South Asia sluggish on CSR: ILO study

The ILO report noted that the MNEs give maximum priority to labour-oriented CSR initiatives that focus on non-discrimination in the workplace, followed by improvement of health and safety and the integration of social factors in the monitoring of the supply chain. Photo: Pradeep Gaur/Mint

New Delhi: There is a sharp discrepancy between the allocated or committed corporate social responsibility (CSR) funds and actual spending by multinational enterprises (MNEs) on labour and employment-oriented initiatives in South Asia, an International Labour Organisation (ILO) report has noted.

According to the report titled ‘World Employment and Social Outlook 2017 – Sustainable Enterprises and Jobs,’ released on 9 October, the level of commitment and implementation to CSR is the highest in Western Europe. East Asia and Arab states are at the bottom.

South Asian states show relatively better CSR commitment than Central/Western Asia, Eastern Europe and North America regions, but fare poorly compared to African states.

The ILO report noted that the MNEs give maximum priority to labour-oriented CSR initiatives that focus on non-discrimination in the workplace, followed by improvement of health and safety and the integration of social factors in the monitoring of the supply chain.

“Private commitment (and implementation) regarding freedom of association is globally very low, meaning that very few companies worldwide see this issue as a priority of self-regulation,” it said.

The study, which did not name any organisations, added that the top scorers in terms of freedom of association also have better commitment scores than average on other parameters such as human rights, environment and corporate governance

The study is based on multiple and complex dimensions of CSRs recorded in a database compiled by VigeoEiris, a European CSR rating agency, which covered more than 3,000 MNEs and measured the levels of voluntary commitment and means of implementation on parameters including non-discrimination, health and safety, freedom of association and social criteria in the supply chain.

“The levels of commitment and implementation towards CSR are relatively high in Western Europe as compared to East Asia, Arab States and South Asian States because the European society is more powerful and demanding as compared to the latter,” said Abhishek Tripathi, director (responsible business advisory), PwC India.

He added that the needs of the community drove the CSR activities of MNEs in the West.

In terms of sectors, the ILO said financial and information technology services companies are “reluctant” to commit to freedom of association, while companies in the luxury goods and cosmetics, electric components and equipment and beverage sectors are more committed, “possibly because of the critical importance of brand reputation for these types of products.”