Dr Ron Sookram
In the past year, there were significant efforts to promote
the practice of corporate social responsibility (CSR) in
T&T. This was evident by the various newspaper articles,
CSR seminars and the report Mapping Corporate Social
Responsibility in T&T published jointly by the
United Nations Development Programme (UNDP) and the South
Trinidad Chamber of Industry and Commerce. It is reasonable
to think that this momentum will intensify in 2008.
Already, the United Nations Economic Commission for Latin
America and the Caribbean (Eclac), together with the Organisation
of American States (OAS), the Young American Business Trust
and the Caribbean Association of Industry and Commerce have
launched the research phase of their project Promoting
Corporate Social Responsibility in SMEs in the Caribbean.
One of the key aims of this project is to capture regional
corporate views and practices regarding CSR among SMEs in
the sustainable development framework. Despite these initiatives,
however, the local business community, unlike the multi-national
corporations, remains generally skeptical about investing
in the practice of CSR.
CSR challenges in T&T
An examination of T&Ts CSR climate reveals that
the slow buy-in among our business community is due to a
number of factors. In this article, consideration will be
given to three of these.
1. There is still a limited understanding of the potential
benefits that CSR can bring to business organisations. Arguably,
the social and commercial value that CSR can add to companies
has not been adequately articulated.
As a consequence, companies are yet to be convinced of the
positive impact that CSR can have on their bottom line.
Integral to this scenario is the perception that the practice
of CSR is not an investment but rather an expense that adds
no benefit to the financial performance of the company.
Yet, it has been proven that CSR can be financially worthwhile
to businesses (Business for Social Responsibility, 2006).
The financial rewards of CSR have to be considered in the
same context in which intangibles have been understood to
play a significant and growing role in the assessment of
value enhancement in business. This is because a large degree
of CSR benefits are, in fact, of an intangible nature.
Intangibles are rooted in human capabilities and are manifested
in the relationships and the profile of organisations. They
are assets that depend primarily on human creativity, not
materials. These assets are transformed into enduring value
for organisations by building know-how, capacity to innovate,
and forming alliances and networksall of which lead
to enhancing brand and reputation.
When we speak today of the knowledge-based economy, the
information economy and the services economy, we are actually
speaking of the continuing ascendance of intangibles as
key value drivers in the modern corporation.
Competitive advantage resides in the minds of managers far
more than the portfolio of physical/tangible assets of the
organisation. In 1997, investment in intangibles (e.g. brand,
training and R&D) exceeded investment in traditional
tangibles (e.g. property, plant, equipment) for the first
time. The former is estimated at about $1 trillion a year
(Business for Social Responsibility, 2006).
2. Although we speak of sustainable development in T&T,
there is doubt concerning the extent to which it is actually
practiced. The sustainability of investments in terms of
their social and environmental impacts is not given the
level of priority that is required. It is essential for
us to re-assess or redefine development in alignment within
the global context, and in accordance with the principles
of sustainable development.
As with other processes, this change towards development
will be slow and requires support from those that are most
influential in our society. There is a significant link
between sustainable development and CSR, and the extent
to which CSR is implemented in an organisation or country
is highly influenced by the extent to which sustainable
development is embraced. Therefore, T&Ts CSR development
can be assessed through this framework or perspective.
3. The involvement of stakeholders in driving the CSR agenda
in T&T is also important. In societies where the practice
of CSR is advanced such as Canada, USA, Europe, Argentina
and Brazil, stakeholder involvement has been instrumental.
In these countries, stakeholders advocate for companies
to be socially responsible with respect to environmental
and human rights issues, for instance.
Non-Governmental organisations (NGOs), particularly, have
traditionally been not only the most effective stakeholder
driver for the promotion of CSR but also watchdogs in determining
how responsible firms have been in their CSR initiatives.
In fact, the development of the CSR movement owes a great
debt to the activity of NGOs. It was this group of actors
who first alerted the international community to the need
for more responsible practices in the environmental and
human rights arena.
Companies tend to build their CSR strategy according to
the concerns raised by stakeholders. CSR initiatives have
been undertaken based on the anticipated reaction of NGOs
since NGO actions can have a detrimental effect on
reputation and business performance (Martin, 2005).
On the other hand, in T&T, stakeholder visibility and
influence on the CSR question is not as forceful as is required.
NGOs have not been adequately shaping or driving CSR in
this country. Without their involvement companies will not
be as motivated in adopting CSR practices.
The way forward
The role of government is also significant in the CSR equation,
particularly in creating an environment that encourages
its practice. The Government should deliver a credible message
on CSR, one that is attractive to companies and society.
In so doing, trust and respect is gained for businesses
to get involved in the CSR agenda. The Government must leverage
relationships with the big locally-owned corporations in
T&T to be champions of CSR practice. These corporations
must accept the demands of corporate responsibility.
In this way, government can get these business entities
to promote transparency, accountability, co-ordination and
the willingness to co-operate with SMEs and the social stakeholders
in the pursuit of sustainability objectives.
Of course, the Government must not only guide and lead this
process of CSR implementation, but it must also become a
participant. It must ensure that CSR activities are properly
aligned with the national development plan, Vision 2020,
so that they can deliver real benefits to society.
In addition, the Government must present to businesses the
meaning and importance of sustainable growth and development,
both for businesses themselves and for society, by identifying
CSR related activities that are of interest and concern
to each industry sector and to companies of different sizes
within each sector.
Dr Ron Sookram is engagement manager, CSR, Arthur Lok Jack
Graduate School of Business. You may e-mail him at [email protected]