Firms can gain much from good corporate social practices

Source: The Star Online (Malaysia), 24 June 2004

SURVEYS show companies that practise good corporate social responsibility (CSR) benefit significantly in terms of better financial performance, lower staff turnover, enhanced brand image, and a competitive advantage over their rivals.
Securities Commission (SC) chairman Datuk Md Nor Yusof said there was increasing global awareness among established companies to adopt good CSR.

Companies that adopt good CSR should not view the act only as a social obligation to the community. It can also provide companies with a competitive advantage, he said in Kuala Lumpur yesterday at the one-day CSR: Creating Greater Competitive Advantage The Role of CSR in Achieving Vision 2020 conference organised by the British High Commission and the SC.

CSR is defined as a concept whereby companies integrate social and environmental concerns in their business operations usually on a voluntary basis.

Md Nor said some local companies that had adopted CSR were reaping the profits, both in a social sense as well as financially.

Local companies that have embraced CSR include British American Tobacco (M) Bhd, Shell Malaysia, Tenaga Nasional Bhd, Telekom Malaysia Bhd, Petronas Dagangan Bhd, Golden Hope Plantations Bhd and Sime Darby Bhd.

Deputy Prime Minister Datuk Seri Najib Razak, who gave the keynote address at the conference, told reporters later there was no need for the Government to provide incentives for companies to adopt CSR practices as this should done on a voluntary basis.

Earlier in his address, he said companies should not view CSR practices as acts of charity. On the contrary, effective adoption of CSR has the twin effects of improving both short- and long-term corporate performance, he said, adding that companies with CSR were able to retain quality workforce and attract more institutional investors.

Moreover, the perception that a brand was socially responsible could influence customer loyalty, lender and investor scrutiny and ultimately reduce the cost of capital, he said.

Malaysian companies with strong brands would also be better able to compete in the global market.