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Corporate Citizenship
Doing business in the international marketplace has gone beyond the bottom line and keeping shareholders happy. Thanks to the liberalisation of trade, advances in technology and the opening up of new markets, a truly global market has been born, and this has prompted deeper questions.
How should an organisation behave, for instance, and what obligation does it have to the community it is operating within? Is it answerable only to its shareholders, or does it need to also consider other stakeholders - from customers and employees, to communities and the environment, and the impact that their operations has on them, both in the immediate and the long term? The short answer is yes.
A widely quoted definition by the World Business Council for Sustainable Development states that "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large."
For many years, companies practiced that through philanthropic and charitable, providing scholarships, spearheading community projects, and establishing foundations. But today, upholding human rights, protecting the environment and promoting developing are no longer just the obligations of governments. Increasingly, companies, especially those functioning in the global marketplace, are taking on those roles too. Indeed, they are well placed to do so - some of the largest transnational corporations in the world as so big, experts note, that when you match up corporate sales and GDPs, they are, in fact, "bigger" than countries.
But at the core of such corporate citizenship is not just charity, but a sound business strategy. A Harvard University longitudinal study found that "stakeholder-balanced" companies had four times the revenue growth and eight times the employment growth of companies which only focused on their shareholders. And on the basic bottom line, it makes sense - a company that improves its environmental performance by achieving energy efficiently and reducing waste, for instance, also decreases operating costs. And sometimes, such sound practices are demanded by an enlightened global clientele.
In recent years, for example, seeking to redeem themselves as culprits that cause the Asian Brown Cloud - the smoke haze resulting from Indonesia's land clearing fires - two of the country’s biggest pulp and paper companies have set up, among other things, fire prevention initiatives, and engaged the local communities around them, and provided alternative livelihoods to slash-and-burn farming. One of the two- Asia Pacific Resources International (April) - has aggressively tried to take the path of responsible business. In June, it was admitted into the World Business Council for Sustainable Development. In July, it joined the United Nations Global Compact, the world's largest voluntary corporate citizenship project, It is just one among thousands of companies from around the globe that gave joined the UN organisation since it was like human rights, labour, the environment and anti-corruption. All that is required, it says, is a sustainable effort, leadership commitment, and a willingness to embark on a process of continuous organisational change. That way, instead of exacerbating the strain and challenges associated with globalisation, business can make themselves part of the solution.
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