Generally, community development is seen as a philanthropic activity that is separate from business. The concept of Corporate Social Responsibility (CSR) is much more than corporate philanthropy. It is about giving back to the society for its support to the businesses. The World Business Council for Sustainable Development has defined CSR as “a commitment of businesses to contribute to sustainable economic development by working with employees, their families, the local community and society at large to improve their lives in ways that are good for business and for development”.

Historically, in the charity or philanthropic pursuits, practices like helping the poor for food, giving scholarships to workers' children; 'umrah/Hajj' tickets to employees exist in several organisations for many years. But establishing new schools, hospitals or income generation projects for communities and an organised commitment to community development is not very common.

Anecdotal evidence suggests that Pakistan is moving ahead from few scattered examples of CSR to establish organised codes for CSR practices. At a recent multi-stakeholders forum “A Pakistan compliance initiative” was launched. The stakeholders included ministry of commerce, textile sector and foreign buyers. A new national standard was developed, incorporating international, social and environment compliance indicators and buyers code of conduct. The step shows the penetration of the CSR concepts in the government policy framework. Though the ministries related to industries, trade and commerce are formulating business and trade policies to meet the challenges posed by the WTO, a well articulated CSR policy with clear cut guidelines to the stakeholders has not been outlined so far.

Sometime back, efforts were underway to make manufacturers spend 10 per cent of their annual profit on the community development in the area where they operate. But nothing concrete has come out as yet.

To make CSR policy a success, business needs to be aware of the benefits of CSR and the policy should be reinforced through legislation. The business community should recognise that a prosperous community provides healthy and competitive environment. People having the higher purchasing power will have propensity to high consumption.

A responsible business can help these companies build trust with local stakeholders. Progressive labour relations have also been shown to have enhanced productivity and reduce costs associated with recruitment and turnover. A commitment to CSR policies can help market development, attract investors from abroad, access capital from national and international sources, and reach local and international buyers with their products and services.

A national CSR policy, focused on community development-- health; education; and income generation activities--- targeting socially excluded groups, would ensure that the stakeholders impacted by investments are empowered to participate in and benefit from the business activities in their area. For the purpose, each liable industry can make a plan by itself or in collaboration with NGOs for stakeholder mapping and needs assessments; stakeholder capacity building; local community development planning; income generation.

By implementing such a policy, a three-fold purpose can be achieved the community development can take place in the remote areas, where the government's development facilities are minimal; imbalances in the development can be mitigated for a business-friendly environment to emerge at macro level. At the macro level in general, and at the micro level in particular, the business community will be the ultimate beneficiary of practicing a robust CSR policy.

The obvious benefits of the CSR policy for the business communities are increased sales and market share; strengthened brand positioning; improved corporate image; increased ability to attract, motivate and retain employees; and a strong appeal to investors.

To quote John Wesley, the great preacher of the CSR “Gain all you can, but not at the expense of your conscience, not at the expense of your neighbour's wealth, not at the expense of our neighbour's health”

The writer is an associate professor at SZABIST, Karachi