The issue of Corporate Social Responsibility (CSR) in the country is often seen in terms of financial spending in a particular area of socio-economic or development activity. In Bangladesh, it is the state-owned enterprises and commercial banks that are believed to be responsible to dish out funds for CSR activities. There is thus the debate whether these organisations, banks particularly, are doing their job right in delivering what should have been the most unblemished of services to society at large.
Questions raised on banks' CSR spending are many, ranging from how and where the money is being spent, to the most pointed of the queries - why. It has been found that in the absence of a strict policy to follow, CSR has allegedly become an instrument for diverting funds to activities which barely reflect the impression of putting up with social responsibility.
The incremental trend in CSR disbursements, even by losing state-owned banks, has brought the subject under the scanner. A look at the soaring spending, during the last five years on CSR activities, does call for justification why the money was spent. It has been found that spending by banks and non-bank financial institutions (NBFIs) in the last fiscal amounted to Tk 4.47 billions, up by more than 45 per cent compared to the preceding year's Tk 3.04 billions. Now, if the money went in the right direction with sustainable impact on the fields it was spent, the disbursing banks should be felicitated. And in order to examine the actual situation, there is the need to bring the array of activities under scrutiny by the Bangladesh Bank. Reports say that the BB is currently at work on this. Most observers believe that a thorough scrutiny would reveal a good deal of irregularities, even gross malpractices.
It has been learnt that the central bank has formulated an indicative guideline for bank's CSR spending. As per the guideline awaiting clearance, banks and NBFIs will henceforth have to spend 2.5 per cent of their net profits on CSR activities. However, losing concerns would be exempted from the spending. The guideline, reportedly, has also specified areas for CSR expenditure and imposed a ceiling on sectoral allocations, with the highest share of 30 per cent going to education annually.
In order to render the guideline comprehensive, it is important that it incorporate other priority areas where activities under the CSR funding would be able to address a host of existing as well as emerging socio-economic issues in a sustainable manner. Needless to mention, a good deal of success of the activities will rely on how effectively these are monitored, and in so doing, taking the stakeholders on board would hopefully yield better results.
Although Bangladesh has been practising CSR for sometime now, it is clear that its method and target are both narrowed down to financial allocations by state-owned enterprises and banks for socio-economic upliftment of the masses in critically vulnerable situations. However, it need not be mentioned that CSR activities can be best practised in the work culture of businesses that in other words means millions of employees directly benefit under the broad facilitating ambit of corporate welfare. It is in this context that CSR is a self-regulating business model that helps a company to be socially accountable to itself, its stakeholders and the public. By practising corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society including economic, social, and environmental. To engage in CSR means that in the normal course of business, a company is operating in ways that benefits society and the environment. This is to say that prohibiting unfair treatment thus allowing a work culture based on recognising the needs of the workers, the clientele community and society at large constitute the basic principle of CSR.
Globally, CSR practices are gradually being integrated into international business practices and hence are becoming the determining factors for market access. Thus a focus on CSR in Bangladesh would be useful not only for improving corporate governance, labour rights, work place safety, fair treatment of workers, community development and environment management, but also for industrialisation and ensuring global market access.
The fact that globally CSR is widely pervasive in a range of business activities is becoming increasingly evident. Bangladesh's exports had to suffer due to its failings and inadequacies in recent times in maintaining some of the basics of corporate business culture, particularly in respect of employer-employee relations, labour rights, environment issues, wage structure and so on. Companies, however, are now more careful than before to ensure that businesses do not suffer. But how far have our firms risen to address the corporate responsibility issues remains a question.
CSR is thus not just about targeting some social and economic backwardness in society but because of the wide-ranging objective of welfare and social responsibility, it is more about fair play, even-handedness and justice. It is time we looked at this broad aspect of CSR as an instrument of greater social welfare.
