I wrote earlier about how doing good and doing well as an economic and social imperative is now more relevant these days, and that we all need to contribute for the sake of our children and the future generation. Having sustainability as part of the end in mind makes a big difference. A concrete example is the Social Enterprise business model, but I will expound on this subject matter in another time.
I’ll share my views on the upcoming CSR Expo 2023, an annual event organized by the League of Corporate Foundations (LCF), that aims to rally the industry to do good, while still doing well in business. This 4-day special event is scheduled on July 4-7, with the conference happening at the Makati Diamond Residences while the expo at the Palm Drive activity center of Glorietta Mall, both in Makati City.
The past couple of years were a low point for the majority and at the same time, an eye opener. It became clear that we all need to work together to create a more sustainable future.
Unfortunately, old challenges have not been fully addressed, and new ones continue to arise. The pandemic has intensified issues of climate change, food and financial insecurity, and more disaster-resilient communities―in short, the need to become more sustainable.
Today, two main terms are being associated to describe how businesses can show their commitment to sustainability: Corporate Social Responsibility (CSR) and Environmental, Social and Governance (ESG).
CSR and ESG are related but are different concepts. Both help address social, economic, environmental concerns and contribute to corporate sustainability. It’s a bit confusing, so I did some research to try to simplify and understand better the difference between the two.
What is CSR?
A common definition says that CSR is a management concept that aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethically-oriented practices.
CSR provides a platform for companies to deliver on their responsibility to do good by solving some prevalent societal issues. The goal is to ‘give back’ to their communities where they operate in and to reduce or compensate for the negative impact (if any) that their business might have on a particular community, their employees, or society as a whole. It’s a looser, general framework for responsible corporate behavior, hence the nature of CSR is more qualitative.
What is ESG?
ESG is a quantifiable assessment of sustainability and business practices. ESG strategy focuses on reaching certain performance metrics, setting measurable goals for them and conducting independent audits to verify that the metrics and related disclosures are accurate. There are explicit criteria surrounding ESG. For example, ratings agencies like Bloomberg, MSCI, S&P Global and Morningstar’s Sustainalytics subsidiary give companies ESG scores using different sets of performance criteria.
Investors use these scores to evaluate businesses, and most times provide their investment choices. Businesses create ESG reports to appeal to investors and other stakeholders and to meet regulatory compliance requirements.
For me, I think that CSR and ESG are complementary concepts that contribute significantly to the company’s overall sustainability efforts. A country like the Philippines, which struggles with corruption, widespread poverty, unequal distribution of wealth and opportunity, inferior infrastructure, and environmental degradation, etc.―all of which have worsened during the pandemic–badly needs both CSR and ESG efforts from the business sector.
Which makes this year’s CSR Expo theme, “From Extra to Essential,” extra relevant. It is a bold statement that is aligned with what we need as a nation, especially as we continue to recover from the worst global pandemic the past century. It is a rallying cry for the League of Corporate Foundations to lead and challenge the business sector to ensure not just compliance to regulatory policies, but also the full embodiment of the principles of good corporate citizenship–to lead by example and walk the talk.
I was told that global and local experts and leaders are scheduled to share their insights and strategies on how we can all contribute to building a better and more sustainable Philippines. That’s great news for all of us and I can’t wait to learn and participate in the CSR Expo 2023 this July!
Editor’s notes: Owen Cammayo is the Executive Director of BPI Foundation. Manila Standard’s Biodiversity 101 column is open to contributors who share the advocacies of protecting the environment and promoting sustainable practices that are being pushed by the United Nations. Such contributions are subject to the availability of space and the paper’s editorial policies. The contributions should not exceed 600 words or 4,000 characters.