Bell Pottinger's David Logan on the evolution of CSR in Asia

How has CSR and sustainability evolved over the last 30 years and which are the most significant events in your personal experience?

I began working in CSR in 1980 for Levi Strauss & Co so have lived through the changes of the last 30 years and they are very significant. From the end of the Falklands war to the early 1980s, the dominant force in world culture was the state, we did not really address the issue of corporate responsibility since most societies in the world where committed to state control of enterprises and to be owned by government meant that an enterprise was by definition good. 

It was the Regan/ Thatcher revolution that started to roll backstage influence and put private enterprise back at the centre of economic life and as a result of private firms getting more freedom (BA, British Gas, British Steel, British Air and even the bus companies where privatised in the UK), it meant they had to have a general theory of relating to society which went beyond keeping the law.

Corporate responsibility went from traditional philanthropy to understanding the total impact of the business on society and being responsible for it. The rise of NGO's also drove this trend and is expanded from being accountable for how a company managed its business and treated its employees to understanding the impact of the global supply chains and markets. It went from social and economic issues to include environmental ones as the large data sets about the negative impact of CFCs, GHGs and pesticides became increasingly available. 

Today it is about the triple bottom line accounting for a company's global footprint.

How has CSR evolved in Asia over the last decade, and do you think this is an area that is taken seriously?

Asia has a lost history of CSR going back to the days of JDR Tata in India, Cheong Faty Tze in China and Southeast Asia and the employment practices of the early Japanese companies.  Not all capitalist firms were cut throat exploiters.

However in Asia, the early promise of the Japanese experience did not see fruit as the economy stalled and the Chinese and Indian economies where still very state dominated. As they are increasingly led by vigorous private firms, they will rapidly catch up with the experience of Western firms. They in turn have realised they cannot just outsource cheap and dirty production to China and not be involved in helping to find solutions for labour problems and the impact business has on the environment. 

As Asian and Western economies integrate even further, there will be an increase in the exchange of  experience between private firms on how to address the great issues of the day because government cannot provide all the solutions and solutions are necessary for business to continue growing. Asian firms are slower to embrace aspects of CSR than European and US companies, like sustainability reporting, but that is changing quickly now as the presence of private enterprise in Asia grows rapidly.

What are the costs of not taking CSR and sustainability seriously when a company is engaged in emerging markets?

For Western multinationals they are real as the recent campaign by Greenpeace on palm oil. Nike and others have also been seriously effected by adverse publicity about their supply chains. 

In addition, if Western firms want to rapidly grow markets in Asia they need to be engaged with issues like recycling consumer packaging. It just does not happen well in the West and it is seriously underdeveloped in Asia. The 'bottom of the pyramid' is a nice theory but it raises huge problems of resource use as the ratio of packaging to product is really bad in the case of small sachets and there is about to be an explosion of them. 

For Asian companies wanting to develop in Western markets they need to be able to show that they are responsible and sustainable. Western consumers now take it for granted that companies will manage all those labour and environmental issues that have shown up in Western company supply chains and won't want to see them repeated in the business profile of Asian companies. In addition, any Asian company wanting to do business with a Western company will need to meet the economic and social standards they now see as normal for Western markets.

When is a good time for a company, especially in Asia, to start a CSR strategy if none has been in place before? What are the first steps to take?

We are now in a world where private firms must think from day one about their relationship with the world around them and the environment. Even small start up firms have to take these issues into account, there is no period of grace while the company gets its business organised - it is expected from day one. 

Former state owned businesses in particular need to get their act together just has they had to in Britain. They have to see that life in the private sector means taking responsibility for all aspects of what you do and not leaning on the state for credibility. Not least because government is failing in many important aspects of good social governance such as enforcing labour laws and introducing effective recycling - companies will need to fill this gap themselves. 

Not just as individual concerns but as part of coalitions with other companies and NGOs, the world's big issues will not be solved by governments alone and after governments, private firms are the largest and most effective institutions on the planet.

 

Logan has worked extensively on corporate social responsibility issues in Europe, the USA and more than 30 emerging markets across Africa, Asia and Latin America. He has consulted for diverse global companies such as Unilever, Diageo and Vodafone as well as Cadbury Schweppes and Unilever.