CSR, short for Corporate Social Responsibility, is a business model that, when implied, makes sure that a business is socially accountable to itself, its stakeholders, and the public. It is generally used to regulate the kind of impact the company is having on its surroundings including aspects regarding economy, environment, and society. Since Corporate Social Responsibility is a way of giving back to society in a positive way, a company needs to be established enough to implicate this model. Examples of CSR include philanthropy, charitable deeds, and lessening the negative impact they might be having on the environment through various methods. This business model keeps the company in check and makes sure that they refrain from turning profit-hungry.
TBL, or Triple Bottom Line, a term coined by John Elkington in 1994, is another way to keep the company answerable to society. The key aim of this theory is to make sure the people and planet are benefiting through the profits the company is making along with the company itself. This theory is also used to determine and calculate the commitment of a company towards CSR over a long period of time, including the impact the business is having on the environment. Since the CSR model includes social responsibility, a business then becomes answerable to the society about its action regarding their environmental impact and giving back to the community it’s based in. There are several ways a business can keep a check and balance regarding their environmental impact including going green by decreasing or completely eliminating their plastic usage or incorporating wind or solar energy instead of exhausting natural resources.
In Pakistan, although the concept of CSR is not very old, it was highlighted immensely when the issue of child labour in the football industry was brought to international headlines. However, regardless of that, the majority of businesses that implement CSR are multinational companies with international links who have their head offices in developed countries. Rest of them either misunderstand CSR’s guidelines or completely ignore them.
What are SME’s and Corporations?
Small and Medium-sized Enterprises, otherwise known as SMEs, are the kind of businesses that keep their manpower and assets below a certain threshold. Every country has its own rules and regulations when it comes to defining a company as an SME. For example, any company with less than 250 employees is considered to be an SME by the European Union while at the same time in United States a SME may have up to 1200 employees. Pakistan too has a threshold of fewer than 250 employees for a business to be qualified as an SME and productive assets from 2 – 40 million, as defined by the Small Medium Sized Development Authority (SMEDA). In Pakistan, SME’s make up about 90% of all the enterprises and employs up to 80% of the non-agricultural labour force. Their share in the GDP amounts up to a considerable 40%.
Corporations however are businesses on a much larger scale with thousands of employees, situated in multiple locations, sometimes even globally. Investopedia defines corporations as “a legal entity that is separate from its owners. It enjoys most of the rights and responsibilities an individual possesses, with limited liability.” This can also mean that corporations are not always for-profit purposes. Examples of corporations in Pakistan can include KFC, Nestle, and Unilever, etc.
Rules and regulations regarding CSR in Pakistan.
Since CSR is still in its early stages in Pakistan, there are no separate legal rules to cover the model. Therefore most of the laws that revolve around the concept are basic labour laws, corporate laws, environmental laws, and consumer protection laws.
The most primary laws that might come under CSR can be derived from the Constitution of the Islamic Republic of Pakistan 1973 Art, 8-28, where the various articles are enriched with principles to abolish all slavery from the country. Moreover, the very concept of child labour is vehemently discouraged by the Constitution stating that any child under 14 years is prohibited to work in factories, mines, or any hazardous employment. Not only that but another article under the constitution requires the state to provide proper working conditions so that no child or woman gets employees in positions that are unsuitable for their age.
Although a proper CSR structure is still under progress in Pakistan, the businesses here are doing the best they can in the way of social responsibility by instilling proper labour and union laws, adequate working conditions, attempting to eliminate carbon footprints, having a professional code of conduct amongst employees and contributing to charities.
Companies in Pakistan Adhering to the CSR model.
There are multitudes of companies in Pakistan that have incorporated the CSR model into their businesses. They have their own ways of giving back to the community. Some of these well know companies include:
PTCL which is giving back to society in several ways through disaster response, contributing to the education sector, free healthcare, and PTCL Razakaar, an employee volunteering program where employees can participate in various humanitarian activities focusing on the areas of need.
PSO too is focused on the community and has set up a trust called PSO CSR Trust which contributes immensely to the sustainable social development of society. This includes education, healthcare, community building, and the environment.
TATA Pakistan has taken the initiative to contribute to both environment and the society by installing solar water pumps in Thar for irrigation purposes, having multiple employment opportunities for the educated yet unemployed youth, promoting and sponsoring sports activities and healthcare.
These are just some of the hundreds who have taken the responsibility to give back to their community and make sure they are not harming the environment in the path of attaining profits. Most of the SME’s contribute by going green and trying to either limit or eliminate their carbon footprints. An example could be given of local restaurants that have started using cardboard packaging for delivery purposes instead of plastic containers.
Importance of TBL and CSR in our community.
It is very easy to get lost on the path of making profits. So much so that many forget the kind of impact they are having on their surroundings, be it short-term or long-term. CSR, along with its 3 pillars of sustainability makes sure that in lieu of making the present prosperous, we do not forget about the future generations that have to live on the same planet left behind by us. Therefore incorporating and implementing this model can be described as a necessity of sorts. The results then satisfy the businesses who enjoy steady profits, the employees who have rights and good working conditions, the environment for our future generations, and the society where the uneducated, orphaned, or poor get a chance to lead a humane life.
