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28 RasGas MAGAZINE

Why botherwith CSR

Corporate Social Responsibility

The ideas behind CorporateSocial Responsibility are part o

the modern business landscape,but there is still some scepticism

about its value

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Thirty years ago anyone who argued that companies

should strive to be good corporate citizens and givesomething back to society risked being written off as aneccentric. Today, however, Corporate Social Responsibility(CSR) is widely accepted as an essential componentof business ethics and a key management strategyin most big companies. CSR has become linked withthe pressing need to conserve the planets diminishingresources because the future of mankind everywhereis threatened by the degradation of the environment inwhich we all live and work, as one commentator putit. That threat has spawned a green revolution anda search by governments, businesses, employees andcommunities for ways to reduce their carbon footprint.

Although most people in the developed world believethat corporate leaders should have wider obligations tosociety than simply optimising shareholder value, CSRscritics continue to question the concept. Even thosewho expect corporate policymakers to look beyond thebottom line arent always clear about what it means. TheWorld Business Council for Sustainable Developmentsuggests that CSR is the continuing commitment bybusiness to act ethically and contribute to economicdevelopment while improving the quality of life of the workforce and their families as well as of the localcommunity and society at large.

The arguments for and against However sensible such a definition may sound, thebelief that business leaders should pursue wider goals ischallenged by ardent laissez-faire theorists, free-tradeadvocates and anti-globalisation activists. Foremost

among the sceptics was eminent economist MiltonFriedman. In Capitalism and Freedom he argued thatthere is one and only one social responsibility of business to use its resources and engage in activitiesdesigned to increase its profits so long as it stays withinthe rules of the game, which is to say, engages in openand free competition without deception or fraud.

Mallen Baker, a widely respected advocate of CSR,summarises the arguments against it in this way: businesses are owned by their shareholders. Any

money they spend on so-called social responsibility iseffectively theft from shareholders who can, after all,decide for themselves if they want to give to charity

leading companies that report on their socialresponsibility are insane the most effective business

leaders dont waste time with this stuff Our company is too busy surviving hard times to dothis. We cant afford to take our eye off the ball. Wehave to focus on our core business

I have no time for this. Ive got to get out there andsell more to make our profit line

RasGas MA

However, enlightened business leaders who integrate

CSR into their overall business strategies respond bypointing out that corporations do have responsibilitiesto other stakeholders as well as their shareholders.These include employees and their families, customers,suppliers, industry regulators, governments and thecommunities and countries in which they operate. Andthey remind critics that CSR also has a strong elementof self-interest. Its about building relationships withcustomers, attracting and retaining talented staff andmanaging risk and building their companys reputation.After all, as one CSR advocate explains, the stock-market capitalisation of a company often exceeds thevalue of its (narrowly defined) tangible net assets andthat share price premiums partly reflect its reputation.Reputation is something all managements care aboutand seek to nurture.

A significant reputation-building component of CSRis the concept of 'giving back'. Last year a UK PR Week /Barkley public relations cause survey found that morethan ever, consumers expect companies to give back.Indeed 90.7 per cent of 225 consumers polled believedit is important for companies to adopt programmes thatsupport causes and charities. The survey also questioned143 corporate marketers and found that 56 per centof those with 'cause programmes' cited heightenedemployee morale and employee retention as a keybenefit of such efforts.

Giving back pays off Inevitably some countries and companies are leadingand some lagging in embracing CSR and implementing

social welfare and environmental sustainabilityprogrammes. AccountAbility, a British non-profitorganisation, and Fundacao Dom Cabral, a Brazilianbusiness school, have created the ResponsibleCompetitiveness Index, which ranks the relativeperformance of individual countries efforts to promoteresponsible business practices. The 2007 index covers108 countries comprising over 96 per cent of globalgross domestic product. Of the top 20 countries, the fiveleaders are Sweden, Denmark, Finland, Iceland and the UK.

Many well-known companies are in the vanguardof CSR and are actively pursuing energy conservationand sustainability programmes that help protect theearths resources. Among them are leading energyindustry companies including RasGas and its two major

shareholders, Qatar Petroleum and Exxon Mobil whichshare a conviction that taking CSR seriously is vital.In 2006, for example, RasGas launched its far-reaching'The Energy to Unite' CSR programme, as part of whichit engages regularly with its local community.

Whatever Milton Friedman said, giving back clearlyhas benefits for business and the global community.

Corporate Social Responsibility

Enlightenedbusiness leaderpoint out thatcorporations haresponsibilitiesnot only to theirshareholders,but to otherstakeholdersas well