Sustainable business: transcending CSR theaters

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.

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 necessarily reflect the opinion of his office as well as FINEX.