Corporate Social Responsibility is not philanthropy

The study also offers various critical feedback with regard to CSR in the country

Corporate Social Responsibility (CSR) in the country is usually linked to philanthropic action which is a misconception, key findings of a general study by the Bhutan Chamber of Commerce and Industry (BCCI) explains.

The study by the BBCI found that CSR to the Bhutanese mind means sponsoring, funding or donating to individuals or entities that are not part of the structure of the company.

“Philanthropic activities might be considered a part of CSR – as a form, let’s say, of community engagement – but it is not part of its main scope. CSR is a business management concept that goes beyond charity and that can even not pass by doing charity, as long as the company balances their economic, social and environmental performance and meets their shareholders and stakeholders expectations,” the report states.

It provides a host of recommendations for BCCI “to raise awareness for the fact that CSR is more than philanthropy, by proactively promoting a debate on what is CSR in Bhutan among business community and other stakeholders.”

The draft report also shows that the local business community does not have a clear position in terms of the role of the private sector towards various issues and that employment is not seen by many people as one of the issues to which companies contribute more in society. The study also found that women are less represented in the private sector workforce for there are few women in executive positions. It goes on to say that there haven’t been any specific measures to be carried out in the private sector to tackle gender inequality.

Among other recommendations, the draft report suggests that the BCCI should promote dialogue between stakeholders to understand in which specific issues the private sector is expected to provide better conditions to employees.

It states that awareness must be raised for environmental rules and labour legislation in place and that the BCCI should promote the need to respect legislation as one of the main principles of CSR, regardless of  the level of enforcement from public entities.

One of the findings of the report shows anti-corruption measures and training on anti-corruption hardly being used in the private sector in Bhutan and that some businessmen doubt if the private sector should contribute to tackle corruption. The report also recommends that the BCCI promote the adoption, by its members, of measures to combat internal and external corruption.

With BCCI’s assistance, Portuguese lawyer Catarina Pardal Monteiro, who completed a course on ‘Competitiveness and Corporate Social Responsibility’ from the World Bank E-Institute, carried out the study which entails research studies on the situation of CSR in Bhutan and the preparation of an informative document regarding CSR and its international and national context.

Catarina said, “with the aim to achieve an appropriate environment that incentivizes companies to act in a socially responsible manner, this study tried to capture the main concerns and suggestions of the different stakeholders, which will be included in a draft strategy to be implemented in the future by BCCI in connection with other entities.”

The study includes offering a proposal of a strategy for BCCI to implement CSR within the private sector. “The report aims to provide the findings of this study as well as the recommendations based on the opinions of the different entities approached, in an effort to define an efficient and coherent strategy for the BCCI to promote corporate citizenship among its members and enable the entity to play an active role next to the government on this matter, in order to enable the necessary environment for companies to further engage in the pursue of the sustainable development of the country,” Catirina said.

CSR is becoming one of the most challenging issues facing the interconnections between the private sector and the interests of the other stakeholders. In general terms, the increased international prominence of CSR can be attributed to globalization, the increased role of business, a growing complexity of market and a greater cost of misconduct. In fact, companies started operating in a scenario where their impacts represented great danger for national and international welfare and the different players in society became more aware of the costs associated to business operations conducted without an effort to prevent and mitigate their negative impacts in environment and society. Although public entities have a major responsibility of regulating the markets and monitoring company activities, a growing attention was given to the fact that sustainable development can only be pursued with the sincere engagement of all the parties including the business sector, no matter what the law requires.

Despite this growing knowledge for the important role of CSR for sustainable development, there is no single definition for this concept.  It is though commonly agreed that it represents the awareness of companies regarding their impacts in society and their commitment to conduct their operations providing the most positive contribution to development as possible, but some of the different elements that it entails are discussible and vary among countries and institutions.

In this context, the BCCI has decided to provide the first steps to understand CSR which is the best way to promote corporate citizenship among its members. This would help in leading the process of finding the appropriate concept of CSR that will be decisive to ensure that the private sector in Bhutan actively contributes to a growing and vibrant sustainable economy and it is towards this goal that the BCCI conducted a general study.

To pursue the study, BCCI approached a group of different stakeholders which includes various companies operating in different industries such as telecommunications, hotels, banks, ferro alloys producers, malls, energy providers, timber and beverages produces among others. The BCCI also approached five Business associations, four governmental entities related with CSR subjects, five international organizations, one civil society organization and a media entity.

Catarina presented her report to the chamber earlier this week on Thursday.

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