‘The Emerging Need of Corporate Social Responsibility in Pakistan’

There are several definitions of CSR. According to World Business Council for Sustainable Development, it refers to the company’s devotion to contribute to the sustainability of economic development, in cooperation with the unemployed, their families, the local community and society in general, towards the goal of improving the quality of their lives. In European Union’s ‘Green Book’, it is mentioned that being socially responsible doesn’t mean the fulfilment of legal obligations but going beyond mere law abidance and making additional investments into human capital, the environment and relations with stakeholders.

It is becoming crucial that CSR takes its place in the corporate culture of Pakistan given the prevailing socioeconomic conditions. The Constitution of Pakistan 1973 enunciates some ‘principles of policy’ related to social justice and economic well-being of the people. They are also known as the basic human necessities because the list includes promotion of education, removal of illiteracy, securing humane conditions of work, creation of adequate livelihood and provision of basic amenities; i.e., food, clothing, housing, education and medical relief. These principles are same as those that are included in the United Nations Declaration of Human Rights. The government alone cannot be expected to meet all these challenges for its citizens. However, it is need of the hour that civil society members and corporate sector join hands and share the services of the state.

 In this regard, former Prime Minister, Mr Shuakat Aziz, proposed that all companies should annually contribute or donate, in accordance with international standards, a minimum of 1% of their profit before tax for social development of the country. He further suggested that such companies should be appreciated with public awards for their philanthropic services. CSR objectives are also contained in Islam’s socio-religious fabric. Islamic teachings emphasize the importance of charity and care for the underprivileged and calls for an equitable redistribution of wealth in form of ‘Zakat’ which is one of the five pillars of Islam.

The ‘Asian Institute of Management’ (AIM) established the ‘Asian Forum on Corporate Social Responsibility’ in 2002 which annually meets to recognize and honour the Asian companies. CSR Awards are based on the following five categories: best workplace practices, concern for health, environmental excellence, poverty alleviation and improvement in education. In 2006, Engro Chemicals Ltd. was declared the winner for its concern in health category. Whereas, in 2007; Unilever won the award for supporting and improving the education. The corporate leaders should learn from these examples and start playing their healthy role for the welfare of the community at large. Efforts are required by the companies to list down their CSR policies and such policies should be made a part of the Code of Corporate Governance for listed companies.

Social responsibility in business is related to the obligation of companies to increase their positive role for the benefit of society.

In Pakistan, companies mostly work to secure their economic motives. In essence, satisfying consumer demands has become an increasingly important business goal. There is no presence of the concept that satisfaction of the general social interests deals with the broader spectrum of ruling interests in social environment. Taking Pakistan into the wave of this emerging concept among developing nations requires collaborative efforts which ensure responsible thinking and practices.
The changing picture of business across the world due to globalization has pushed the governments to regulate business and develop policies that match with the emerging needs of society. According to the Islamic way of life, promotion of mutual benefit in business interactions proves to be the best source of income. Islam approves acceptable working conditions and Muslims are accountable for their effort towards Huquq-ul-Ibad (Individual Rights) and care for society, and sharing the wealth with have-nots. Therefore, it’s all the more important for the corporate leaders of Pakistan to be responsible towards their obligations that they owe to the community at large.

The newly-installed government should play a positive role in governing the tenants of CSR. It’s a challenge to the new rulers that how they work with companies to promote corporate values as well as respect human rights and labour rights. Supporting economic growth establishes a support for democracy and it is necessary that the government focuses on transparent laws and financial systems.