What corporate social responsibility is

It has been rightly pointed out that in spite of the growing emphasis on corporate social responsibility (CSR), criticism of such private-sector activities usually centres on the lack of sustainability ("Look deeper into boosting volunteerism" by Mr Kwan Jin Yao; last Friday).

There is a measure of confusion in defining exactly what CSR is.

CSR encompasses commercial-societal relations, with companies doing good while pursuing their respective business models by engaging in philanthropy, ethical management, environmental sustainability and fair business practices.

The most common approach to CSR in Singapore is philanthropy, which includes monetary donations and aid to charities and non-profit organisations.

Staff volunteerism is another common CSR initiative. However, most appear to be one-off events, such as cleaning HDB rental flats, visiting nursing homes, tree-planting or distributing gifts to orphanages. Corporate volunteering must not be seen as only a means of getting tasks done. Employees who volunteer benefit personally by acquiring skills and experiences, new friendships and social contacts.

For CSR to flourish, companies must be committed to the idea that corporate success and social welfare are interdependent. Owing to the concerted push for economic growth for the past 50 years, CSR has not been a priority in the corporate consciousness.

Our captains of industry must act as agents of change by promoting the advantages of "doing right". Organisations must not see the adoption of CSR initiatives as unnecessary expenditure or extra demands on their human resource.

For corporations to compete effectively, they require a healthy, educated workforce and sustainable resources. For society to thrive, sustainable enterprises must be developed and supported to create income, inland tax revenue and philanthropy.

By definition, corporates are answerable only to their shareholders in increasing returns on their investments. There are trade-offs between short-term profitability and social goals, but the opportunities for competitive advantage from building a CSR component into corporate strategy cannot be ignored.

In spite of the overriding business mentality of survival and profitability, the advantages of becoming socially responsible are now becoming more obvious.

Edmund Khoo Kim Hock

A version of this article appeared in the print edition of The Straits Times on October 26, 2015, with the headline 'What corporate social responsibility is'. Print Edition | Subscribe