Back when I was in the environs of the University of Lagos, I remember being perplexed as to why Guaranty Trust Bank (GTB) would take it upon itself to name the roads in the school when they owned no branch there as at the time. Was the bank being paid to do it? Did the bank also own the school? Was it mandated to do it? Well, I was still curious till I came across the concept, CSR. Then it all made sense. At some point, I wonder whose job is corporate social responsibility?
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CSR, which stands for Corporate Social Responsibility and also known to others as corporate citizenship, is explained by the Business Dictionary as a company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship through their waste and pollution reduction processes, by contributing to educational and social programs, and earning adequate returns on the employed resources.
In layman’s terms, it simply involves a company or business organization giving back to the society voluntarily. To some, it is seen as philanthropy (e.g. giving donations and aids to nonprofit organizations or communities) or simply volunteering. CSR often involves incurring short-term funds that do not provide immediate returns but help promote positive social and environmental change. No matter the definition of CSR a company chooses to adopt, the concept of adding value to the community, public or society should not be exempt.
An insightful example of a company adopting CSR is Johnson & Johnson. Johnson & Johnson is known for the production of Tylenol which generates approximately 17% of the yearly income of the company. In the 1980’s, Johnson & Johnson faced serious issues when it was reported that its Tylenol products had killed people. The company showed Corporate Social Responsibility by immediately choosing to remove over 30 million Tylenol products from the markets voluntarily. Incurring a loss of over $100 million, the company still chose to offer refunds and safer tablets as replacements free of charge. Many believed the company would not bounce back from the devastating blow. But, when the company introduced the products two months later, it was a success. This is all because of the company’s quick implementation of CSR. CSR goes beyond monetary contributions, it involves doing the right thing and helping society.
It is quite difficult to determine what company in Nigeria started the evolution of Corporate Social Responsibility. UAC Nigeria Plc started giving back to the community as far back as 1948 through a ‘School Scholarship Scheme’ open to children of both serving and retired employees of the company. It has since been assisting communities and various charitable organizations as well as contributing to education by launching the ‘Goodness League Initiative’ and ‘Schools Support Programme’.
Stakeholders’ power became paramount to the evolution of CSR. There is a global clamor for greener business operations in the face of the destructive capitalist attitude of companies and the lack of concrete laws protecting the interest of stakeholders. Organizations and communities have taken it upon themselves to ensure that non-governmental organizations protect their environment since they have also ensured that the business flourishes in those communities.
Aside from the benefits the community, public or society derive from CSR activities carried out in respect to the environment, education, healthcare or special projects the company also derives benefits.
Some Of The Benefits Of CSR Include:
- More access to investments and funding
- Positive media coverage, be it through social or traditional media (television, newspapers, magazines and so on)
- Good reputation which makes it easier to recruit employees and retain them
- Motivational tool for employees of the company
- Helping to stay ahead of the competition as it differentiates the organization from others in the same field. Some companies sustain competitive advantage by using their social contributions as forms of advertising
- Generating increase in sales as well as customer loyalty
- Getting less scrutiny from government officials because these companies show that they are above just by complying with the law and giving back to the society
- Boosting the impression of a company with the public
Major companies in Nigeria have adopted the concept of CSR. Just to name a few: in the manufacturing sector, Unilever is said to reach over 20 million people annually through its CSR operations. The company has been known to donate to the education sector of the economy through its ‘Adopt a School Program’ geared towards boosting primary schools. It organizes the ‘Unilever Sustainable Living Young Entrepreneurs Award’. It also implemented the ‘Unilever Women Empowerment Program’. As regards to health, the company came together with Sightsavers International and the Sokoto Ministry of Health to fight Trachoma. The British American Tobacco Nigeria established the ‘British American Tobacco Foundation’ geared towards the implementation of community enhancement projects in Nigeria. Dangote Group has been known for its humanitarian supports to victims in the North and donations to universities.
In the telecommunications sector, Airtel has been known to collaborate with Unilever to promote oral hygiene among students. MTN established the ‘MTN Foundation’ which cuts across economic empowerment, education, health, and works against poverty. Etisalat established the Lagos Business School CSR Centre and is known to have established an initiative to fight malaria as well as the ‘Ebola Virus Containment and Awareness Initiative.’
In the banking sector, Zenith Bank is known for ‘Zenith Philanthropy’ geared towards giving philanthropic aid to various sectors of the country. UBA has the ‘UBA Foundation’ that cuts across education, environment, special projects and economic empowerment. First Bank of Nigeria is known for its contribution towards the Lagos Business School as well as its contributions towards the emergency unit of the Sickle Cell Center.
In the oil sector, Shell Petroleum Development Company of Nigeria in partnership with Africare started the ‘Africare Malaria Health Integrated Project’ and it also established the ‘Secondary School Scholarship Scheme’ to help students pay through school in the Niger Delta region of the country.
The Federal Government introduced education tax in Nigeria because they felt companies were giving less than they were getting from the community. From my personal research, I found out part of the reason why the Federal Government introduced the education tax is because they felt that the private companies were beneficiaries of the best intellectual minds in the society. Hence the Federal Government felt that the companies should contribute towards the development of education as they foresaw that they could no longer cater for it financially in the nearest future. Many industrial analysts argued that if a vast majority of organizations had engaged in CSR activities in the educational sector, there might have been no need for the education tax levied on organizations.
However, Corporate Social Responsibility has faced quite a number of challenges in Nigeria. Since the evolution of CSR, there are only a few laws put in place by the government to enhance or regulate it; the available ones are either unenforceable or poorly managed. CSR is mostly strictly at the discretion of the companies.
Internationally, certain Corporate Social Responsibility instruments have been put in place. These include the Organization for Economic Development, United Nations Global Impact, the 1998 ILO Declaration on Fundamental Principles and Rights at Work. However, laws like these are yet to be in existence in Nigeria. It should be the responsibility of the government that companies carry out their operations in an environmentally and socially responsible manner. Comprehensive laws regulating the environmental impacts of the oil sector in the country are not in existence still.
Moreover, due to the level of corruption in the country, most corporations would prefer bribing government officials in an event of any unlawful act against the environment or community rather than be socially responsible. There is also the issue of poor enlightenment on the need to be socially responsible. Most companies only believe that the main motive of any business is to make and maximize profit, nothing more, hence making them ignorant of any effect their social irresponsibility causes the environment or community.
Although the government, in a bid to encourage CSR activities, has made it a tax-deductible expense, there is still much work to be done. For the concept of CSR to grow, the government should put more effort into making more laws guiding it and ensure compliance with those laws. The government can also create an avenue for partnership by encouraging companies to adopt certain pollution reduction polices. Fiscal incentives like soft loans can also be given to companies or industries so they can invest in a clean and friendly production system.
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