Why business inclusiveness trumps CSR

Published: November 17, 2019
Representational image. PHOTO: REUTERS

Representational image. PHOTO: REUTERS

Representational image. PHOTO: REUTERS The writer has over 10 years of international development and impact investing experience. He is currently pursuing his PhD in Sustainability Management at the University of Waterloo

In May 2019, Engro Corporation received a responsible enterprise award for their Partnerships and Value Expansion (PAVE) project in Taiwan. In October, the project won its second global award in Australia.

So how and why is Pakistan’s largest conglomerate winning these awards? The reason is simple: Engro is exhibiting what is called a “Business Inclusiveness” approach, as opposed to a conventional Corporate Social Responsibility (CSR) approach.

Business inclusiveness is about viewing the entire business supply-chain from a social responsibility lens. This is different from CSR, which isolates “responsible” activities from core business activities. The reason that business inclusiveness trumps CSR is because it doesn’t absolve any part of the business from its obligations towards communities.

For Pakistan’s private sector, adopting such an approach should be easy. We have morality, stewardship and social justice built into our culture. It should be easy to remove “business blinders” and start viewing all business operations from an economic, environmental and social responsibility lens. These natural predispositions can make us leaders in the global realm of business inclusiveness.

According to the Economic Survey of 2018, the total market capitalisation on the Pakistan Stock Exchange is around $50 billion. Incoming aid into Pakistan, from 24 major foreign governments averages to around $1.5 billion annually. This means that if we direct only three per cent of the total market capitalisation of Pakistani companies to a business-inclusive approach, we can indigenously match combined aid from international donors.

This doesn’t mean aid is bad. Aid provides a cushion of monetary support, brings in invaluable foreign exchange, and is often delivered in a clean and ethical manner. But the fact that we can locally match foreign aid, just by being more socially intentional with the private sector’s capital, is a powerful one.

So how is business inclusiveness different from CSR? Mainly because it aims to create win-win situations for businesses and communities. CSR is conventionally carried out as charity and creates unequal power structures, while business inclusiveness creates partners, customers, suppliers and employees from poor communities, bringing long-term sustainability and dignity into the process.

Going back to the PAVE project, small farmers (less than 12.5 acres) were trained by Engro Fertilizers in high quality, certified seed production and became suppliers in the seed value chain. This not only helped the farmers increase their income, but also helped Engro increased their procurement and revenue for their seed business.

In Sheikhupura, while visiting the project I came across a group of women farmers, with a young lady, Saiqa as their spokesperson. As a child, Saiqa’s only desire had been to go to school but her father repeatedly denied her requests. But when the PAVE project was introduced in her village, she heard about special trainings for women farmers. She asked her father how he could deny her knowledge and skills which directly related to the family’s livelihood.

He miraculously agreed and Saiqa began training under the project. She is now one of the most successful female farmers in the area and her father is completely supportive of her endeavours. Saiqa told me, “This project might be a small thing for you, but for us it is everything.” Just a few days ago one of the field officers told me that Saiqa saw a recent brochure for the project and asked, “How come my picture isn’t in it?”

There is no doubt that Pakistan’s private sector can make significant contributions to economic, environmental and social development. At a time when we have to get all players on board the Sustainable Development Goal (SDG) agenda, a business inclusive approach, not CSR will yield exponential results.

Published in The Express Tribune, November 17th, 2019.

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