We in Nepal think of CSR only as charitable work. Perhaps this is why CSR is uncommon
The business houses in Nepal don’t seem to take their Corporate Social Responsibility (CSR) seriously. The idea that businesses should take initiatives that benefit society through a variety of tactics, from giving away a some portion of their earning for charity to contributing to sustainable development and green economy, still sounds like an alien concept in Nepal. Nepali businesses lag far behind compared to businesses in foreign countries in introducing CSR into their business models. Though a lot is being said (and done) about gender and development on political front, we have failed to link these issues with CSR. Many think of CSR only as charitable works of business organizations.
Perhaps this is why they shy away from their CSR obligations. But charity is only one aspect of CSR.
CSR obligations can be met even without big investments. A business can make a CSR contribution by ensuring gender equitable and eco-friendly value chains, without added investment.
CSR has two sides. One is as we conventionally understand CSR, where businesses provide funding and resources for social causes. Another kind involves introducing products and services that are in the best interests of the society. This may include measures such as environment-friendly policies and creating employments for marginalized groups. Businesses can perform many CSR activities. If they replace hazardous materials with safe ones, that too is CSR.
CSR ultimately benefits the corporate world. It upholds their image and builds public trust.
Companies have started to showcase their CSR activities to influence consumers and to win their hearts. They publicize corporate grants, volunteer programs or other CSR activities through social and conventional media. They do so as they know it pays off.
As is the case in most countries, CSR is not legally binding in Nepal and implementation is weak. There are countries with laws that require business organizations to work in a socially responsible manner. Such practices have helped not only protect the environment but also helped with sustainable business growth.
Nepal can learn from our next door neighbor, India. India formally introduced CSR into its legal system through the Companies Act in 2013. The 2013 Act has a separate section which states that companies with a net worth of over INR 500 crores, turnover of more than INR 1000 crore, or a net profit in excess of INR 5 crores are required to set up a CSR committee at board level. Such companies need to spend at least two percent of their net profit on CSR. The board of the company can undertake CSR activities through a registered not-for-profit or conduct CSR activities on its own if the company has three years of proven experience in similar activities. Big businesses of India have started to work as per these provisions.
We need to similarly make CSR mandatory in Nepal. CSR ultimately helps businesses increase their profits, enhance their image and reduce regulation. This is why businesses in Nepal need not be afraid of adopting CSR.
But addressing social issues can be complicated at times. Those in the corporate world may not always be best equipped to deal with social problems. However, if they have competent social activists in their payroll or work closely with capable and dedicated civil society organizations, they will be in a position to make a meaningful difference in the society. They will also be boosting their balance sheets.
The author is associated with Geneva Global, a philanthropic INGO. The views are personal