Paul Holmes 13 Nov 2013 // 1:33PM GMT
MIAMI—Corporate social responsibility is becoming an increasingly important part of reputation management in Asia, panelists at the Global Public Relations Summit agreed. But it can backfire, especially if companies appear to be providing assistance or making donations in an attempt to seek credit.
In many Asian markets, CSR has become a very common practice, to build a positive reputation and to improve stakeholder relationships,” says Richard Tsang, founder and chief executive of Hong Kong-based Strategic Public Relations Group, which sponsored the breakfast panel.
In Greater China and India, CSR is prevalent and in Japan there is a 20-year tradition. It is becoming increasingly common in Malaysia, but remains “just an add-on” in Singapore—perhaps because people there are well taken care of by the government—while in Vietnam, CSR is still limited mostly to charitable donations.
But in all markets, there are increased incentives for corporate responsibility. In India, for example, the Companies Act of 2013 mandates that companies must spend 2 percent of their profit on CSR, while other markets—such as China and Singapore—offer tax incentives for CSR.
“Corporate philanthropy is always part of the DNA of an Indian organization,” says Roma Balwani, group head of corporate communications for Indian automotive group Mahindra. “The Tatas and the Mahindras have been doing this for 50 to 100 years. They understand the need to give back to the society because they operate in the society and they live in the society and there are a lot of problems that government alone cannot solve.”
The Companies Act, she says, was welcomed by Mahindra—which was already donating 1 percent of profits to CSR and which was introducing a new brand identity, Mahindra Rise, which had purpose at its core. “I think all forward-thinking corporates would welcome it. We used to work in health, education, and the environment. We continue to do that but we do it in a way that we can co-create with society and the communities in which we operate.”
As a result, Balwani says, Mahindra has moved from CSR to CSV, which stands for corporate shared value.
At the same time, Tsang says, companies that have sought credit for their CSR efforts—by branding the trucks delivering emergency supplies in disaster response, for example, or in asking for schools or colleges or other institutions to be rebranded with a company or family names—have suffered a backlash.
“If you’re doing CSR for the purpose of putting out a press release, you are doing it wrong,” says Stephen Forshaw, head of corporate communications at Temasek Holdings of Singapore. “Sir Martin Sorrell yesterday made the point that companies who are in it for the long-term will give back to the society in which they operate, because it is just good business.”
On the other hand, research conducted by Hong Kong Baptist University suggests that Chinese companies are more likely to use social media to support their CSR.
“I think social media makes sense, because social media is where you can initiate and encourage conversations, and engage with people,” says Balwani, who says talking about CSR on social media can prompt others to get involved.
But "it has to be authentic," Forshaw cautions. "It can't be forced or contrived."
The nature of the activity matters too—and is better when it is tied to the core business.
When Forshaw worked at Singapore Airlines, for example, “we had the ability to move people and things around the world. So the way in which we could give back was by using resources and skills we had. During the 2004 tsunami, we were able to move goods into an emergency zone quickly and effectively. And we didn’t put out a press release. We did the work diligently and quietly. We asked the Red Cross where they needed the supplies, and they pointed us to Sri Lanka.”
Today, at Temasek—a investment company—works primarily through endowments, making investments that pay off in perpetuity. “That free organizations from having to worry about whether they will get the same amount of money, whether their programs will be in jeopardy if the economy turns down.”
The other major benefit of CSR is internal, panelists agreed.
“I don’t think you can discount how important this is for employee morale,” says Forshaw. “They want to know that the companies they are working for are making some sort of contribution to society.”
Balwani agrees. When Mahindra entered the Australian market through an acquisition, the company was not well known. “I got an en email from a pilot who wanted to use our aircraft to help him circumnavigate the world and educate people about the tragedy of malaria. It helped us with the community, but it helped with the employees, who were so touched that one of their aircraft was playing this kind of role."