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Published Date: Oct 30, 2014

Corporate Conscience CSR in Pakistan

Executive Summary

The purpose of the study is to contextualize Corporate Social
Responsibility in Pakistan. Corporate Social Responsibility is an emerging concept in Pakistan. The potential for CSR in a developing country automatically calls for a greater role of large businesses in addressing the issues faced by the societies they operate in. The trend for CSR related activities is increasing, both in terms of more companies developing CSR policies and investing in increasing percentages of gross sales to community service and sustainable development.

The leaders in this trend are a few big multinational companies that are importing their CSR practices from the developed countries into the developing countries, thereby promoting a culture of consumer awareness and pride in community service, and the main motivation behind this is to keep elevated their socially responsible status in Pakistan. This overall concept however, is still far from maturity in Pakistan. The approach to it is still relatively primitive, while the fogged distinction between Philanthropy and CSR is evident in the
choice of CSR initiatives by businesses in Pakistan.

The concept of creating shared value by inculcating CSR into value chain dynamics requires major changes in organizational cultures and value chain arrangements, and this is far from being fully understood or fully applied in businesses, as most of the companies aware of CSR resort to simple CSR or philanthropy instead of complex CSR modeling and its implementations. Furthermore, the presence of laws and effective codes in dictating certain sustainable practices is lacking, resulting in the main drivers behind CSR being only voluntary actions designed to enhance company image. In addition, stakeholder activism is lacking, both on the consumer and supply ends, hence the only push factor behind CSR is the company itself.

This study took dairy product industry as its sample for study in explaining the value chain analysis. The sample was selected because dairy industry is an agro based industry and forms major part of economy and Pakistan stands among a few big milk-producing countries. This industry’s area of work is also spread across villages and on the hand to the cities where its consumers live. Furthermore, dairy product supply chain could be easily traced through all of its steps and procedures and hence effects of CSR could be elaborated.

From the starting point, the farmer, to the final point, the individual consumer, the three main parts of supply side, demand side and operational aspect were evaluated on the terms of voluntary and code enforced CSR. The problems and effects of internalization costs in each of these categories and CSR oriented value chain analysis was compared to the costs
of ordinary business operations.

Finally, the study has suggested that in order to achieve a healthier and integrated state of CSR, stakeholders’ activism was an essential prerequisite. On the demand side, consumers need to be educated with regards to product integrity and sustainable practices. Civil society should form pressure groups that can force businesses to abide by laws and regulations set forth by government. The construction of a uniform code nationwide, and its effective implementation can result in major value creation by the businesses towards their supply sides.