CSR in ASEAN: It’s About How You Make Money

CSR. That acronym causes some people’s faces to light up, but brings a sceptical frown to others’. To many, it reeks of less than genuine altruism and is little different from public relations. Today, talking about CSR touches on issues like inclusion, responsibility, transparent norms, all within the context that what’s good for a business cannot be separated from the good of the society it belongs to – and the market it makes its profits from, one might add.

In this Q & A, ASEAN CSR Network’s chief executive officer Thomas Thomas talks to Reporting ASEAN’s Johanna Son about efforts to nurture the development – and ownership of – the norms of CSR, which is increasingly being defined as ‘responsible business’ or ‘corporate citizenship’, or ‘corporate accountability’. This is important given that ASEAN integration – with the ASEAN Community now in place – will increase the push factor for ASEAN companies to do business beyond national borders. There are already many ASEAN multinationals out there.

Reporting ASEAN: Is there a common view of what CSR is among businesses and stakeholders in ASEAN, in this day and age?

Thomas:CSR is not about how you spend money; it’s about how you make that money. It’s not about doing a lot of the sins and then trying to build a church, temple or mosque and contribute, and say God forgave you.

In 2008 we did a survey for the Ministry of Trade and Industry on the state of CSR in Singapore. It surveyed companies, large, small, joint ventures, and some SMEs as well. When the results came out, 60 percent of the companies said they’d never heard of the terminology ‘CSR’. Out of the 40 percent who said they had heard of it, two-thirds said they had heard of it, but did nothing. One-third said they had heard and are doing something.  . .  .The people who said they were doing it said they were basically about giving back to society but they were talking about philanthropy, charity, staff volunteering.

Reporting ASEAN: And today?

Thomas: Fast forward to today. In 2014, a report came out on CSR and human rights in ASEAN. We found that every country in ASEAN did a report. They all were talking about principles, values. They were talking about more than philanthropy and charity. But is it really moving?

Family-owned companies have the whole issue of what’s the legacy they leave behind. So traditionally, a lot of them were trying to create a good name and the good name they try to create for themselves was by giving away money, being part of a charity.  Actually, they are realising. . . that a social license to operate is more than just giving away money.

The state-owned enterprises, more and more, realise that the money is not theirs. They’re just stewards for the money which is owned by the people of their country.

So both family and state-owned enterprises will have to talk about long-term. . to make sure you create real value, not for shareholders but for the community as a whole.

I think there’s also a realisation in ASEAN even with the whole global movement around that businesses have a responsibility to society, to community. They have a responsibility to make sure we manage our big issues – climate change, the social tensions in society, lifting up people from poverty.

Reporting ASEAN: Are these accepted norms or views?

Thomas: Are they really mainstream? The answer is no, it’s not mainstream. Many of the big companies have not joined the bandwagon yet. They are still very focused on money, money, and part of the problem is also ASEAN.

Most of our companies, most of our governments, were just pushing this agenda called growth at all costs – just grow the economy, just grow rich. . . We need growth. I mean without growth, we can’t be more comfortable. But I think it’s how do we bring everybody up?

I think it’s a challenge for ASEAN. Looking at the post -2015 agenda, it’s talking about a people-centred ASEAN. So much so that the ASEAN Business Advisory Council is also talking about responsible business. They are talking about decent/business work agenda.  So companies say they represent people, NGOs says they represent people, governments represent people – I think we have to be very clear ‘people’ means the citizens of ASEAN.

Reporting ASEAN: If you were asked to define what’s CSR with an ASEAN flavour, what would it be?

Thomas: There is no CSR ASEAN flavour. Up till today there is no ASEAN flavour in anything, because ASEAN is so diverse. . . . I think the key thing is that ASEAN has brought peace among our kind, and that’s the biggest achievement of ASEAN.

What is the ASEAN flavour we are trying to create is . . .  .despite all our differences, there are some consistent values that all ASEAN communities have. Those values are that there is always a culture, a tradition of caring for one another. Very inherent, whether it is the ‘gotong royong’ in Indonesia or Malaysia, or the ‘kampung spirit’.

Reporting ASEAN: How about the term ‘CSR’? It has different connotations for different people.

A: The whole concept of CSR has also changed over time. Initially it was voluntary, just philanthropy and there’s little value and then it was about risk management, the whole concept of risk management. Then it became a value-added strategy.

Then there’s some concept of some shared values but at the end of the day, it is about business, you’re a part of community. Society and your stakeholders have some expectations on you as a business. How businesses operate impacts society, impacts your stakeholders. So I think every business just has to look at – who are my stakeholders, who are my most important stakeholders, what are my expectations of my stakeholders and with those expectations, how can I meet those expectations? It leads to better business.

What are the expectations of citizens? They need to ask those questions. Growth at all costs may not be the expectation of citizens. Short-term sacrifice for long-term prosperity would be all right but you can’t keep asking citizens to sacrifice for growth at all costs.

Along the way, there are some adulterations to the word CSR so we try to use ‘responsible business conduct’. Because businesses don’t mind if they’re not called responsible, but nobody wants to be called irresponsible.

Reporting ASEAN: What are the challenges — in a more integrated ASEAN, there are also more transboundary businesses. If they don’t keep to the norms at home, how about overseas?

Thomas: There are a lot of differences. One is our laws are different, the legal traditions are different and you need the rule of law. If there’s no rule of law, you can’t have governance. Without governance you can’t do many other things. . . But within ASEAN you have a fine tradition of having good laws, but also a not-so-fine tradition of not enforcing those laws. You have impunity, so I think ASEAN has challenges in some of the ASEAN countries – not all, but some.

The second point when we did the (2008) study, we looked at what were the big issues in ASEAN. These are corruption, human rights, the rule of business and human rights, and when we look at the haze, it’s how we do agriculture. Some companies behave well in one place, but may not necessarily behave well in others.

Reporting ASEAN: The idea of pushing CSR in ASEAN or more ASEAN businesses – it would be as a norm right? Because obviously it’s not  law, it’s not a code.

Thomas: Some things are law. But having laws alone is not going to make any difference unless those laws are enforced. Laws by themselves cannot cover everything. There are a lot of things that have to be the norms of behaviour, which is customary. . . . We need to create a culture of responsibility. This is the end goal, a culture of integrity.

Reporting ASEAN: I was curious to find out what the reservations might be about CSR norms or where the learning gaps are, if you want to call it those.

Thomas: People think it is expensive when it’s not expensive, it’s an investment. People see it as a cost. A lot of time we don’t reward the good people sufficiently. In your homes, do you reward the children for good behaviour? You also punish for bad behaviour. But once you are enterprises, why is that not so?

I think a lot of times, even in bribery cases, people pay bribes for the company. The guy who actually does it gets fined, goes into prison, loses his career but the corporate body and the directors get away with it. So I think the question is, can we have corporate liability?

Reporting ASEAN: Is there a timeframe for the CSR in ASEAN program? Because it says the vision is 2020.

Thomas: I think you put a timeline, a deadline to galvanise action, to focus. But CSR will always be a journey. So the end point will always move.

Reporting ASEAN: But the three issues like corruption, human rights, food security, sustainable agriculture. These issues came from the business sector themselves?

Thomas: We found these are the most critical problems within ASEAN. But there are also other things that also need ASEAN, for example, natural disasters. What’s the role of business in addressing natural disasters? What about the environment stewardship? In business and agriculture things, we talk about stewardship. But what about environmental stewardship?

Reporting ASEAN: Does the launch of the Community give a push for people to be more aware of their social responsibility?

Thomas: I believe the answer will be yes. If you talk about a people-centred ASEAN, a people-centred ASEAN will be an ASEAN where people prosper. So a people-centred ASEAN will mean businesses have to be responsible. A people-centred ASEAN will have to mean that we eliminate some of the bad practices, like corruption and bribery. It also means that we have to respect human rights and the way businesses act.

Reporting ASEAN: If a business in ASEAN is interested in pursuing or building or learning CSR, they can be part of this program to develop it?

Thomas: In each of the ASEAN countries we try to have a network. We are a network of networks. . . . We’re hoping to get more of these companies to join us as corporate partners. So we have growth in numbers, so it’s an indication to the rest of the world that yes, there are a lot of companies willing to participate.

Reporting ASEAN: Is there a figure on this participation?

Thomas: We have three companies – Intel, Nestle and Hitachi. We hope they’ll grow. . . and we hope maybe by the end of next year, a hundred companies.

Reporting ASEAN: Do you have cases studies of where there has clearly been a change inside companies in this CSR effort?

Thomas: This is a journey. The most important thing is that people start the journey. Whether it’s baby steps or taking a big leap, it’s a journey.

(END/CSR in ASEAN Series/Reporting ASEAN)