News Details

 Corporate Social Responsibility

Aizaz Baqir
According to a news item, The Pakistan Center for Philanthropy (PCP) ranked a cement company of Pakistan among top 10 national philanthropists out of 532 public listed companies in terms of total volumes of donations in 2010 as per statement issued by the that cement company. The ranking was given subsequent to a survey investigating the philanthropic giving of public listed companies.
The survey was aimed at recognizing the efforts of corporate sector towards Corporate Social Responsibility, the statement said. The cement company in question donated Rs 104 millions to different charitable causes in the society.
Similarly under fire businessmen were falling over themselves in Davos (Switzerland) to show how sharing and caring they really were as they tried to repair the tarnished image of the privileged "one percent” but their detractors remain unconvinced.
What actually is the corporate social responsibility or CSR? The concept started gaining ground after the end of the Cold War when opening the previously closed economies across Eastern Europe, the former USSR, and China provided an opportunity to the transnational corporations to take advantage of well educated and inexpensive labour, and hence cut costs and generate higher profits. So as a result of this opportunity their wealth also increased dramatically. Today Coca Cola is worth $ 65 billion, Microsoft worth $50 billion and McDonald $40 billion. However, the strategy of businesses (both transnational and local) focusing only on generating profits and ignoring the sustainability invited negative feedback from the general public. With the passage of time, more than ever influential, powerful and expanding media, NGOs, and rapid global information sharing as well as increasing demand from civil society, consumers, governments, and others forced these business not to conduct (at least apparently) destructive and unethical practices, such as, polluting the environment and destroying the ecological balance and at the same time also contribute towards the betterment of the communities around.
Corporate response to the public awareness was also an adoption of a "new consciousness", and this has been known as CSR since 1970s.
Although CSR is defined in a variety of ways but is commonly held to refer to corporate commitment to ethical behaviors, particularly in relation to social justice and environmental sustainability. CSR has expanded considerably in recent decades and on global scale and big multinational/transnational companies such as McDonald, Coca Cola, Microsoft etc are the big champions of this slogan.
Some critics also opine that these corporations are acting ethically in areas that are highly regulated, such as , North America but acting in an opposite manner in poor third world countries ( using cheap or child labour etc.). But, important point is that: is this concept and its expansion on the global level a sign of more humane capitalism or a desperate attempt to resolve the contradiction of capitalist globalization ?
Many national and multinational companies have now separate departments to project their social welfare activities and improve their image as a socially responsible entities For instance, Coca Cola has its global philanthropic arm called "Coca Cola Foundation". The company claims to recognize the fact that they cannot have a healthy and growing business unless the communities being served are healthy and sustainable.
Similarly Pepsi Cola company also projects itself to be socially responsible and gives generous donations to the hospitals as well as other welfare organizations. Pepsi Cola has also installed several water filtration plants in Multan conveniently ignoring the fact that most of the potable water (that is already in short supply as nearly 80 percent population of the country has no access to or facility of potable water) is being consumed in making carbonated drinks and water level is falling drastically.
Pizza Hut (a multinational food chain) also claims to have saved 16 million children from starvation. In addition, company claims to have donated 36 million dollars to the United Nations World Food Program and other hunger relief agencies. Philanthropist-in-chief Bill Gates has also recently pledged $ 750 million in donation to the UN Global Fund to fight AIDS, tuberculosis, and malaria, saying the downturn must not trigger a fall in aid. But Occupy protesters camping in igloos in Davos, who were turned back when they tried to enter the forum conference center, are not convinced of this new slogan and the claims of the corporate giants to be socially responsible.
According to some recent findings almost one billion people in the world go hungry while big greedy trans-nationals are just giving slogans to the poor instead of empowering them. In the words of Laurent Moeri, an activist, it cannot be said that these people (Corporate Executives) are genuinely evil or bad, but, this is not the solution. He is of the view that we should empower the people and not make them dependent on charities.
How can the big corporations pretend to be the champions of social responsibility when they are not only continuously over consuming resources but at the same time also damaging the ecological balance?
For example, above mentioned cement company, on the one hand claims to be among top 10 national philanthropists and on the other hand cement prices are being increased in a way (during the last one year prices in Pakistan went up by 22 percent to Rs. 425 per bag) that has affected growth of construction sector and confronted the government's various development projects with "cost overrun". Besides, cement cartels have got free hand and are earning abnormal profits of billions of rupees at the cost of the consumers. The environmental damage being caused by cement companies (especially in the Ckhakwal area) is another issue.
On the global level, picture is even dismal. In Europe some of the greatest social gains made through the welfare states are being liquidated. Income inequalities have reached unprecedented levels while "the Davos Class" of filthy rich executives continue to over-consume resources. Many people in Asia and Africa can't even have access to clean drinking water and most of them go to bed hungry (however, perhaps they can buy coke and pizzas by availing the facility of the IMF loan). In the nutshell we can say that people are being misguided in the name of corporate social responsibility and it is a ploy being used by New Capitalism to avoid accountability for economic, social and ecological crises humanity faces today.
These crises are the direct result of policies pursued by small global corporate elite. This is another imperial quiver in the arsenal of neoliberalism. Under neolibealism capital will necessarily colonize more and more natural resources including land, mineral wealth, water and air.
While the worth off Coca Cola, McDonald and other transnational companies is increasing by billions, the extreme weather conditions (due to environmental degradation as a result of developed countries failure to considerably reduce carbon emissions) have caused over 710,000 deaths across the world from 1991 to 2010, incurring economic losses in today's terms of over 2.3 trillion dollars. And it is worth mentioning that while not a single developed country (except USSR) features in the top 10 for climate change risk, poor countries are becoming more vulnerable than ever.
The argument advanced here is that, despite its claim to provide increasing benefits to the mass of humanity and that it offers the only prospect of global prosperity, in the long run, capitalist globalization is intensifying two pre-existing crises: increasing class polarization and deepening environmental catastrophes, both on global scale.
Klaus Kleinfeld, head of a U.S. aluminium producer Alcoa rightly said that businesses should not pretend to be good Corporate Citizens if they are not: "you will be quickly found out".