Social Responsibility vs Corporate Charity

In recent time, corporate social responsibility has become a subject of debate among stakeholders in the Nigeria corporate environment. Raheem Akingbolu takes a look at the understanding of the concept among top corporate players and sustainability issues
 
On both local and international scenes, corporate social responsibility (CSR) is being touted these days as a major index to measure business growth. As a result of this, any company that worth its salt always want to be seen to be doing something along this line.
 
While CSR understanding and practice is well rooted in advanced economy, the concept is still greatly abused in many developing countries, including Nigeria. However, this is not to say that some Nigerian companies are not adopting global best practices. In fact a few do, but many are still pretenders when it comes to the strict adherence of CSR as a strategic policy.
 
Organisations like Promasidor, FirstBank, Dangote Group and Guaranty Trust Bank have received several recognitions for their investments in the areas of education, health and sports development.
 
In many fora, concerned individuals have oftentimes condemn companies, which  derive benefits and maximise profits from communities but are not appropriately responding to needs of host communities through strategic philanthropy, environmental protection, and community development.
 
But rather than put all the blames on corporate players, government has been condemned for failing to champion the cause of sustainable CSR in Nigeria through appropriate legislation.
 
The nearest effort by the Nigerian Government in this regard is the Vision 2010 which preached partnership between government and corporations for improvement in social equity and justice, continuous funding of community development and sustenance of unpolluted environment.
 
Importance
Beyond the fact that companies that involve in CSR activities are in better position to impact on their areas of operations, it is believed that CSR stands in a good position to influence consumer behavior.
 
This is so because as brand owners are engaging in environmental and social projects, they are also increasing their popularities among patrons. Today, the call being made across the business clime is that organisations should use the initial period of their businesses to pay attention to financial issues but as businesses mature, they are expected to take stock and focus on broader considerations such as giving back to the community.
 
Speaking on the importance of CSR to companies, the Managing Director of Tru Contact, a CSR monitoring organisation and assessor, Mr. Ken Egbas, said the concept has put many organisations on a platform that demands moral and professional obligations.
 
According to him; “Business managers have realised that a company’s reputation lies in the hands of the people it serves. Thus, the CSR strategy has become an indicator of a company’s successful turn-around, and how it shows appreciation by allowing others to enjoy a piece of it.”
 
While commending Unilever to have grown its CSR in the last eight years, he called on organisations that are keen about winning consumers’ loyalties to rise up and support their environment.
 
Misconceptions
One issue that has continued to generate debate is the way some organisations often confuse CSR with corporate charity. A public commentator and PR practitioner, Mr. Tony Kan told THISDAY that the earlier organisations are able to draw a line between CSR and corporate charity, the better for the economy.
 
“CSR and corporate charity are two different things. Corporate charity can involve the donation of money and the provision of opportunities to members of the community and stakeholders. This is very different to the considerations that a company must abide by to ensure that their actions fall with the acceptable corporate social responsibility guidelines that have been established. These can include guidelines that relate to the environmental impact that a particular action can have or they can relate to the impact that an action can have on the local community.”
 
According to him, CSR is intended to provide each business with a far greater ability to create sustainable development, adding that the size of the business notwithstanding, CSR stands to provide benefits for the business and its stakeholders.
 
“The business can become more competitive once it begins to create and follow guidelines to enforce the concept of corporate social responsibility within the company and its surrounding community. The greater the sustainability of a business’s developments, the more successful it can become,” he added.
 
Another thing the practitioners condemned is the way some organisations are mixing CSR with advertising or Public Relations. While he didn’t see anything wrong in leveraging on CSR activities to position businesses, Kan said it is wrong for brand owners to perceive CSR as philanthropic activity for which they expect congratulations.
 
Speaking on the same issue, the senior consultant, Strategy & External Relations at ThistlePraxis Consulting, Emilia Asim-Ita said: “CSR is a business strategy with internal and external footprints; CSI and philanthropy are external engagements but CSI has a longer term impact whilst philanthropy no matter how strategic remains an external activity with little or no alignment with an organisation’s core business for the non-financial benefits of goodwill, social capital and brand mileage,”
 
Until recently, the campaign by stakeholders had always bordered on the need to give an appreciative proportion of investment to the society, rather than scratching it on the surface, today, the debate has moved to the need for sustainability.  This was prompted by the discovery that many companies often abandon their projects after the unveiling. In most cases, the projects will be given huge advertising support with little or no effort to manage or monitor it. To promote sustainability, ThistlePraxis Consulting Limited was established in 2010 as an assessments and strategy business, to advise corporations and government agencies on how to be socially responsible, sustainable operational and profitable. It was established by Ini Onuk.
 
 
Also as part of efforts to promote sustainability in Nigeria, stakeholders met two years ago at a dinner organised by Corporate Environmental and Stakeholder Consulting Limited (CESC), in Lagos, and tasked government and policy makers on sustainability of CSR.
 
Like previous fora on the understanding and practice of the concept, the event which was tagged ‘Decision Makers Dinner’, tried to redefine the concept and throw up questions on its abuse and the need for government to come out with good policy plan that would guide the operations of companies and individuals, who are willing to contribute to the society.
 
One of the conveners of the meeting and a co-partner in CESC, Mr. Dimeji Bello advocated the urgent need to discuss the essence of CSR     and how Nigerian society can be better off through it. He said that majority of organisations and the people within them are completely unaware of how their everyday business practices affect their local environment and the people within them, particularly when these people are not their core business customers.
 
In view of the fact that it is a concept that was conceptualised  to improve the quality of lives in the community of operation for companies,  a former Senator of the Federal Republic of Nigeria, Dr. Olorunnimbe Mamora, in his keynote address, had advocated the need to practice  CSR with total adherent to ethics, transparency and responsibility.
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Regulation and development
In the last few years, efforts are being made by concerned individuals, organisations and lately government to create awareness around CSR and sustainability. To give CSR a legislative support, Senator Uche Chukwumerije, representing Abia North, in the upper house of the National Assembly, had in July, 2008, sponsored a bill which sought to create a commission to supervise the implementation of Corporate Social Responsibility (CSR) by businesses in Nigeria that would compel them to pay 3.5 percent of their profits towards “corporate social responsibility.”
 
The Bill proposed among other things, to “create a standard of social responsibility for corporate organisations that is consistent with international standards, integrate social responsibility in Nigeria trade policies, and make sure that the rest of the corporate bodies in Nigeria come under the arena of modern corporate ethics”.
The senator however, thrown a challenge to corporate players, when he declared that only 150 out of 5,000 registered companies in Nigeria “are alive to their social responsibilities.”
 
Worried by what could likely be the effect of the pronouncement on their operations,  some voices within the business community in the country kicked and  asked the National Assembly to focus on devising creative solutions to the myriads of problems besetting the economy, instead of creating unnecessary bottlenecks to ‘struggling entrepreneurs’, which they argued could cause many of them to fold up.
 
 
Since then, the question of whether CSR be imposed on businesses by regulation or should they be allowed to apply CSR in their operations voluntarily has remained a subject of debate.
 
Another positive development in this direction was the recent collaboration between Standards Organisation of Nigeria (SON) and her knowledge partner, ThistlePraxis Consulting (TPC) on the new Nigerian Standard.  The launch which marked the inception of a standardised approach to implementing social responsibility by organisations of all sizes and in all sectors; also serves as a tool to enshrine socially responsible business practices in Nigeria.
 
There is also Social Enterprise Report and Awards, (SERA), established by the Tru-Contact, a PR firm, which according to the company’s managing director, Mr. Ken Egbas, was established as a result of the deep conviction that the success of Public Relations in this present millennium and in the future, will be increasingly dictated by the level and degree that a company or organization engage its stakeholders.
 
In an online interview with THISDAY, Emilia Asim-Ita of the ThistlePraxis Consulting admitted that CSR has recorded an interesting performance in Nigeria but she further argued that “Whilst the uptake when accessed seems very impressive, upon a critical and more professional review; it is still far off the mark for an economy as relevant as ours in Africa.”
 
On the awareness level, she said: “The awareness level has increased and stakeholders have done a lot of work in advocating for the infusion of CSR and sustainability into various executive educations curricular across the country.
 
Many organisations now have sustainability/CSR Departments. In our organisation, for instance, we have recorded industry-specific regulations such as the Nigerian Sustainable Banking Principles (NSBP) for the Financial Services Industry. The Nigerian Stock Exchange (NSE) has signed on to the Sustainable Stock Exchanges Initiative (SSEI). In summary, we have made a lot of progress. Nevertheless, a lot still needs to be done.” she stated.

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