Losses may shrink CSR appropriations

Vol. XXII, No. 109Monday, January 5, 2009 MANILA, PHILIPPINES
BY DON GIL K. CARREON, Reporter


Losses may shrink CSR appropriations

CORPORATE SOCIAL responsibility (CSR) advocates are hopeful that companies will not cut budgets for programs that seek to improve the quality of life of employees and their families, as well as local communities and society at large, even as the slowing global economy shrinks profits.


Rene M. Fortunato, assistant director of the corporate citizenship advocacy group Philippine Business for Social Progress, expressed optimism that the giving would continue. "If you look at the context of how firms have given during disasters, you can see that they are very generous, so I am hopeful that most likely, the giving will continue," he said in a telephone interview.
League of Corporate Foundations (LFC) Chairman Marilou G. Erni said the slowing economy was a perfect opportunity for companies to step up their practice of corporate responsibility. "The challenge for firms is to be able to create wealth at the bottom of the pyramid since the poor will be the one most affected by an economic slowdown," she said in a separate interview.
Companies normally allot 1% of profits to responsible business programs.


Mr. Fortunato noted that for the fiscal year ending in October 2009, the foundation was looking at raising P450 million — the same amount it had raised in the previous year — from member corporations and other multilateral organizations for projects promoting environment protection and greater access to health, education and livelihood programs for the poor.


Ms. Erni said LFC members were moving towards the same direction, in which their economic interests are in harmony with their social and environmental agenda.


She added that it is important for companies to identify programs where they can establish partnerships with other sectors to maximize the effectiveness of these projects.


But Mr. Fortunato admitted that some companies might not be able to meet their commitments. "There are some companies whose CSR budgets are a percentage of their profits. If they suffer losses next year, you can’t expect them to give," he said.


LFC member firms would likely retain their corporate responsibility budgets, Ms. Erni said. "If there ever will be cutbacks, these will be offset by some firms increasing their CSR spending," she said, adding that both big and small companies must do their part.


One company that intends to proceed with its corporate citizenship program is Mister Donut. The pastry chain plans to make half of the 110 company-owned stores environmentally friendly in the next five years.


Aside from using energy-efficient lighting and cooling systems for their new stores, the donut chain will also use environmentally sustainable materials in its containers, table counters and kitchen surfaces.


Alden M. Castañeda, Mister Donut vice-president for corporate marketing, noted that while the new materials and technology would be more expensive, the firm would eventually realize savings from these investments.


"Since we are targeting families and their children, we also thought it appropriate that our business helps in preserving a better future for the next generation," he said.

Sy-led SM Investment Corp. (SMIC) is likewise committed to funding its responsible business programs. SMIC Vice-President for Investor Relations Corazon P. Guidote said they would maintain their budget since operations were unlikely to be affected this year.


Ms. Guidote could not immediately recall SMIC’s budget for CSR, but said it would likely increase by a little from last year. "It’s a symbiotic relationship. If we give back to the community, then they can grow with us and eventually become our customers," she said.