Table of Contents

  • Corporate Social Responsibility (CSR), Corporate Responsibility (CR) or Corporate Sustainability (CS) are terms used to describe the voluntary efforts of companies to assume a larger responsibility for the effect of their operations on society. As such, CSR/CR/CS is an important complement to development efforts of governments.
  • Corporate social responsibility (CSR) is about companies operating in a manner that is sustainable, cognizant of their responsibility to the wider community in which they are located. CSR is more than simply acts of philanthropy or allocating a proportion of its earnings to worthy causes; it is strategic in nature, and is about how a business actually functions. CSR typically boils down to a set of policies within a company that seek to ensure that its actions and activities are beneficial, not only to itself and its shareholders, but also to other stakeholders, typically comprising: customers, employees, the wider community and the environment.
  • While the term ‘corporate social responsibility’ (CSR) might be relatively new in various parts of Asia and the Pacific, at least some elements of its practice date back a very long way. Philanthropic activity, for example, whether pursued by businesses or individuals, goes back many millennia. And that may explain in large part why a lot of companies and their executives wrongly perceive of CSR as comprising simply that – philanthropic ‘giving’. But, while philanthropy can be seen as one (fairly basic) component of CSR, it is certainly not the case that CSR is limited to philanthropy alone. CSR is something far greater than one-off acts of charitable giving by firms as part of a bid to be (or seen to be) a good corporate citizen, and perhaps with some additional marketing or public relations benefits. It can be an effective form of risk management, ensuring compliance with the social and environmental laws and regulations of the host country, and even a means of (shared) value creation for those companies willing to innovate.
  • As ESCAP (2010) points out, there are four convincing reasons why host country governments should seek to promote sustainable and responsible business practices. Firstly, “… citizen groups, civil society organizations, as well as international development agencies have all advocated for inclusive and sustainable development; and governments are expected to play a key role in promoting the economic, social and environmental conditions that favour more inclusive and sustainable development. Governments are under pressure with the challenge of facilitating the transition to a more efficient economy, in conjunction with a fairer and more sustainable society. CSR is widely accepted … as the business sector’s contribution to inclusive and sustainable development. Thus, government can utilize a CSR agenda in pursuit of this goal.” A social driver.
  • As with any policy intervention, it is important that government does not seek to expend limited public funds on actions that can be undertaken by existing players in the market. At best, that is duplication, and a misallocation of limited funds. Rather, it should identify where there is market failure or weakness, and seek to catalyze activities in that space, in ways that can become sustainable in the long-term, thereby allowing the government to exit, and move on to other tasks. This is no less true in promoting sustainable and responsible business, which must inevitably be a task that is embraced and practiced by relevant members of the corporate community. Therefore, legislating for CSR, through separate laws on CSR is generally not advisable, as the direct and indirect consequences of doing so can be costly and ineffectual, at best, and even counter-productive at worst.
  • As other analyses have noted before now, the kinds of CSR promotion activities that governments pursue tend to fall into one of the following five categories of intervention: i) as a vision leader; ii) as a leader by example and CSR ‘endorser’; iii) as a facilitator; iv) as a catalyst or partner; or v) as a conventional regulator (also sometimes referred to as ‘mandating’). Figures 2 and 3, below, provide broadly similar representations of these categories, with some indicative examples. In terms of a vision leader, Bhutan’s ‘Gross National Happiness’ Commission is perhaps one of the most ambitious examples at present, with its attempt to mainstream sustainable development issues throughout all policy-making, including those policies and regulations pertaining to business activity. In terms of a leader and endorser, numerous governments run national award programmes intended to raise awareness of CSR and publicly commend those companies that have made the biggest strides in this field. As a facilitator, there is much that government agencies can do to promote CSR through various capacity building initiatives, stimulating market demand, and linking CSR practices to its own procurement policies, and other fields where government agencies – such as export credit bodies – interact closely with business. As a catalyst or partner, governments often have resources that can be directed towards CSR-related projects, including publicprivate partnership (PPP) projects of various kinds. Finally, as a conventional regulator, Malaysia introduced in 2008 a law that effectively obliges all publicly traded companies to report annually on their CSR activities. Some of these are profiled in more detail in chapter 5.
  • In this section of the report, we provide some empirical examples of sustainable business promotion pursued by governments in the Asia Pacific region, to give a flavour of what has actually been attempted.
  • A number of regional bodies have sought to promote the pursuit of sustainable and responsible business at the multi-country level. And as business becomes increasingly international in scope and regionally interlinked, with many firms now straddling multiple country (and continental) borders, the utility of pursuing CSR at the regional – as opposed to the national – level becomes more convincing. It should be noted that the activities of regional bodies in promoting and coordinating CSR activities are not exclusively conducted with governments, as they also work with other stakeholders, such as business associations and chambers, NGOs, independent stock exchanges, and other relevant members of civil society. But for the purposes of this paper, we will only review those activities undertaken with at least some degree of clear participation by governments.
  • The first recommendation to consider, at the national level, is to provide technical assistance in the establishment of a sustainable and responsible business ‘Council’ in various Asia Pacific countries, intended to: i) develop a national strategy for the promotion of sustainable and responsible business, based on informed diagnostic research and stakeholder consultation; ii) coordinate the various efforts of relevant government agencies in the design and implementation of that strategy, likely to take the form of a time-bound action plan; iii) serve as a permanent platform for stakeholder inputs in the pursuit of that strategy, from conceptualization through to enactment; iv) monitor and evaluate progress being made, and provide strategic oversight of what is likely to require a flexible and evolving set of foci; and v) generally serve as a resource in the pursuit of sustainable and responsible business activity in the relevant host economy.