Newsbreak Survey: Yes, SMEs do CSR

Programs vary—from straight charity to strategic giving

By Purple S. Romero

Does size matter in the practice of corporate social responsibility or CSR?

Newsbreak tried to find out by conducting a survey on CSR practice among companies with two to 600-plus employees and with revenues starting from P150,000 to P60 million*. This study, done in partnership with the British Embassy, defines CSR broadly, from having good workplace conditions, prioritizing employee welfare, and implementing programs for external stakeholders, such as communities and investors. (see questionnaire here)

CSR is a practice often associated with large corporations, as shown in a separate Newsbreak survey conducted among companies with 24 to 32,000 employees and with revenues not lower than P60 million (see story here). These companies have established foundations and offices dedicated to CSR and designated people who work solely on CSR activities. These are lacking among the SMEs we surveyed.

Moreover, we found that 100 percent of those who answered our survey are not familiar with CSR. But when explained to them, we elicited responses which showed that they do practice CSR—in various forms.

‘CSR IS FAIR TRADE’

Newsbreak sent out 120 questionnaires from October 2007 to January 2008, and received only 36 responses, most of which we got by personally talking to the owners or representatives of the enterprises. Those who received the questionnaire through e-mail did not understand what CSR is all about. We therefore talked to some of the companies’ officers and only then did they say that they do not practice CSR because they are ‘just a small company.’

For the 36 who responded, Newsbreak discovered that the lack of familiarity is only on the term ‘CSR,’ for the companies do practice it without calling it CSR.

Forty-seven percent of the respondents said that their CSR focuses on conducting livelihood training for their community, particularly for the out-of-school youth, indigent families and tribes.

Another form of CSR is providing just compensation, safe and healthy working conditions, and eliminating child labor.

In the handicraft industry, assailed for its low wages, unsafe working conditions, and child labor, improvements in their labor and workplace management go by another name: fair trade.

“The CSR of small enterprises is fair trade, which means adopting the values of having equity in trade, capacity building, aiming for quality not charity, caring for the earth and consumer responsibility,” Vincent Euegnio, marketing officer of the Advocate of Philippine Fair Trade Inc. (APFTI) said. APFTI is a non-profit organization that trains and educates micro, cottage, small and medium enterprises in balancing profitability with social responsibility. “Small enterprises do not have the capacity to implement CSR in the same way that large companies could. But this does not excuse them from being socially responsible. Thus, APFTI helps them to be one by observing fair trade,” he explained.

All of the respondents in the handicraft industry are members of APFTI. Some of the improvements they have done are: observing the 18-year-old age requirement for labor, providing employees with protective gear, and ensuring that their employees, both in-house and subcontractors, get reasonable wages. In the handicraft industry, the compensation is piece-rate, but the respondents no longer give the usual 50 centavos-per piece-rate to their employees, with the lowest rate now at P10 per piece.

COMMUNITY-CENTERED

Seventy-eight percent of the respondents direct their CSR towards community development. But unlike large corporations which often choose far-flung communities as the recipients of their programs, smaller enterprises help their immediate community: their own neighborhood, barangay, or parish.

One good example is Halo Heavenly D’lites, which sells organic food and herbal products. Gross annual revenues are P150,000, but it has CSR programs in the education, environment and health categories. Halo Heavenly D’lites provides scholarships, donates books, promotes solid waste management and sponsors health and sports activities in their community in Cubao, Quezon City. “We have a small community. You can observe what kind of help is needed by the people,” Celeste Eden Rondario, Halo Heavenly D’lites marketing officer, said.

Domingo Malsi, owner of the Aquarevo drinking water center in Pacita, San Pedro, Laguna, constructed a well in Bayan-bayanan, a squatters’ area near them without source of water. Malsi noticed that the water from the well could only be used for bathing and cleaning purposes. He then decided to form Aquarevo and sell potable drinking water to Bayan-bayanan at P25 per gram, a price lower than the usual P45-per gram cost peddled by other water delivery centers.