REPORTING requirements under the Code of Corporate Governance, Companies Law and the Listing Regulations for the corporate sector do not cover the Sustainable Development Goals (SDGs).
“It is too early to expand the scope to cover SDGs, as corporations are already fretting over complying with the current provisions of law,” said a person working in a corporate regulator’s office in Islamabad.
While big businesses worry over sustainable development goals and have an inner focus on sustainable business development, too few companies have directed their purpose, strategy and actions towards achieving some of the SDGs.
There are scarcely more than two dozen transnational companies listed on the country’s capital market — mostly in the pharmaceutical, food and fast moving consumer goods (FMCGs) sector. Two steps below are big local conglomerates.
Having to interact with the outside world, those among the 561 publicly traded companies have some sense of the SDGs. However, the corporate leaders of the overwhelming majority drew a blank when the word was mentioned.
It is hardly surprising that most local company bosses are unaware of Sustainable Development Goals replacing the Millennium Development Goals in 2015. The first generations of entrepreneurs (or seths in local parlance) still sit at the head of the table in boardrooms — barely looking beyond the bottom line.
Explaining to them the first five of the 17 SDGs — i.e. alleviating poverty, ending hunger, ensuring healthcare, equitable quality education and achieving gender equality — drew an outburst. Most of them focused on their own complaints regarding the unavailability of power, water and electricity to their industrial units.
Just as the government bigwigs avoid embracing the SDGs on the ground that progress in social sectors is interlinked with economic growth, most corporate bosses of small and medium sized companies pull their pockets inside out.
“There is precious little left after all expenses are paid,” said an entrepreneur of a textile mill and swore that he was running the business at a loss for the last five years. “I keep the wheels of my mills turning lest the poor employees lose their jobs,” he said, believing that all the people can be fooled all of the time.
However, a number of them were upfront. A managing director of a local textile mill, with all other directors as family members, minced no words in cursing the government for its failure to shoulder the responsibility.
“I owe my responsibility to my employees and the shareholders of my company,” he asserted. “The government takes its pound of my flesh under 32 different heads of taxation.”
Having to interact with the outside world, those among the 561 publicly traded companies have some sense of the SDGs. The corporate leaders of the overwhelming majority drew a blank when the words were mentioned
The owner of a medium sized local pharma firm said, “Is it not then the government’s job to provide education, health cover, clean drinking water and alleviate poverty? We are doing our part, adequately looking after the welfare of our workers and families by providing reasonable wages and salaries, free education to their wards and free healthcare benefits.”
Regarding the goal to achieve gender equality and empower all women and girls, the burly managing director of the company assured that his firm was an “equal opportunity employer” and there was no discrimination on the basis of gender.
There are rare examples among big conglomerates in the private sector which are known to fund charitable organisations and even sponsor their own trusts that reach out to the poor, less in the urban and more in rural areas. They set up schools, dispensaries, old homes and orphanages.
The situation is a little brighter among multinational companies. A senior executive at one such firm said: “Big companies that have worldwide exposure and who are required to submit reports to their overseas head offices do allocate funds for those goals: the alleviation of extreme poverty, promotion of primary education, child mortality and maternal health.” The figures could be traced in the annual accounts of those companies, he said.
Subsidiaries of multinational companies that operate in the country have to demonstrate corporate social investment, corporate social responsibility and corporate citizenship. Under the reporting requirements in annual reports, companies explain their position under various heads, such as mission statement, vision, nurturing values and statement of compliance with code of corporate governance.
Engro Corporation, a major conglomerate, stated in its 2016 annual report: “We believe that a successful business creates much bigger economic impact and value in the community, which dwarfs any philanthropic contribution. Hence, at Engro, sustainable business development is to be anchored in commitment to engage with key stakeholders in the community and society.” Unilever Pakistan, one of the biggest companies operating in the country, stated in its annual report: “The Unilever Sustainable Living Plan, launched in 2010, laid the blueprint for achieving this strategy. We continue to work towards the ambitious targets we have set ourselves for halving our environmental impact, improving the health and well-being of one billion people, and enhancing the livelihoods of millions.”
Published in Dawn, The Business and Finance Weekly, September 25th, 2017