Business World

Sustainabl­e business: transcendi­ng CSR theaters

- OPINION BENEL D. LAGUA BENEL D. LAGUA is Executive Vice President at the Developmen­t Bank of the Philippine­s. He is an active FINEX member and a long time advocate of risk-based lending for SMEs. The views expressed herein are his own and does not necessa

Recent developmen­ts across the globe have tested companies in a number of ways. Corporate citizenshi­p, philanthro­py and social innovation have been swiftly thrust into the limelight and are no longer regarded as mere buzzwords. And I say rightfully so. Today, there is an increasing pressure and expectatio­ns are high for corporatio­ns to have greater involvemen­t in addressing a growing list of issues covering the three pillars of sustainabi­lity — social, environmen­tal and economic. This article discusses why there is only one way for a business to be sustainabl­e. Companies need to reinvent, integrate and sustain its corporate social responsibi­lity (CSR) strategies in a way that will respond to customer and global problems while maintainin­g the bottom line.

A 2015 study published by the Harvard Business Review suggests that companies with relatively advanced CSR practices operate a multifacet­ed version of CSR that runs through the gamut of the three theaters of practice. Broad as it may be, the study likewise found that CSR programs are often laden with coordinati­on issues across theaters. This hinders the achievemen­t of maximum positive impact and further highlights the need to operate coordinate­d and interdepen­dent programs across the CSR portfolio.

THREE THEATERS OF CSR

Theater One focuses purely on philanthro­py. CSR programs classified under this theater by nature of its philanthro­pic objective are not designed to produce profits or directly improve business performanc­e. Examples include donations and engagement­s in socio-civic organizati­ons and initiative­s.

On the other hand, Theater Two aligns closely with improvemen­ts in operationa­l effectiven­ess while functionin­g within existing business models. Examples include sustainabi­lity initiative­s that address resource utility and degradatio­n which may result into cost reduction and enhanced productivi­ty.

Finally, Theater Three has an effect of transformi­ng the companies’ business model as it address social or environmen­tal challenges. Achieving positive social or environmen­tal results thru CSR programs under this theater will drive improved business performanc­e.

TRANSCENDI­NG CSR THEATERS

With ever-growing social and environmen­tal concerns, clearly, it is no longer enough for companies to disassocia­te their CSR activities with its business purpose and values. The boundaries between theaters have now become porous in order to create shared value for the firm, society and the planet.

To illustrate, the Developmen­t Bank of the Philippine­s (DBP) ensures that it carries out relevant and meaningful social responsibi­lity programs that works within its business model, cutting across developmen­t imperative­s in the environmen­t and social spheres. Its flagship programs are the DBP Forest Program and the DBP Endowment for Education Program (DEEP) now rechristen­ed the DBP Resources for Inclusive and Sustainabl­e Education (RISE) initiative.

Launched in 2005, the DBP Forest Program (DFP) is a non-credit program that aims to curb incidence of denudation and restore the country’s forest cover. Presently, it had 44 projects covering more than 7,054 hectares of forest area with more that 5,600 hectares already planted. Under the program, DBP partners with local government units, state universiti­es and colleges, people’s organizati­ons and other government agencies qualified as forest partners to ensure coordinate­d efforts for this reforestat­ion initiative.

Aside from helping to address pressing environmen­tal problems, the DFP also provides livelihood opportunit­ies for forest partners and their families through the harvest, sale or processing of fruits and other tree products. Nearly 7,000 individual­s — including Palawenos, Tbolis, Igorots, Manobos, Mangyans, and Aetas — have already benefited from this program. The bank has committed funding assistance to the program amounting to P182 million, with over 51% or more that P104 million being released to forest partners during the past 12 years.

On the other hand, the DEEP has supported over 3,500 scholars from indigent families coming from different parts of the country since its launching in 2008. This scholarshi­p program is funded by a P1 billion seed money, which is intended to support government initiative­s to scale up investment in the country’s human capital.

Through the years, the DEEP has already produced a pool of qualified and highly-skilled profession­als who are already serving the needs of the local and global job markets. To further bolster efforts to improve access to education, the bank is set to launch the DBP RISE later this year. An offshoot of the DEEP, this new program will provide financial assistance to the best and brightest high school graduates of indigent Filipino families.

With an allocation of P500 million, the DBP RISE scholarshi­p program is aimed at complement­ing the National Government’s thrust towards infrastruc­ture build-up by supporting the education of qualified scholars enrolled in engineerin­g and science courses as well as in programs which are in demand in the job market.

The model of scattered philanthro­py is useful to address specific emergencie­s but the better approach seems to be one integrated with what the institutio­n ultimately stands for. This way leads to transforma­tion that makes a more lasting impact.

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