Nowadays, corporations in Malaysia are actively involved in charity-giving and community services under their Corporate Social Responsibility (CSR) policy and initiative, in which, they contribute in many ways to the society, including cash, products, services, employee volunteer time, use of facilities, entertainment, dinner and other functions. These activities are done under catchy themes, such “Giving Back to the Society” or “Making a Difference”, and are amplified in corporate annual reports, websites and brochures.
Inevitably, perception on CSR initiatives so far tend to be no more than exercises that are in complying with the regulator’s requirements, company profile-building and public relations. CSR and business operations seem to be moving in two separate ways. On the one hand, in doing businesses to maximise profits, corporations would be far from thinking about the hardships that the general public has to go through in their daily life. On the other hand, CSR activities are designed to give back part of the company’s earnings to cash-strapped institutions like orphanages and old folks homes.
Such a perception is not without basis, considering the real economic situation that the public facing in their daily life. As be seen today, businesses tend to move swiftly in passing the cost and burden of the increase in prices to the public. Invariably, when there is increase in the prices of oil, raw materials, tariff, taxes, and other inputs that lead to the increase in the production and delivery of goods and services to the public, the burden will be passed on to the end consumers. One question to be raised here is why can’t corporations involved in businesses, that earn billions yearly as revealed in their annual reports and financial accounts, make some sacrifices to absorb the escalating costs, and therefore, alleviate the burden on the citizenry. Would they be willing to do it in the name of CSR?
Another issue to contend with is the attitude of businesses involved in providing essential goods to the people. Occassionally, we come across situations whereby shelves of hypermarkets or other retail outlets run empty of essential goods that we need on a daily basis. Such a scenario is common especially during festive seasons. Obviously, to earn windfall gain in business is quite simple-withhold the commodity from the market until it becomes so scarce even to those who need it most. In this regard, the Government next will have to step in for negotiations. For the sake of the citizenry, the Government may have to abide by the demand of the businesses to increase the price. Thus, two issues will arise, first, whether the Government has to increase the subsidy or the people need to pay from their own pockets. But inevitably, the winners are the businesses.
Not too long ago, we had faced shortages of essential goods in the market such as sugar, flour and cooking oil, until the Government had to introduce limits and quotas for the purchase of these items. Buyers had to wait in long queues to buy a limited amount of the goods. Ironically, when prices increases were annouced, the goods suddenly found their way back to the shelves in abundance. In CSR disclosures, companies may provide colourful reports to say that they have given so much and so much to orphanges and old folks homes, but how do we judge these corporations with regard to their CSR initiatives?
These situations demonstrate that while corporations may embrace CSR in their annual reports, websites, and brochures, the ways in which they develop and maintain their operations are often questionable.
In relation to this, Islam severely condemns any forms of market manipulation that cause hardship and burden to the people. The Prophet (peace be upon him) denounced manipulators in very strong words, saying, “If anyone withholds grain for forty days out of the desire for a high price, Allah will renounce Him.” (Reported by Ahmad, al-Hakim, Ibn Abu Ahaybah, and al-Bazzar). The Prophet also said, “If anyone withholds goods until the price rises, he is a sinner.” (Reported by Muslim.)
In terms of CSR compliance in Malaysia, the initiative has been undertaken by Bursa Malaysia since 2006, with the introduction of a voluntary CSR Framework for companies listed on the Malaysian stock exchange. The focus of the framework is on the four aspects of CSR, namely marketplace, workplace, environment and community. Initially, the framework served as a guide to companies to understand, internalise, and implement CSR across their business operations, and hence, to encourage the reporting of CSR activities on a voluntary basis. Bursa Malaysia since then had taken another step forward. With effect from December 31, 2007, Malaysian public-listed companies are required to disclose a description of the CSR activities or practices undertaken by the listed issuer and its subsidiaries or, if there is none, a statement to that effect, in their annual reports. This requirement has been incorporated into the Listing Requirements of Bursa Malaysia (Appendix 9C, Part A, paragraph 29).
In serving the society, business corporations have obligations to the people and environment in which they operate in, which go simply beyond complying with laws and regulations. Thus, in this regard, a strong CSR policy shall also integrate the element of social well-being with business goals. This is because business activities are inherently based on two values, which are integrity and trust. When these two values fail, we have an environment that will not be conducive for the society and businesses, and eventually will distort the overall economic growth. This may be the scenario in Malaysia today, whereby, a corporation may have engaged in philanthropic activity, charity-giving or community service in the name of CSR, but at the same time, causing hardship and burden to the government and the people. This scenario must be changed. CSR must be seen as operating a business in a manner that is in line with the public expectations, where there is no separation between CSR initiative and business conduct. Meaning which, the good values that are demonstrated when implementing CSR activities must also be ingrained into business decision-making processes. This will eventually contribute to the benefit of both the corporation and the people in the long run. Indeed, this is what “Giving Back to the Society” or “Making a Difference” shall be based upon.