Business

Saturday October 31, 2009

CR needs to be driven from the top

By EUGENE MAHALINGAM


The Star will be featuring a series of articles in conjunction with the StarBiz-ICR Malaysia Corporate Responsibility Awards 2009. The programme is a partnership between The Star and Institute of Corporate Responsibility Malaysia, and is supported by the Securities Commission and Bursa Malaysia Bhd. The working partners are Association of Chartered Certified Accountants, PricewaterhouseCoopers and the Securities Industry Development Corp while the official sponsors are HSBC Bank ( M) Bhd and Canon Marketing (M) Sdn Bhd.

KUALA LUMPUR: One of the biggest reasons corporate social responsibility (CSR) is not widely practised by Malaysian companies is because it is seen as nothing more than an unwanted cost.

However, CSR Asia (Malaysia) director Rikke Netterstrom believes that incorporating good sustainability practices can help companies to safe money.

“CSR is not a cost. If you do it right, it can actually help improve your profit. You’ll know how to save energy, save resources and reduce employee turnover. If your accident rate goes down, that’s money in your pocket,” she told StarBizweek.

Netterstrom said company heads needed to take the initiative to spearhead CSR.

“It needs to be driven from the top. Most CSR in Malaysia is still driven from the communications department and we need to see more CEOs and chief operatings officers getting involved.

“The area where Malaysia needs a big push is environmental performance. Instead of just planting trees or giving a cheque for (environmental) conservation, why not examine the impact our offices have on the environment?”

While Netterstrom said Malaysia still had a “long way to go” in terms of its CSR practices, she was optimistic about its direction.

“In South-East Asia, Malaysia’s definitely ahead of the pack. We (CSR Asia) have high hopes for Malaysia because the Government is pushing CSR agendas forward.

“It was announced at the tabling of Budget 2010 that RM1.5bil would be allocated to promote green technology and a RM100mil CSR fund. That sends a strong message (on Malaysia’s direction), despite difficult times.”

Netterstrom said while Bursa Malaysia had made it mandatory for public-listed companies to disclose their CSR activities, it just wasn’t enough.

“Although companies are required to disclose their performance on corporate responsibility, there are no concrete indicators that they have to report on. They don’t have to report on how many accidents they have, or their carbon emissions. So they will often just have a soft description of what they’re doing, which doesn’t help. We’d like to see more quantitative information from companies,” she said.

CSR Asia, a leading provider of information, training, research and consultancy services on sustainable business practices in Asia, was founded in 2004.

With offices in countries such as Malaysia, Singapore, China and Hong Kong, it aims to promote awareness of CSR to advance sustainable development across the region.

Earlier this month, CSR Asia launched the Asian Sustainability Rating (ASR), an open source, web-based tool that gauges the sustainability practices of 20 of the largest companies (by market capitalisation) from 10 countries within the region.

CSR Asia (Singapore) executive director Erin Lyon said the companies were selected from the respective stock exchanges of their country of origin.

“We chose the biggest companies because at the end of the day, they’re the ones that are going to have the biggest impact in what they do.

“We see it primarily as a tool for companies so they themselves can go in and see how they’re doing. It’s also a useful tool for investors and stakeholders so they can see how companies are scoring,” she says.

The companies were rated on 51 indicators covering six sections – governance and policy; strategy and communication; marketplace and supply chain; workplace and people; environment; and community and development.

Malaysia was ranked sixth in the report, which can be viewed on www.asiansr.com. Most of the top companies on the list were Australian organisations. The highest ranking Malaysian company was British American Tobacco (M) Bhd, at number 20.

Lyon said CSR Asia hoped to update the report on a more regular basis (instead of just annually) and include more companies from more countries in the future. “Going forward, we’re looking at Indonesia, South Korea and Taiwan.”

● For more information, log on to http://www.thestar.com.my/starbizicrm/

  • E-mail this story
  • Print this story