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Corporate Social Responsibility (CSR) and Sustainability

Corporate Social Responsibility Legislation On The Way

A new "revolutionary" bill is on the way. One senator has come up with a bill that will compel every company in Nigeria to devote 3.5 per cent of its gross profit to what he terms "corporate social responsibility". - Osebumere Odia

Ok, I’m not sure this is a good idea.

A new "revolutionary" bill is on the way. One senator has come up with a bill that will compel every company in Nigeria to devote 3.5 per cent of its gross profit to what he terms "corporate social responsibility".

In other words, after carrying out their business and paying all the taxes that are required of them, companies will also be required by law to build roads, provide electricity, build secondary schools and execute all other such activities under a legally binding scheme.
- Osebumere Odia,

Read the full article here.

Don’t get me wrong, I believe the quickest and most efficient path towards building strong societal infrastructure will come through the coordinated efforts of government, non profits and business. Corporate Social Responsibility is a great mechanism to achieve thi.... But when government legislates financial commitments rather than inviting them through incentives, then we are probably headed towards some type of backlash.

What do you think? Are there some situations in developing countries where this show of force by governments is justified? Especially considering that many multi-national companies have little to no interest in developing these nations beyond what is necessary to achieve business goals? For example, Nigeria is the 6th largest oil producing company on the planet, yet 92% of the population of 140 million live on less than $2 per day. Sure there are many reasons for this, but such extreme situations may demand extreme solutions.

What about the implications for developed nations? We already have numerous laws to protect our citizens and improve our communities. Is this the inevitable raising of the bar for business to act as good citizens?

I'd love to hear your thoughts.

Views: 95

Comment by Charles Ruys on February 11, 2009 at 12:56pm
Although the article gives an challenging idea, it fails to define what CSR is. I am sure that CSR is something in its own context in its own society at a certain moment. For example in the fifties companies who were building higher polution pipes better than other ones. If we mean just social and not corporate social the issue becomes more defined and clear, but again if investments have to be made; what is social and what not is a question with a time and a place to it. I doubt whether this is going to work! I hope it starts many people to think about these issues.
Comment by Gary Eyring on February 11, 2009 at 6:32pm
All that each of us is doing is "Living, Learning, and passing it on". If social/corporate/national/personal responsibility to to create sustainable profits, people, and the planet, then anything that helps in that effort is "good", and anything that takes away from that cause is "bad". The "invisible hand" of capitalism always works, but the costs in terms of suffering and volatility is, in my mind, unacceptable. Perhaps better measures of "happiness" might create organizations that are more responsible, and that reduce the pain and suffering of all of us.
Comment by Shaun Gilchrist on February 11, 2009 at 6:58pm
Well guess we better be careful (unfortunately) of a 'CSR Tax' that may just end up being filtered off to other channels? I agree that incentivising has to be the way to go.... maybe tax breaks for completing effective CSR projects? Either way its a thought provoking idea...
Comment by James Jennings on February 24, 2009 at 11:14pm
It seems to me that regardless of what it is called, a law taxing businesses to fund CSR, CSR would become "Compliant Social Responsibility." Compliance is the lowest threshold of participation. If a government wanted to encourage businesses to embrace CSR, setting up positive incentives would be a more effective approach. Instead of a tax, it could offer CSR matching to businesses like employers matching 401K contributions of employees. That would increase the reach of the companies who are socially responsible and provide an incentive for those who currently do not to consider it. That would more CSR to the other end of the spectrum from compliance to Collaborative Social Responsibility.


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