CSR must be embedded in businesses’ DNA for long-term benefits beyond cash

KUALA LUMPUR – It is not enough for companies to look at corporate social responsibility (CSR) simply as an activity for the company to conduct, but one that has to be ingrained in the DNA of all businesses in order to obtain long-term profit.

Participants of the Horasis Global Meeting on May 19 were of the opinion that there are profits beyond cash – something more intangible to be enjoyed if CSR is done right.

During a discussion on Embracing Social Capitalism, Member of the House of Lords, United Kingdom, Lord Simon Woolley of Woodford, said businesses must stop giving themselves a pat on the back after scattering crumbs of what they earned to society.

“Come on, business leaders; come on, educationalists; come on, policy gurus; bring creative capitalism and dynamism to a higher calling,” he urged.

Meeting co-chair Datuk (Dr) Vinod Sekhar said CSR must not be a box-ticking process because there is no “sacrifice” on the company’s part.

Instead, he believes companies are the real beneficiaries, as the profit gained by them is beyond cash.

“There is profit beyond cash, and it does increase the value of a company.

If we speak in purely commercial, capitalist terms and get analysts, fund managers, the big funds, hedge funds, and others to value companies beyond cash, they can look at a company that, for example, made RM100 million but used RM10 million to improve the lives of the employees.

“Essentially, they made RM90 million, but if they say no-no, we value ‘this’, so the profit goes up and all of a sudden, although they made RM10 million less, the value of the company has gone multiples of that,” explained Vinod, who is PETRA Group chairman and chief executive.

Chief executive of PETRA Group’s Good Capitalism Forum, Graham Kendall, said companies should not only operate based on “CSR way”, where it is an activity that is encouraged, but instead, make it socially unacceptable that companies do not contribute to society.

Akin to how drunk driving is shown no mercy in the United Kingdom, Kendall said that social counsellors should do the same to companies that do not operate on social capitalist principles.

He said companies that do not contribute to the social welfare of the people should not be given the time of day because they are just bidding for money. There is a big disparity between the rich and the poor, and this issue must be addressed.

Founder and president of renowned architectural firm Veritas Design Group, David Hashim, said businesses can succumb to the prisoner’s dilemma where, if two people are put in conflict with each other, they will fight against one another.

“However, these two individuals will do better by cooperating with one another. When applied to businesses and societies, both parties who cooperate with one another can more effectively address world issues,” David said.

Founded in 2005 by German entrepreneur Frank-Jürgen Richter, Horasis is an independent, international think tank, headquartered in Zurich, Switzerland.

Richter co-chaired the global virtual meeting titled Toward a New Era of Peace and Sustainability, with Vinod.

It gathered more than 1,000 selected world leaders to discuss their unparalleled experience to devise novel ideas to navigate through developments in the post-Covid-19 and post-Putin invasion of Ukraine. – The Vibes, May 22, 2022