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Mixing goodwill with good business
The social obligations of the business community also can lead to extra profits
By GEORGIANNE OCASIO TEISSONNIERE of Caribbean Business
August 25, 2005
The picture of the stereotypical corporate executive handing over a large cardboard check to companys charity of choice has become an industry cliché. While the recipients of the check may make good use of the funds, the companies can make good use of the public relations. Usually, that is as far as it goes. A new chorus of awareness, however, is arising among local business executives, calling for more creativity and action when it comes to corporate social responsibility (CSR).
Perfect examples of this are Carlos Jacks, president of cement company Cemex, and Raúl Costillas, president of insurance company Mapfre. Both executives are firm believers that aligning business strategies with social responsibility projects is a win-win situation for all parties involved.
"Philanthropy and CSR are two completely different things. Philanthropy is helping through donations with a cause that isnt necessarily related to the business, and CSR involves articulating a project that also can generate business for the company," explained Jacks. "Corporations have a debt to society; we should be in tune with their needs. Donations are necessary, but they shouldnt be a justification or substitution for CSR, which should go far beyond that," Costillas stated, explaining that in Puerto Rico CSR has always been seen in a more passive light, without dedicating enough investigation and creativity to develop truly productive projects.
Costillas offered an example of a CSR project that Mapfre is currently working on in Puerto Rico, which is called Seguridad Via, or Roadway Security. The purpose of the project is to decrease the impact of roadway accidents, which last year left a total 500 deaths in Puerto Rico. The project involves school education materials, publications, conferences, as well as creating awareness in companies about securing transport and company vehicles and monitoring highway and road conditions.
This project, which potentially could have an immensely positive effect on society, also is a good business move. "For us as insurers, if we manage to decrease the number of accidents on the roads, that not only is a social good but, in the end, we also will benefit, as will hospitals, and many other related costs can be saved as well. Besides, if we can save a life, every dollar invested is well worth it," explained Costillas.
Jacks, who is Mexican and has only been in Puerto Rico for about seven months, was able to offer examples of several CSR projects Cemex has developed in Latin America. Construmex, a project that was developed for Mexico, had to do with the remittances that immigrants in the U.S. were sending to their loved ones in Mexico.
After analyzing the reasons the immigrants had for sending the money, Cemex concluded a vast majority was intended to assist with housing improvements such as adding an extra room or repairing something in the house. Cemex also realized much of the money frequently was being diverted and used for other purposes.
Cemex proceeded to open offices in strategic places in the U.S. that had large Mexican communities. Immigrants could go to the office, explain the project that needed to done, and the company would help them calculate the construction materials that would be needed. The immigrants would then provide the money that was going to be sent back to Mexico, and Cemex would deliver the construction materials to the intended location, in the process selling more of its product.
Another project, called Concretemos nuestra cuadra (Lets Fix our Block), involved the formation of an alliance among community members, government officials, and Cemex, in an effort to improve the conditions of the streets and sidewalks of a given community. While the community members would help raise money for the project and collaborate with labor, the government would provide the rest of the needed funds and Cemex would provide the necessary materials, again, making a profit.
"I think when a company assumes an act of social responsibility, they should make sure it is of high impact, can provide long-term benefits, and involves community participation," said Jacks. "It isnt just about helping for the sake of helping. I think companies many times make the mistake of assuming what society needs, or they are extremely passive and simply contribute to the causes that come and knock on their door, which I consider a grave mistake," he added. Cemex currently is in the process of researching and developing a social responsibility project for Puerto Rico, which potentially could have to do with housing needs.
Both Jacks and Costillas agree that developing these kinds of projects isnt an easy task. The process, according to the executives, requires a firm commitment from top management, the involvement of company employees, planning, research, technical analysis, and a lot of creativity and imagination.
CSR projects also go beyond community efforts. The initiatives can involve environmental practices, creating a positive working environment, client services, governance and transparency policies, government partnerships, the selection of CSR-compliant suppliers, and internal company values. Anything that can contribute to improving social conditions, also can contribute to better business.
International awareness about CSR has rapidly developed in recent years. Britain, for example, has a CSR minister. The United Nations created a Global Compact, and the European Union created a Green Book, both of which ensure worldwide CSR practices.
With the purpose of creating more local awareness about the importance of CSR and supporting these kinds of initiatives in Puerto Rico, Conectarse, a nonprofit organization, will be hosting the second-annual CSR Forum. The event will be held Aug. 31 at Wyndham El San Juan Hotel & Casino in Isla Verde and will have the participation of international figures recognized for their expertise in corporate and social alliance strategies.
Topics to be covered during the forum are the art of connecting; dialogue with interest groups as a tool for crisis management and confidence building; examples of companies that have integrated CSR to reach new markets; how to establish successful and lasting bonds; and the role of top management in CSR.
Referring to the current political and economic situation in Puerto Rico, Costillas and Jacks agreed it is more important than ever to promote CSR initiatives on the island. "We are an essential part of the situation in which we are living. Through CSR, companies can collaborate with the government to make things happen. Corporations dont stop working on account of politics. It is truly the ideal moment for large and small companies to contribute. There are a lot of companies in Puerto Rico, and no matter how small the contribution, it can make a difference," Costillas expressed.
"Private corporations, which are composed of many members of the community, have the obligation of participating and supporting the government in finding solutions. That is where the private sector needs to be more active," said Jacks. "Can it be good for business? Of course, there is nothing wrong with that. After all, at the end of the day, we are businesses."
This Caribbean Business article appears courtesy of Casiano Communications.