Wednesday, July 04, 2007

Companies aim to use CSR to boost image in the Philippines

CSR stands for Corporate Social Responsbility. It is a response from businesses for demands that they respect human rights, the environment and the communities in which they operate.

For some it is a genuine attempt to change company practices for the better, but for others it is an attempt to improve their public images so they can continue with business as usual. Claimed voluntary action is used to argue against regulations. Nestlé is firmly in the second camp. Its Chief Executive, Peter Brabeck-Letmathé is on record as saying that support for good causes has to benefit shareholders. This is not altruism. See:

And Nestlé's record on transparency for its activities is abysmal. See:

In short, Nestlé brings CSR as a whole into disrepute, as we reported in Update 38.

Now a journalists' organisation in the Philippines, called Newsbreak, is being funded by the British Embassy to try to get the media to publicise the CSR activities of businesses. Yup. That's right. Our government is pushing the corporate agenda of CSR.

This is taking place in the Philippines, remember, where the Ministry of Health has been taken to court by the pharmaceutical industry as it tries to strike down baby food marketing regulations. You can view a film from UNICEF Philippines showing the type of promotion on its impact on infants and their families at:

According to one definition: "Corporate Social Responsibility (CSR) is a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis"

Newsbreaks Business editor encouraged journalists to look at CSR closely. The Newsbreak report states: "Rimando encouraged reporters to dig deeper. 'Journalists need to put CSR activities into context, and report them as part of a bigger story on a company’s activities,' she explained. 'Where is the budget coming from? If it comes from the marketing budget, it comes across as just public relations. But if it’s embedded in corporate activities, then that’s genuine.'

Is it? I suggest journalist need to dig deeper still. Nestlé claims to have systems in place to ensure the baby food marketing requirements are followed, but its policies and practices show that it is, in reality, malpractice that is institutionalised. The recent case of Nestlé marketing in Bangladesh illustrates this. See:

But Newsbreak is encouraging journalists to see CSR stories as good news stories. One of those present raised a good question: "If you [businesses] want to be charitable, then just give piously. Why do you need publicity?"

Another good question is, why doesn't Nestlé stop publicing how well it claims it is following the marketing requirements foor baby foods and instead actually bring its policies and practices into line with them? That would help to save infant lives and ultimately bring an end to the boycott.


Unknown said...

Interesting that you argue CSR should be completely altruistic and 'pious' without any thought of self gain – yet on the same page you have an advert offering a free gift to anyone who becomes a member of Baby Milk Action. You can't have it both ways. I see no problem in people or companies getting something out of being 'good' if it's on offer. It's the classic win-win situation. If there was no reward for being good - whether that just be in the form of gaining a 'feelgood' factor or whether it be receiving something more tangible such as a growth in customer orders or a free cuddly toy, what's wrong with that? I'm not saying there has to be a reward, but if there is, then so what? It doesn't mean the charitable act is any the less useful or heartfelt.

Mike Brady said...

Peter, it is interesting that you see our Summer promotion as equivalent to CSR. We are offering an inducement for the financial gain of Baby Milk Action - to help bring in income during August, which is a slow month for sales. Click the link and you will see we are very open about this. We are not giving a free gift because we are altruistic or pretending to be. It is rather a great offer to get people to spend money in our on-line Virtual Shop in August.

Companies also conduct free gift promotions, which is not CSR - it is a marketing strategy. I'm not sure why you portray it as CSR?

You are correct that often CSR as practised by the likes of Nestlé is also about offering inducements for finanacial gain - that is the CEOs stated position. But it is not a 'win-win' situation when Nestlé dresses its support of good causes up as altruism and uses it to try to improve its image so it can divert attention from harmful practices.

It is similarly damaging the the public good if the corporations in the Philippines gain publicity for CSR while continuing to pursue their legal challenge to the Ministry of Health's marketing requirements. Dropping their legal action would be more constructive than any distribution of largesse.

Lala Rimando said...

First things first: CSR is not just about philanthropy or donating books to the chairman's wife's favorite charity. Those are focused on how company spends its profits, not how it makes them. CSR is how you make, take, and give profits. This is what we try to share during our media trainings in the Philippines.
Journalists are stakeholders in how CSR is shaped and practiced in our country and elsewhere, so we are stakeholders in the discourse, and we need to be equipped in how to tackle CSR issues. Check out for more independent analysis and coverage of CSR in the Philippines.
By the way, CSR stories are not supposed to just be about the feel-good ones, but also on corporate IRresponsibilities. Hopefully by putting these misbehaviors out in the open, the companies will eventually genuinely shape up, not just cover these up. Consumer groups can boycott, socially responsible investors can pull out their money, and the media can name and shame--if needed.
Meantime, there are companies that try to live and breathe CSR daily, not just when the TV cameras are rolling. These are the inspiring stories. CSR is in the way they treat their employees, conceptualize the products, engage with suppliers in poor countries, and market, distribute and sell the products to you and me. They cannot claim to be CSR practitioners/advocates if, first of all, they violate the legal parameters for doing these aspects of their business.
Personally, I don't castigate those who profit when CSR becomes their business philosophy. That's how "going beyond compliance" gets support of everyone in the organization. What I don't support is putting a PR spin into a patchy, non-sustainable, feel-goody philanthropic work, esp. when the company's reputation as an employer, supplier, marketer, player in a poor country, does not pass legal and, more importantly, ethical standards.
It's important to keep these in mind when we are measuring a company against their CSR pronouncements.