Reports

CORPORATE SOCIAL RESPONSIBILITY: TRANSLATING RESPONSIBILITY INTO PROFITABILITY
WEDNESDAY, DECEMBER 6, 2006
2:00 PM-4:30 PM

Moderators: Corrie Drummond, Pan American Development Foundation

Discussants: Patrick Andrews, Scotiabank; Paul Fisher, Organization of American States; Steven Jesseph, World Association for Responsible Apparel; Jake Kheel, Grupo Punta Cana; Jorge Nowalski, International Center for Sustainable Human Development; Ramiro Prudencio, Burson Marsteller; Michael Ronan, Royal Caribbean; Alysia Wilson, U.S. Department of Commerce

The Context:
Corporate social responsibility is the commitment of business to act ethically in its dealings with the public, its employees, customers and the natural environment without compromising shareholder value and business continuity. In the Caribbean Basin, the view is that CSR is a philanthropic exercise, only to be pursued by large multinationals. Few regional businesses have fully grasped the CSR concept and been able to translate it into profits and other corporate benefits.

The Challenges:

• Can regional companies remain competitive and attract investors without implementing CSR programs to adapt to increasingly socially conscious market clients and investors?
• What CSR practices including those in small and medium enterprises have benefited business by increasing productivity and profitability and reducing shareholder risk while improving public image, access to capital and new markets?
• Can we highlight useful case studies of the right approach (and the wrong way) to implementing CSR strategies?

Points and comments brought up in the session:

• Corporate social responsibility is a relatively new and evolving concept, which is gaining recognition and popularity in a variety of circles.
• Because it is an evolving concept, it is difficult to pin down exactly what is meant by the term, whether standards for reporting about CSR initiatives exist, and how to compare companies according to established indicators.
• Sustainable CSR activities contribute to a company’s bottom line as well as to the interests of its stakeholders.
• Actions that could be taken by governments, civil society, the private sector, and clients to promote corporate social responsibility were identified:
  • Governments:
    • Incentives (examples below)
      • Taxes – favorable tax structures, deductions and other mechanisms which encourage companies to give back to communities through CSR initiatives
      • Customs facilitation – Paraguay offers to facilitate customs processes for companies which agree to certain standards with regard to labor, environment, and other areas of CSR.
      • Awards – Recognition by governments of responsible business practices which improve corporate image
    • Regulations and penalties - minimum standards regarding child labor, contamination, transparent reporting of company finances and other factors which are developed in coordination with the private sector and civil society
  • Civil society:
    • Recognizing good practices by companies
    • Calling attention to practices that need to be improved (ex. of Human Rights Watch, which issued a report about child labor practices with Coca Cola, because of its sugar suppliers)
  • Companies:
    • Incorporating CSR internally as part of overall business practices
    • Engaging in with public policy makers in an ethical manner (ex. Grupo Punta Cana advocated for strict environmental regulations for hotel and tourism companies to protect the resources which are utilized through the tourism industry)
    • Sharing experiences with other companies
    • Undertaking strategic alliances with the public sector and with NGOs for the implementation of programs with communities
  • Clients:
    • Reward socially responsible business practices by choosing a particular company’s products
    • With public-private partnerships and strategic alliances, the private sector should seek ways to complement the efforts of governments and coordinate with civil society.

Questions and Answers:

• Is CSR a trade issue and should it be tabled in trade related forums? It was noted that CSR is hardly ever discussed as a major policy issue in trade related forums but should be since trade is directly impacted upon by labor, environment and transparency issues. Several companies deal with such matters in isolation, often negotiating each issue on its own rather than taking a holistic and comprehensive strategic approach which may produce better overall results and require fewer resources.

Recommendations made:

• CCAA can provide a central database of CSR information resources with specific focus on Central America and the Caribbean. This database should feature brief summaries of the important and pertinent information provided by each information source or link. This can be utilized by CCAA members and can be a useful, efficient tool for information dissemination.
• Caribbean and Central American organizations with interests, activities and information on CSR practice and policy require a forum for more frequent discussion of these matters and sharing of information, systems and ideas. CCAA can provide a forum for this, identify and lobby for a suitable forum or institute a plan of action to make this a reality before Miami 2007.

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