Introduction

With businesses focusing on generating profits, sustainability was not a

popular concern among companies up until recently. Now, in an era of globalization,
multinational corporations (those that conduct business in more than one country) and
local businesses are no longer able to conduct destructive and unethical practices, such as
polluting the environment, without attracting negative feedback from the general public.
With increased media attention, pressure from non-governmental organizations, and rapid
global information sharing, there is a surging demand from civil society, consumers,
governments, and others for corporations to conduct sustainable business practices. In
addition, in order to attract and retain employees and customers, companies are beginning
to realize the importance of being ethical
while running their daily operations. The corporate response has often meant an adoption
of 'a new consciousness', and this has been known as Corporate Social Responsibility
(CSR) since the 1970s.
In any case, companies are now expected to perform well in non-financial areas such as
human rights, business ethics, environmental policies, corporate contributions,
community development, corporate governance, and workplace issues. Some examples
of CSR are safe working conditions for employees, environmental stewardship, and
contributions to community groups and charities. The problem is that many companies
that claim to be socially responsible
often do not live up to such a standard. Because CSR is becoming more commonplace
among corporations, there are concerns that some companies promote an image of CSR
whether or not they have a true strategy in place and the results to show for.
Accountability and transparency are key to conducting business in a responsible manner.
In recent times, there has been an acceleration of multinational corporate activity,
generating wide attention and criticism. In an era of globalization, Multinational
corporations (MNCs)- corporations that conduct business across national boundaries in
many countries- are no longer able to conduct destructive and unethical practices under a
protective radar. With a dramatic proliferation of media attention, propagation of non-
governmental organizations (NGOs) and global information sharing, there is a surging
demand from civil society, consumers, governments and shareholders for corporations to
conduct sustainable business practices. The corporate response has often meant an
adoption of ‘a new consciousness’ -- what has now become known as Corporate Social
Responsibility (CSR).

CSR is an evolving concept that enables corporate executives to create and apply self
determined policies to best meet the needs and demands of its stakeholders. As stated by
the department of Trade and Industry in the United Kingdom, CSR represents “the
integrity with which a company governs itself, fulfils its mission, lives by its values,
engages with its stakeholders, measures its impact and reports on its activities”.

Companies are now expected to perform well in non-financial arenas such as human
rights, business ethics, environmental policies, corporate contributions, community
development, corporate governance, and workplace issues. Some examples of CSR are:
safe working conditions for employees, environmental stewardship, and contributions to
community groups and charities. The problem is that many companies that claim to be
socially responsible often do not live up to such a standard. Because CSR is becoming
more commonplace among corporations, there are concerns that some companies
promote an image of CSR whether or not they have a true strategy in place and the results
to show for. Accountability and transparency are key to conducting business in a
responsible manner.

In recent decades the concept of Corporate Social Responsibility (CSR) turned out to be a
vital strategy for companies to survive in a ruthless market environment. In a condition
where market’s shift and customers’ preferences becomes more unpredictable and
complex, adopting CSR strategy could be a powerful tool for survival.
CSR-Asia defined Corporate Social Responsibility as a concept whereby companies
integrate social and environmental concerns in their business operations and in their
interaction with their stakeholders on a voluntary basis. Many companies all over the
world are now starting to see the benefit of practicing CSR in their bottom lines.

Today’s world has become smaller, and markets have become ever more accessible,
thanks to globalization. Globalization however, would force many companies including
small and the medium enterprises to adopt CSR in order to remain competitive locally
and in the international market. In some countries Government regulations such as
environmental and social issues have increased, and standard and laws are also often set
at a supranational level. An example of this is the European Union, where regulations and
standards are applied to all member countries. Moreover, buyers in these countries would
want to know that the product they buy did not come from companies and manufacturing
processes that caused or even poses threat to the environment. They are also concerned
with the company’s records - giving fair wages, good working conditions, and the like.

Definitions

Corporate social responsibility (CSR), also known as corporate responsibility, corporate

citizenship, responsible business, sustainable responsible business (SRB), or corporate
social performance, is a form of corporate self-regulation integrated into a business
model.
en.wikipedia.org/wiki/Corporate_social_responsibility

A commitment to behave ethically and contribute to economic development while

improving the quality of life of our workforce and their families as well as the local
community at large.
www.nexeninc.com/Sustainability/glossary.asp

Corporate Social Responsibility (CSR) is the decision-making and implementation

process that guides all company activities in the protection and promotion of international
human rights, labour and environmental standards and compliance with legal
requirements within its operations.
www.bench-marks.org/glossary.shtml
A concept whereby organisations take responsibility for their impact on society and the
environment.
www.science.org.au/nova/034/034glo.htm

A voluntary approach that a business enterprise takes to meet or exceed stakeholder

expectations by integrating social, ethical, and environmental concerns together with the
usual measures of revenue, profit, and legal obligation.
http://dictionary.bnet.com/definition/Corporate+Social+Responsibility.html

The World Business Council for Sustainable Development in its publication "Making
Good Business Sense" by Lord Holme and Richard Watts, used the following definition.
"Corporate Social Responsibility is the continuing commitment by business to
behave ethically and contribute to economic development while improving the
quality of life of the workforce and their families as well as of the local community
and society at large"
http://www.mallenbaker.net/csr/definition.php

Corporate Social Responsibility In Pakistan

Most responsible organisations and businesses in Pakistan are making cash and in-kind
donations for humanitarian and religious reasons. About 60 per cent of Public Listed
Companies (PLCs) make some sort of contributions to charitable or social development
initiatives.
Humanitarian and faith-based donations mostly go to social sectors such as education and
health. Some of the major factors determining philanthropy could include tax benefits,
marketing advantages and better public relations. Despite the developing state of its
economy, philanthropy is common in Pakistan.
CSR, however, is at a nascent stage of development. In recent years responsible
multinationals and national companies have started executing CSR projects and creating
positive examples for others to follow. The momentum could build up but is contingent
on a positive and sustainable business environment.
Pakistan’s leading businesses have wowed to abide by and adopt the ten guiding
principles laid down by the UN Global Compact. But not all of them have tangible CSR
programmes. The number of those who have CSR programmes is, nevertheless, gradually
on the rise.

In the last 30 years, a large number of companies have appeared in the world of market.
Concentration of entrepreneurs in the new dimensions is the basic factor of success. As
compared to the previous years, entrepreneurs have acquired more awareness regarding
their social responsibilities. Now companies not only focus on the needs of their
customers but also the needs of society and environment.
Corporate Social Responsibility (CSR), popularity is growing day by day, as more and
more companies around the globe are turning their focus towards the sustainability of
environment and resources at large. Companies now have come to realize that their future
as successful, large companies is dependent upon the future of environment and society
to which they belong and in which they exist.

In a survey, it has been observed that customers are showing keen interest in buying the
products of that company which is fulfilling its social responsibilities. Corporate Social
Responsibility (CSR), simply means that companies should spend some proportion of
their profit on the betterment of the society by plantation of trees, proper disposal of
waste, using alternate sources of electricity, proper utilization of raw material and if
possible using those renewable resources.

In Pakistan, companies like EBM, Nestle, Unilever etc have realized their social
responsibility. Nestle Pakistan Ltd has a unique CSR profile which is inbuilt into its
business model, their concept is to integrate rural development with market mechanism.
If we look at EBM, their cultural ethos is of a “Caring Corporate Citizen”, that is giving
back to community as a responsibility and obligation of a good management. EBM
portrayed itself as a responsible company by responding immediately to the victims of
earth quake and providing them not only funds but free of cost biscuits. Unilever is also
actively participating for the betterment of society. Rose Petal is donating a proportion of
their sales proceeds to WWF Pakistan for the preservation and nature conservation.

It is the need of time that all the companies across the globe should realize their
responsibilities and discharge them as responsible citizens and generate not only good
returns but also conserve the environment.

There are endless opportunities for responsible businesses seeking to build CSR
programmes in Pakistan. The unequal distribution of wealth and lack of employment
opportunities in and outside major urban centres are taking their toll and choking
Pakistani cities.

Pakistan is the world’s sixth most populous country and more than 70 per cent of its 165
million people live in the rural areas. Development of infrastructure and community
improvement programmes in rural areas could reduce the population pressure on cities, as
well as bridge the widening gap between the standards of living of urban and rural
communities.

For Pakistan to become a productive and progressive nation able to feed itself,
development of rural areas is essential. The poor infrastructure and lack of basic
amenities of life in remote rural communities is one of the biggest challenges. For the
continuity of a self-sustaining and merit-based political and judicial system in Pakistan,
development of rural areas ought to be a priority.

Rural areas account for more than 75 per cent of the registered voters in Pakistan. They
could only produce better leadership to represent them at the federal level if people are
able to make informed decisions. If they have security and protection of law, access to
education, healthcare, water and sanitation, roads and telecommunications facilities, as
well as awareness about individual and collective human rights and duties towards
community and country.
Selected sectors in need of CSR:
There are several sectors and areas that need immediate attention, funding and
management support:

• Education
• Healthcare
• Special Healthcare
• Water and Sanitation
• HIV/AIDS
• Child Protection
• Biogas power projects for small communities
• Development Research
• Vocational Education & Skills Training
• Information Technology

In Pakistan’s immediate neighbourhood, w e see that during the last decade or so India
and SriLanka have gained competitive advantage due to their pro-activeness and future
marketcentred policies. Pakistan’s early promise in the wake of the widely recognized
Sialkot Partnership against Child Labour has lost momentum . Now, another opportunity
is coming this way in the emerging manufacturing hubs created by the various upcoming
enterprise zones and so-called “textile cities”, which can market themselves by adopting
a demonstrable CSR strategy. Pakistan can either let this opportunity pass it by or swing
into action in case a crisis like the Sialkot child labour crisis hit, or Pakistan could act to
embed a national CSR strategy into decision-making and business practice through
effective policy, incentives and a system of credentialing that can assure overseas buyers
of the country’ distinct position as a socially responsible supplier country. Has the
Pakistani enterprise arrived at a stage where it can learn from experience around it and
take a jump forward to catch the third wave of differentiation and competitiveness built
on responsible business practice? Is the Pakistani enterprise mature enough to assess its
own processes against global CSR benchmarks and then turn shortcomings into
differentiators to capture future markets, which are surely steered by responsible and
ethical business practices? Sadly, barring a few notable exceptions, the answer to these
questions is in the negative, as indicated by the findings of this research.
Taking Pakistan into the current wave of CSR means building responsible competitive
ness, and to do so require a collaborative effort that supports a culture of compliance and
an environment that enables responsible thinking and practices . This is only possible by
underscoring CSR as a priority of national policy, followed by the development and
implementation of a national CSR strategy supported by all important stakeholders. From
this first step CSR practices need to evolve through an institution for CSR dialogue that
responds to ever changing market demands. An example of such an institutional
arrangement would be the formalization of a CSR policy and learning group comprising
individuals representing relevant stakeholders.Beginning as a semi-formal working
coalition, possibl y under the aegis of SECP itself or an academic or CSR research
institution , this group can evolve into an independent organization if the situation
demands.CSR is no longer a new phenomenon for business, but these are some of the
questions that confront policy makers as they determine the need for and the direction of
a national CSR policy. Governments are reviewing regulatory frameworks to integrate
CSR into routine corporate disclosure regimes. Who would have said ten years ago that a
random debate in the citizen sector would nudge the world into a new paradigm of
corporate behaviour?As we know it today, CSR has its roots in consumer consciousness
and solidarity movements in developed consumer societies that saw elements of social
and environmental exploitation in the behaviour of major global enterprises, whether they
were mining or natural resource exploration companies or retailers sourcing consumer
goods and produce from cheap labour markets in the developing world. From initial
finger pointing and confrontationist strategies spearheaded by NGOs and civil rights
activists to the blossoming of a host of sustainability partnerships between these same
NGOs and their erstwhile corporate foes, CSR has definitely come a long way.
Yet, even as the sustainability motive drives cooperation, lingering concerns about
corporate intentions and NGO agendas continue to muddy the discussion, especially in
the case of brand supply chains in the developing world to avoid labour practice norms or
the environmental impact of obsolete plants relocating to countries with less stringent
safety or environmental regulations. Thus the CSR discussion now impacts supply chains
of multinationals (MNCs) even in their remotest reaches . As a result, with an eye on
their stakeholders to safeguard repute and often attracted by the competitive advantage it
brings, MNC’s are in the forefront of demanding “responsible behaviour” from their
suppliers or sub-contractors. This side of CSR has of late been strengthened by initiatives
from influential organizations like the World Trade Organization (WTO).
Thus, multiple variables like stakeholder awareness, government initiatives, globalization
and localization patterns, and the highly volatile business scenario, all have had a role to
play in determining the centrality of CSR in today’s business environment. But, contrary
to expectation, CSR is not a defined code or a toolkit to be employed in the manner of an
operating manual. Rather, CSR is often a vision based on particular sets of values that
business leaders often aspire to, and as such is more of an ever-changing philosophy,
quite open to interpretation and re-thinking of business strategy based on decisions
related to ethical values, legal compliance, respect for stakeholders, and supporting
communities or nurturing environment.Increasingly, CSR is being interpreted as the
expectation society has of business. CSR is the leadership vision that is more than
occasional gestures, marketing oriented initiatives,enhancing public relations or business
affiliations etc. In contrast, it’s a comprehensive set of policies and programs enriched
with the urge for developing a better society.