Business

Saturday August 15, 2009

Propelling corporate responsibility awareness

By ELAINE ANG and EUGENE MAHALINGAM


AS the roots of corporate responsibility (CR) deepen globally, existing trends are picking up steam while new ones are taking shape to propel CR awareness and implementation to a new level.

Institute of Corporate Responsibility Malaysia chairman Datuk Johan Raslan notes that a major CR trend in the country is that chief executive officers and their boards are more involved in CR strategies as the “tone from the top” is key to their success.

“Companies that do good CR stand to reap many benefits such as employee engagement and better branding. What company wants to be known simply for the pursuit of profit at all costs?” he asks.

Johan

He points out that a global trend which is picking up steam is towards better and more trustworthy reporting of companies’ CR work.

“So far, there is no accepted standard for CR reporting, unlike financial reporting’s International Financial Reporting Standards. We are in the experimentation stage everywhere in the world.

“Stakeholders are getting fed up with ‘greenwash’. They want objective reports, which means some form of auditing by institutions which are competent and fully independent of the process of preparing the reports. What the market wants, it will eventually get,” he says.

Nevertheless, Johan believes CR in Malaysia is heading in the right direction, driven with great passion by companies and backed by the Government.

According to Amsterdam-based international expert on CR and sustainable development Paul Hohnen, governments are now taking closer interest in CR and sustainable development.

At the G8 Summit in Italy last month, there was agreement on the need for a new global framework to promote transparency and strengthen business ethics.

Hohnen

In Asia, there have been a few high level government announcements on the strategic importance of “green growth” and “green industry” as a driver for sustainable economic recovery.

“With companies such as Wal-Mart introducing their own CR requirements, we’re also seeing the beginning of a new level of private CR norm or standard that doesn’t depend on the government. Companies are now taking a leadership role and not waiting for government,” Hohnen points out.

Green markets are not only being encouraged as part of the response to the economic recession, but also form a critical part of creating business solutions to the challenges of climate change, and promoting sustainable economic growth.

A good example is Malaysia’s National Green Technology Policy and formation of a Green Technology Council for the effective implementation of green technology policies.

Hohnen says another development to watch out for is the release of the ISO 26000 social responsibility guidance standard in late 2010.

“Over five years in development, the standard will provide comprehensive guidance for all organisations on what it means to be socially responsible,” he adds.

Hohnen also foresees a trend towards sustainability reporting with carbon management becoming highly desirable, if not mandatory.

CSR Asia director for Malaysia Rikke Jarvad Netterstrom says the group’s research shows that the focus on climate change will continue to be the number one concern globally.

“We have noticed that interest in climate change in Malaysia seems much lower than in other countries where CSR Asia operates,” she says. Many local companies that are no strangers to CR and have been spearheading such initiatives concur.

Says HSBC Bank Malaysia Bhd deputy chairman and chief executive officer Irene Dorner: “Climate change has an impact on the business community. Left unchecked, it will impact vast areas of the planet’s surface, destroying homes and livelihoods of millions, devastating countries and economies globally.”

She says stakeholder pressure has been increasing and companies should start managing the environmental and social impact of their business operations proactively.

“For businesses with international presence, initiatives taken in their buyers’ home countries in response to climate change will result in new product regulations or standards,” she adds.

Dorner believes that being compliant to these standards will help open up new markets and bring in new buyers, raising the competitive bar.

“The future growth of businesses and communities depends upon us all understanding that climate change is upon us and us taking steps to combat it,” she says.

BP Malaysia country head Datuk Rosli Hussin agrees that the issue of climate change is a top priority globally, especially in developed economies.

“Governments and corporations in these countries have made carbon dioxide reductions their primary focus. Locally, there is much more that can be done by all sectors to understand and reduce the carbon footprint of Malaysians,” he says.

Guinness Anchor Bhd managing director Charles Ireland notes that Malaysia is still generally behind most progressive countries in respect of CR.

“I believe that there is a growing recognition of the importance of having a full CR programme and that many companies which are new at CR are trying very hard to do the right thing,” he says.

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