Nepal | April 01, 2020

Linking CSR with SDGs: Reorient purpose of business

Ruchi Singh

CSR is a strategy that seeks to systematically integrate the economic, environmental and social impact of business into the management of business, with the vision to create a better future

Illustration: Ratna Sagar Shrestha/THT

Since the second half of the 20th century, a long debate has been taking place on corporate social responsibility (CSR) with questions like what it means, how it is carried out, whether it impacts the productivity of businesses and if it should be a voluntary endeavour.

Until the turn of the millennium, CSR was mainly understood to be a voluntary type of social engagement of corporations, namely in charity work. However, with the changing business scenario and global issues like climate change and poverty, companies can’t just expect to survive practising CSR as a philanthropy simply to improve their image.

When the future of the world is at stake, with our planet facing considerable economic, social and environmental challenges, companies can’t visualise their future without trying to protect the environment in which they wish to survive. Thus, this has given rise to the concept of linking CSR with sustainable development, and now includes sustainability and responsibility as two complementary elements of CSR. Though SDGs have a much longer history of evolution, there are strong evidences supporting the claim that CSR evolved with the sustainable development movement.

At present, companies are becoming aware that responsible behaviour leads to long lasting business success. Sustainable development is “development that addresses the present needs without undermining the ability of future generations to meet their own needs.” Corporate social responsibility, according to the World Business Council for Sustainable Development, is “the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the work force and their families as well as the local community and society at large”. So, CSR is a strategy that seeks to systematically integrate the economic, environmental and social impact of business into the management of business, with the vision to make the future better or at least sustain it at the present prevailing condition.

The current economic environment is marked by the globalisation phenomenon of the interdependence between environment and development. It increasingly shares the view that corporate social responsibility and sustainable development approaches should become an integral part of the economic concepts used by business, to ensure a balance between social progress, natural resource reserves and economic growth. Considering the growing importance of focussing on sustainable development, on September 25, 2015, 193 countries, including Nepal, agreed and adopted a set of goals as part of the new global sustainable development agenda. The Sustainable Development Goals (SDGs) define global priorities for 2030 and represent an opportunity to put the world on a sustainable path.

The 17 goals include the three dimensions of sustainable development: economic growth, social inclusion and protection of the environment. They aim to address inequalities, decent jobs, economic growth, industrialisation, human settlements and cities, oceans, ecosystems, energy, climate change, sustainable consumption and production, peace and justice. Government, the business sector, as well as civil society and the public, all have an important role to play in achieving the global Sustainable Development Goals (SDGs).

Though the Government of Nepal has demonstrated firm commitment towards the SDGs by tailoring it to Nepal’s National Development Programme and introducing a separate budgetary code in its annual plan and budget for the SDGs, it can’t be a success without the involvement and collaboration of the private sector.

But the irony is that there is very low CSR penetration in Nepal with the misconception that CSR is charity, and hefty spending is required for it. To align CSR with the SDGs, awareness should be created that the private sector can help achieve the SDGs by creating sustainable production processes, social protection for the labour force and re-generative use of natural resources. Also, the government and other major actors should set up incentives to attract the private sector to participate in the SDG process.

However, there are some organisations that already consider the 2030 Agenda as a critical factor in their personal growth. Some initiatives are being seen to integrate CSR with environmentally-friendly operations, ethical labour practices and programmes like blood donation campaigns, free health check up and the like, which are socially beneficial. In spite of this, the efforts are still
at the preliminary phase, and the question still remains whether such programmes have been able to align their goals with those of the government and ultimately with the SDG’s. Effective programmes should be designed and implemented in order to motivate the private sector to achieve the targeted development goals.

No doubt, CSR and SDGs are intertwined, just like two strands of the DNA. So, businesses should clarify and reorient their purpose of business. It is a misnomer to believe that the purpose of business is to only make profit or to solely serve the shareholders. The ultimate aim of business is to serve society without eroding our environmental and community life-support systems by providing safe, high-quality products and services that improve our well-being.

A version of this article appears in print on November 12, 2019 of The Himalayan Times.

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