• Michael Padilla-Pagan Pay

Corporate Social Responsibility is fixable

I met with a possible new energy customer and we spoke about CSR (Corporate Social Responsibility).  In my years in this business I have witness companies operating in developing countries use corporate social responsibility initiatives to position themselves as development agents and friends of the host communities. But in places like South Africa, and Middle East and for that matter LATAM initiatives aren’t achieving the objectives they were designed to meet. Animosity between corporations and hosting communities persists. We understand why companies engage in corporate social responsibility projects.  One that I hear often is a growing realization that they have a compelling moral, ethical and legal obligation to protect their operating environment as well as stakeholders. They’re also motivated by strategic and economic imperatives.

The know how:

Our work in these locations confirms 2 key factors. The first is that communication plays a huge role in corporate social responsibility projects. The second is that many have been derailed by uninformed assumptions about the needs and priorities of host communities. Our work shows that corporations should consider cultural and traditional values when initiating projects. Not doing so could prove expensive as cultural and property rights practices differ from one jurisdiction to the other. In most societies, land is central to people’s existence and identity. Cultural beliefs and traditional practices are often tied to the land. In being brought in by one customer late in the CSR program we found out that , it was inferred that a company does not see anything untoward in acquiring graveyards and compensating families to exhume and re-bury their ancestors, as communities consider this to be taboo and a process that could invoke the wrath of their ancestors.

 As you can image it is imperative for corporations – particularly multinationals – to foster cultural understanding with local communities. Adopting a consultative decision-making approach is essential. If initiatives are viewed as being community oriented, then it makes sense to involve the intended beneficiaries – both in initiation and implementation.

We see that a lot of the CSR efforts have become, at best, misguided attempts to advance the common good without much in the way of substantive value and, at worst, self-serving and profit-seeking performances and really lack of the social fabric and understanding social risk.

Understand Social Risk:

 We work with customer to theorizing CSR and define the outcomes, but first we must understand why the customer is looking for a CSR program as we have witnessed a vast majority of CSR efforts are largely immeasurable. Reality is Corporations lack the tools they need to measure social impact, which prevents them from distributing funds to successful initiatives and reduces accountability in cases where CSR efforts do not work or make matters worse. The few tools companies do have to measure CSR performance are largely imperfect; many depend on companies’ own data reporting, as opposed to objective outside measurements.

I am not trying to give a shameless plug but the reality is Social Risk Analysis is the tool companies need to get their Corporate Social Responsibility programs back on track and if you do not have such a tool, then engage in a company who can provide this, such as ICESERVE24.

Overall, we found that companies were willing to embrace corporate social responsibility. This was often expressed in their vision and mission statements and through considerable monetary allocations towards corporate social responsibility initiatives. But many fail due to cultural insensitivity and misplaced communication strategies.

Here are the facts: Insight into Social Risk provides a repeatable, reliable way to gauge the effectiveness of CSR efforts, by measuring a single variable, public sentiment. Employing a company who understands social impact, can create a positive impacts for communities, consumers, and corporations and in turn granting CSR the respect it deserves and delivering in the promise you made!


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