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Does Corporate Social Responsibility come in sizes?
06 Mar 2014
So much has been written about Corporate Social Responsibility (CSR) over the past few years. So much is expected from it. But what is CSR? Is it just a ‘nice’ optional for large companies to plug into their corporate profile or is there more to it?

Perceptions about CSR and its value for organisations differ considerably. Too often, top executives shy away from CSR perceiving it to be yet another source of pressure, another yardstick to match up to, another drain on their capital. Others insist on looking upon CSR as a fad that will wear out over time, therefore not worth considering further.

But CSR is yet immune to signs of wear and tear. The European Commission defines CSR as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.” This definition already gives CSR a new dimension – pitching it as an approach rather than an off-the-shelf solution.

The First CSR toolkit for SMEs in Malta
The Malta Chamber of Commerce, Enterprise and Industry joined forces with Bank of Valletta to come up with the first ever CSR toolkit for SMEs in Malta. The idea was to call upon local players that had already taken CSR practices on board, thereby tapping local best practice that had been tried and tested. This led to a number of workshops involving representatives from key local organisations. The project, which was three years in the making, aimed at mapping out the conduct and development of CSR initiatives by Maltese organisations, giving additional promotion to the concept of responsible entrepreneurship within the business community whilst maximizing the benefit of CSR for both the business community and society at large. The end result was a toolkit with ten practical steps that any SME could take on board in order to adopt a CSR framework to the operation of his/her business.

What did the Project show?
One of the first phases of the project was a profiling exercise of the business community. It was intended to shed light on the type of CR initiatives that were most prevalent amongst local businesses. It would also help determine the extent to which social responsibility feature in business strategies of participating companies. The results were not necessarily what one had been expecting. They showed that in reality 88% of companies surveyed actually engaged in CSR related activities. However only 55% of companies of them communicated their CSR activities to their stakeholders. In itself this was quite surprising on two fronts:

a) The percentage of companies that actually engage in CSR activities is higher than expected. How come? Charles Borg, Bank of Valletta CEO shares his experience which resonates similar experiences of other companies, “Way back in 2006, when the Bank’s executive management started discussing whether or not the Bank should take CSR on board, I remember distinctly that one of the things that took us by surprise was the extent to which the organisation was already compliant with CSR thinking. Even if the term ‘CSR’ was new and unknown to us, we had ethical policies, policies to encourage work-life balance for our people, measures to safeguard our customer as well as a holistic Community Programme through which we ploughed back a percentage of our profits into the community.”

b) Many aspects of CSR nowadays sound like ‘common sense’ and many organisations, including SMEs and microenterprises take them on board without the realization that it is CSR. From this, it follows that since they are unaware of abiding to CSR principles, they are hardly likely to communicate their efforts, neither to their people, nor to their customers or the market in general.

Why should an SME bother with CSR?

Well, why not? CSR is a framework, a practical one in many respects that helps an organisation, irrespective of size and nature of business, to operate responsibly. Ultimately no business operate in a vacuum, and any enterprise, however small is bound to leave an impact on its immediate community.

Furthermore, as the EU itself emphasizes, one need not opt for a fully-fledged CSR programme, but may get acquainted with CSR principles in phases, sufficiently small to be managed. Moreover as research around Europe has shown, embracing CSR has benefits for companies – it tends to improve their operations and brand image, therefore impact positively on their bottom line.

The Benefits of spelling out a CSR strategy

Research around the globe has repeatedly shown that a CSR strategy does spell benefit to the organisation. It can help achieve and retain focus on procedure and practices that would otherwise be ignored. Articulating policies and visions means that employees are more likely to notice and adhere to them. Furthermore, it will increase trust and predictability if these policies are known to customers and other stakeholders.

Is there a future for CSR among the smaller entities?
What this project has shown to all involved is that large entities do not have exclusivity over CSR. If one looks upon CSR as a framework through which one manages the company’s relationships with the different stakeholders, a lot of scary myths are dispelled, and CSR remains in its pure essential form – an approach of relating to and managing relationships with the different stakeholders.

The CSR toolkit for SMEs can be downloaded from here

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Bank of Valletta p.l.c. is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap.370. of the Laws of Malta).