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Why legislate generosity



CSR is oft referred to as the voluntary integration by companies of social concerns and close interactions with stakeholders, which include contributions of companies to sustainable development of communities.

Transparency and accountability in the workplace coupled with goodwill and generosity through company-initiated initiatives should be part and parcel of any responsible and socially-accountable enterprise. Whether big or small, a company should find ways to establish a culture of giving within its organization.

Corporate social responsibility or CSR, as it is often called, is not a new concept for us in business. CSR is defined as a type of self-regulation in the private sector, but often times, it goes the extra mile beyond complying with regulations. It is about collectively doing socially relevant activities and initiatives even without anyone mandating so. It is both doing what is correct within the organization and outside the organization. Companies can also look at CSR as a driver of competitiveness and sustainability as it draws a number of pluses, such as talents, management innovation and renewal of economic models.

However, even when the concept of CSR should be innate to enterprises, there are still some countries legislating laws on CSR. Why is that so? And should the Philippines move in that direction?

CSR in the world

Governments do take seriously the stance of companies when it comes to their CSR activities and initiatives. Simply put, since time immemorial, governments do expect enterprises to act according to what is socially responsible and morally correct.

The United States and Scandinavian countries, such as Sweden, Norway and Denmark, espouse strong CSR initiatives. After all, a number of American and Scandinavian companies lead the pack of companies globally in the CSR front. Companies like Google, Walt Disney Company and Lego led the 2018 Global CSR 100 RepTrak Report by the Reputation Institute, placing first, second and third, respectively.

According to this global survey, these companies were ranked based on their performance in these initiatives. While there are a set of requirements to comply with on CSR initiatives, the US has included the involvement of companies in their local communities, philanthropy and sponsorship. The emergence of the Sarbanes-Oxley law, adopted after the Enron scandal, has started to mandate pertinent laws and even compelling companies to implement CSR when corporate activities trigger what could be societal harm.

India was the first country to mandate companies to allocate 2 percent of their income on CSR. But do we really need a legislation to do good?

The Philippine story

As we all know very well, the composition of industries in the Philippines are mostly the micro, small and medium-sized enterprises (MSME), at about 91 percent. Mandating the MSME, which are already struggling to make ends meet for their businesses, will be cumbersome for them.

Sometime years ago, there had been proposals to pass into law and institutionalize CSR in businesses.

While this is a laudable proposal, it does not make any sense to legislate generosity considering that pertinent laws exist that protect people from fraud, occupational hazards, community environment and many more. Legislating CSR may just open up more abuses and corrupt practices. Besides, generosity may be obliterated in dictionaries and philanthropy — now a duty.

A number of corporations, foreign and domestic that are operating in the country, have established philanthropic institutions geared towards helping the marginalized and other vulnerable sectors, even without the government mandating them so.

In its own way, the Securities and Exchange Commission required corporate governance seminars, are also being fulfilled dutifully by companies to instill the value of transparency and accountability in businesses.

Why fix what is not broken?

Way forward

CSR is an integral part of an enterprise. Ensuring best practices are exercised and giving back to the community is prioritized, keeps us all level and part of a community working for inclusive growth and development.

Legislating and mandating our MSME to allocate a percentage of their income to CSR activities might be too back-breaking for them, especially for those who are also trying to give ample employment and jobs vis-à-vis working on becoming globally competitive and withstanding challenges in doing business.

Generosity should come innately and should not be imposed. There are many successful and commendable real-life stories of organizations in the country that are giving back to the community. The Philippine Chamber and Commerce and Industry, the country’s largest business organization, for one, has its own CSR Committee, which has spearheaded vital initiatives and activities, geared towards helping the community, most notably its efforts in the Marawi rehabilitation and other typhoon-stricken regions in the country.

The gift of being able to help one another, big or small, is something that we should all cherish. This is not something imposed or guarded upon. As Christmas draws near, it is significant that we reflect further on