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Private Sector Fighting Poverty
When it comes to global poverty, the solution should involve collective effort from different organizations and individuals as well. These involve various participants from volunteers and nonprofit organizations to the government or even celebrities who are contributing their time to raise public awareness and much more. In fact, even private sector fighting poverty via Corporate Social Responsibility (CSR) is crucial too.

Corporate Social Responsibility (CSR)

Many large businesses and corporations are doing their bit for the world. Examples of private sector fighting poverty are not only motivational but also help to eliminate the sources of and causes leading to global poverty. Each year, different companies take action to do what is necessary for their community. The concept was introduced in the 1800s when the U.S. Supreme Court stated that corporations are people and they should be good citizens.

There are several ways for companies to practice Corporate Social Responsibility. Environmental efforts, volunteering, ethical labor practices and philanthropy are some of the examples. The private sector fighting poverty is reflected in many of the world’s biggest and most profitable businesses. CSR has become so critical that, for example, in the U.S., more than 60 percent of citizens hope that business will drive social and environmental changes in the absence of government actions and regulations.

Private Sector Fighting Poverty

Print giant, Xerox, has been focusing on different social areas with many projects, but it’s most recognizable one is the Xerox Community Involvement Program. Through this program, Xerox encourages its employees to work on social projects of their choice. They can also get a paid leave of absence to focus on their respective projects.

Another company that has been running several projects for the social good is the shoe company, Toms. Their well-known project One for One Campaign came into existence after the company’s founder, Blake Mycoskie, witnessed the difficult life of Argentinian children who grow up without wearing shoes. The idea of the project is really simple: Toms provides shoes to the children in need in 60 countries as it donates one pair of shoes for every pair of shoes sold.

Microsoft is another company taking responsibility for social issues. According to Forbes, the company holds the second highest rating on CSR score for all their educational and environmental contributions worldwide. It’s also known that the company’s co-founder and former CEO, Bill Gates, started the Bill & Melinda Gates Foundation to combat infectious diseases, promote equality, empower the poor and much more.

How CSR Benefits the Private Sector

Numerous big giants such as the BMW Group, Google, Samsung, LEGO Group, The Walt Disney Company, etc., have been taking action. Many of these companies benefit from their CSR as well. For example, Google Green is a social effort geared toward using resources effectively and increasing the use of renewable power. Ever since this cultural change occurred, Google’s data centers’ power requirements have reduced by about 50 percent. This means that what is saved by a social project can now be used for other operations.

Fighting global poverty and its causes needs to be a collective effort and the involvement of the private sector is highly crucial.

– Orçun Doğmazer

Photo: Flickr

What Role Can the Private Sector Play in Poverty Alleviation?
The private sector constitutes a large portion of wealth and job creation in most countries, rendering it a powerful social tool that can be used to alleviate poverty and promote the wellbeing of the general public. Unfortunately, historically, this tool has been used to promote the interests of private actors.

The interests of private actors and the interests of the public have often come in contradiction, particularly as the world has globalized. However, the alignment of public and private interests is possible when you consider that those living in extreme poverty represent a largely untapped and mismanaged resource for a lot of private actors. When determining what role the private sector can play in poverty alleviation, it must be understood that poor corporate labor practices have contributed greatly to global poverty and proper practices have the ability to reverse it.

Corporate Social Responsibility

Those living in poverty, particularly extreme poverty, are often surrounded by economic deprivation, including unemployment, low wages and a lack of investment from private actors. Corporate social responsibility is one of the many avenues that can be taken to bring the structures and goals of the private sector in line with the needs of the public.

Corporate social responsibility (CSR) is a business model of private accountability to the public, meaning that businesses and corporations incorporate practices that create positive social impacts domestically and throughout the world. CSR is a broad concept, allowing it to manifest itself in several different ways. There is certainly room for error in the implementation of CSR practices, but when carried out effectively, CSR can serve as a sharp tool for alleviating poverty while also increasing a corporation’s bottom line.

Patagonia: A Model for Effective Corporate Social Responsibility

The apparel industry is one of the most competitive in the private sector. With that competition, there has historically been a “race to the bottom.” Organizations have looked to manufacture in places with the most lenient regulations on worker rights, wages and environmental waste. These places, non-coincidentally, tend to be the most impoverished. However, this has not been the case within Patagonia.

Patagonia has been integrating CSR into its business model since its conception in 1973. The corporation operates in several nations around the world, with portions of its manufacturing happening in Sri Lanka, Mexico, Thailand and more. The company has prioritized its Fair Trade Certifications, paying a premium on top of the costs that they already incur. This money goes straight into the hands of factory workers who get to vote on its use. This not only ensures that Patagonia’s workers are well compensated but also that the most pressing needs of the community are met.

At the Hirdaramani Mihilia CKT Factory, workers decided to spend their premium on a daycare. For many women in the factory, employment would not be possible without it. The piece of mind workers get from knowing that their kids are not only safe but progressing in their development, allows for more diligent and quality work in the factory.

What Role Can the Private Sector Play in Poverty Alleviation?

Fair Trade USA CEO, Paul Rice, stated that the organization has to “prove that fair trade is good for business.” Patagonia is one of its partner companies that is doing just that for them. Patagonia has more Fair Trade Certified styles than any other apparel brand, and it is expanding every year. In 2017, 30 percent of its product was fair trade certified, indicating that there is plenty of room for further expansion, but also that expanding the scale of CSR practices can be sustainable for business as well—even when its competitors do not engage in the same practices.

Consumer awareness of the Fair Trade Certified seal has almost doubled to 63 percent since 2008. As the world has globalized and the reality of billions of people living on less than two dollars a day has become common knowledge, consumers have begun to pay greater attention to how their goods are made. Corporate responsibility is becoming the standard, and as consumers, governments and most importantly corporations themselves continue to promote and enforce that standard, the number of exploited and impoverished workers will fall.

Today, transparency and responsibility translate into dollars. More consumers are willing to pay for goods that they know were made ethically, employee turnover is lowest at corporations that integrate CSR and workers in developing countries perform better when their wages and standard of living are adequate. More than 1,250 corporations have recognized this to be true and that number is sure to increase in the coming years. So what role can the private sector play in poverty alleviation? The answer is, quite simply, a large one and one that can also benefit their business as well as the public.

Julius Long
Photo: Flickr

Social Responsibility definition
The concept of social responsibility has received increasing emphasis in business practice over recent years. It is a phrase commonly invoked, but just what is the definition of social responsibility?

At its core, being socially responsible means acknowledging accountability for the impact of one’s choices on the larger world. Businesses, in particular, are expected to make the welfare of society a priority when they make decisions, rather than focus exclusively on profit margins. This pertains not only to how companies spend money, but also to the ways in which they earn it.

Examples of socially responsible actions companies can take include:

  • Espousing fair labor practices
  • Incorporating ethical standards into contracts
  • Implementing environmentally sustainable practices
  • Matching employees’ donations to non-profit organizations

Definition of Social Responsibility

The definition of social responsibility, as the term is most commonly used, almost always pertains to business. Use of the phrase “corporate social responsibility” is so prevalent in recent years that it is frequently abbreviated to “CSR.” Even when social responsibility is mentioned on its own, a corporate element is often implied. According to a 2011 study by the MIT Sloan Management Review, sustainability has become a permanent component of 70 percent of business agendas. However, the concept of social responsibility need not be alienated from the individual.

The basic tenet of the idea is that those with the ability to affect change have an imperative to use it. For instance, in 2010, billionaires Bill and Melinda Gates and Warren Buffet solicited 40 of the wealthiest Americans for donations to the Giving Pledge campaign, accruing a total of approximately $125 billion. As of September 2013, the list of pledgers has grown to 114. While this is an application of social responsibility on a grand scale, the principle remains the same–individuals recognized their ability to contribute positively to society and seized the opportunity.

The average person may not be considered powerful in the way that Buffet and the Gates are, but every individual does have the power to contribute. Socially responsible actions that ordinary people can take include:

  • Volunteering
  • Supporting socially responsible companies through informed spending
  • Conserving energy by carpooling or turning off unnecessary houselights
  • Contacting their political leaders in favor of legislation they support

While these contributions may seem minor, they are integral. From the standpoint of social responsibility, every individual plays a role in global events and has an obligation to use whatever influence he or she has.

– Emma Burbage

Sources: The British Assessment Bureau, The Christian Science Monitor, The Giving pledge, Harvard
Kennedy School

Photo: Photobucket


It’s no secret that Americans love to go out to eat. Choosing take out or driving to the nearest food drive always sounds better than working in the kitchen for what seems like hours. Luckily, for those times that a good burger or pizza sounds too delicious to pass up, there are still opportunities to help the world’s poor as restaurants adopt new policies of corporate social responsibility.

Restaurants everywhere are catching on to the notion that they can adopt a policy of corporate social responsibility and use their position in society to help people who are in need. According to an article in AdWeek, Millennials are civic-minded and have more recently demanded that companies and corporations be civic-minded as well by giving back to society. Millennials want to create change, take responsibility for the world and help those who are unable to help themselves.

The 2015 Cone Communications Millennial CSR (corporate social responsibility) Study found that 9 in 10 millennials would drop one brand and replace it with a more socially conscious one. Furthermore, 62 percent of millennials would willingly take a pay cut if it meant working for a socially responsible company. Millennials are dedicated to staying socially responsible in all areas of their lives.

Many people know of clothing brands and large corporations that are donating sums of money or have a one-for-one philanthropic model with clothes, shelter and other essential items. In a similar way, there are now many restaurants that are donating food to hungry people all over the world.

Some major brands, including Panera Bread, Chipotle Mexican Grill, Yum Brand restaurants and Zambrero donate to charitable causes specific to eradicating hunger worldwide. Some restaurants name the charities they are working with right in their mission statement. For example, Malawi’s Pizza serves “pizza with a purpose,” has a Meal for Meal Exchange program and has sent 923,859 meals to orphans in Malawi since its inception.

These are only a few options. The good news is there are many more corporations that care about good causes. Staying educated on corporate social responsibility is the most efficient way to be up-to-date with which corporations are making a difference because those are the ones that should maintain support. The more demanding consumers are of socially responsible corporations, the more they will appear and, as a result, Americans can begin taking more responsibility for those in need everywhere.

Emily Arnold

Photo: Flickr

Corporate Social ResponsibilityCommunity Capital Management, Inc. (CCM) is one of the top fixed income impact investing managers in the United States that prides itself on corporate social responsibility.

CCM reported that the company’s CRA Qualified Investment Fund Institutional Shares (CRANX) ranked among the top one percent of all performers out of 309 government funds during 2015.

According to PR Newswire, CRANX saw about two percent returns in 2015, exceeding the average return for its category. Out of 301 funds, investment research group Morningstar rated the share class with four stars for its $1.8 billion asset portfolio across its three share classes.

“We are equally proud of the Fund’s bespoke impact portfolio and community impact performance, having invested $512 million in 2015 and $5.8 billion since inception in bonds financing economic and environmentally sustainable initiatives,” said CCM chief investment strategist David Sand.

CCM offers shareholders the ability to customize their investments to align with social or environmental missions, in addition to participating in open-ended bond funds that provide liquidity as a part of their corporate social responsibility.

Funds like CRANX offer investors the chance to facilitate change through impact investing – making investments that bring about a social or environmental change as well as a financial return.

CCM’s impact investments have brought great change to areas within the United States. For example, $283 million helped to fund job creation and small business development, $354 million was invested for environmental sustainability and neighborhood revitalization, $33 million helped to create affordable health facilities and 320,000 affordable rental housing units were created.

Canyon Crossing is one of these complexes that offers 180 rental properties to low-income residents of Salt Lake County in Utah. The construction of these buildings, along with the state’s other efforts over the last 10 years, has resulted in a rapid reduction of homelessness throughout the state, according to the Department of Workforce Services (DWS).

According to the African Development Report of 2011, the private investment sector is the driving force behind economic growth and poverty reduction in Africa. The report finds that 80 percent of Africa’s production, two-thirds of total investments and 75 percent of total credit to the economy comes from private sector investments.

Barron’s reports that the popularity of impact investing has grown in the last 10 years and current trends indicate an increase in international impact investing. A survey conducted by Fidelity Investments found that a quarter of respondents plan to invest their impact portfolios overseas.

“Impact investing has the potential to channel significant amounts of private capital to solutions to the world’s most intransigent challenges. Last year was a banner year for impact investing and set the stage for 2016 to be a year of tremendous growth and progress,” said Global Impact Investing Network CEO, Amit Bouri.

Kelsey Lay

Sources: African Development Bank Group, Community Capital Management, Inc., Department of Workforce Services, Forbes 1, Forbes 2, PR Newswire
Photo: Huffington Post

Forbes
A new survey released by The Chronicle of Philanthropy ranks 12 companies in order of who gave away the highest percentage of profits in 2013. 70 U.S. companies participated in the survey. The top 12 most generous companies are listed below along with descriptions of their core values and donations.

1. Alcoa

Alcoa, a metals, engineering and manufacturing company, values innovative solutions that better the world. They donated 12.1 percent of their profits to worthy causes.

2. Safeway

Safeway, a grocery and food supply company, values quality food and integrity. They donated 7.2 percent of their profits to worthy causes.

3. UPS

UPS, a commerce and messaging company, values excellent service and dedication. They donated 5.6 percent of their profits to worthy causes.

4. Bank of America

Bank of America, a banking company, believes in the power of helping all people. They donated 5.4 percent of their products to worthy causes.

5. State Farm Insurance

State Farm Insurance, an insurance company, values being a Good Neighbor and helping those in need. They donated 4.1 percent of their profits to worthy causes.

6. Kroger

Kroger, a retail food company, believes in proving the best service, selection and value. They donated 3.3 percent of their profits to worthy causes.

7. MetLife

MetLife, an insurance, benefits and retirement company, values individuals and seeks to help the future of others. They donated 3.2 percent of their profits to worthy causes.

8. Target

Target, a retail company, values quality products to enable a successful life. They donated 3.2 percent of their profits to worthy causes.

9. Nationwide

Nationwide, an insurance company, values helping others. They donated 3.2 percent of their profits to worthy causes.

10. DOW Chemical

DOW Chemical, a chemical, biological and physical sciences company, is committed to innovations that help the world. They donated 2.4 percent of their profits to worthy causes.

11. Goldman Sachs Group

Goldman Sachs Group, a bank, securities and investment management company, believes in making a difference in someone’s life. They donated 2.3 percent of their profits to worthy causes.

12. Exelon

Exelon, an energy service company, values progress and knowledge that will help the world. They donated 2 percent of their profits to worthy causes.

Kelsey Parrotte

Sources: Alcoa, Bank of America, DOW, Exelon, Forbes 1, Forbes 2, Goldman Sachs, Kroger, MetLife, Nationwide, Safeway, State Farm,, Target, UPS
Photo: Flickr

end_world_hunger
The Hershey Company does more than produce delicious sweets. The company shares goodness with malnourished people all around the world in order to help end world hunger. To do this, their mission consists of a balance between having good business, fostering a better life for others and creating a bright future for those in need.

The company is dedicated to their mission. In the last three years, they increased cocoa farm yields around the world by 45 percent and improved cocoa farming knowledge in Ghana. In addition, Hershey has started Project Peanut Butter, which helps save the lives of starving children in Ghana. The company has also raised over 4 million dollars for Children’s Miracle Network, which helps treat sick and injured children.

The candy company constantly continues to touch the lives of others.

On July 16, 2015, Hershey partnered with Stop Hunger Now for their fourth event geared towards ending world hunger.

Stop Hunger Now is an organization that aids people who face starvation and disaster.

Todd Camp, director of Hershey’s Corporate Social Responsibility and Community Relations said, “We are excited to partner with Stop Hunger Now and have such an impact on the hungry around the world.”

More than 700 Hershey employees gathered and packaged 255,744 meals put together by Stop Hunger Now. The packaged meals contain rice, soy, vegetables and 23 essential minerals and vitamins. They will be sent to Stop Hunger Now partner organizations in Haiti, El Salvador, Liberia and Burundi.

“It’s not just about that we make candy, it’s not about the stockholders, it’s that we’re helping children every solitary day. To know we get to keep giving back… it’s a great feeling,” said Hershey volunteer, Denise Price.

Another Hershey volunteer, Scott Rownd said, “We just sat here for two hours and packed 2,000 meals to make a difference in maybe 10,000 people’s lives. It’s an amazing feeling.”

Hershey packaged 15,000 more meals this summer than last summer. With the commitment shown by the Hershey volunteers, next summer’s event is sure to be promising. Like many others, The Hershey Company hopes to contribute to the end of world hunger.

-Kelsey Parrotte

Sources: Stop Hunger Now, The Hershey Company, Virtual Strategy Magazine
Photo: Business Wire

corporate_social_responsibility
India is one of the fastest growing economies in the world. It is a member of the ‘BRIC’ countries (Brazil, Russia, India and China), which economists regard as quickly emerging potential economic powerhouses. Each BRIC country also struggles with internal poverty in some way or another, while India stands out among the rest. India is the only country that has a legally mandated corporate social responsibility (CSR) quota. The Indian government requires 2 percent of all corporate profits to be spent toward projects that benefit the poor.

Many Indian companies are beginning to follow a practice, coined by Bill Gates, called “creative capitalism.” That is to say that CSR need not be a corporate cash donation, but rather businesses can use their specialized skill sets and resources to produce a greater impact.

As of now, Indian companies are still trying to figure out the best way to spend on CSR and the government is attempting to direct those funds in the most effective way. One example is Indian tech company ZMQ Technologies. The software company applies the CSR mandate toward building programs and donating supplies to rural areas in India. This empowers the communities through information and learning, creating more skilled modern workers, and thus helping to boost economy.

CSR programs are not only helping the millions of impoverished Indians, but the country as a whole. Economist and business talk show host Punita Kumar-Sinha expects India to become the fastest growing economy, thus over taking China by 2017. She cites CSR as a major reason that India’s GDP could grow so quickly. “These CSR projects are already resulting in many innovative poverty alleviation schemes and would lead to more widespread growth than in the past,” she said. As time goes on and companies become larger and more specialized, their impact will grow too.

Joe Kitaj

Sources: Forbes, Business Insider
Photo: ahemahem

corporate_social_responsibility
As public sentiments focus more on the greater good, pressure on corporations to be responsible and giving citizens is increasing. Now, corporations practically need good corporate social responsibility (CSR) to generate positive press. More and more, companies are trying to integrate social or environmental concerns into their business plan. So far, companies while encouraged and pressured into investing in CSR, have not been forced to do so. India has recently become the first country to pass a law mandating companies to spend a prescribed amount on CSR.

India’s new Companies Act of 2013 requires public and private companies with a net worth of 83 million dollars or more, a net profit of 830,000 dollars or more, or a net turnover of 160 million dollars or more to contribute two percent of their average profits from three preceding years to CSR activities. This applies to all companies including foreign companies doing business in India. It is estimated that the law will apply to over 2,500 companies and generate 2 billion dollars of CSR spending.

One might think that this would be unequivocally a good thing, however it is highly controversial. This is partly due to the fact that the law also prescribes what activities count as CSR. This covers several public goals including eradicating extreme hunger and poverty, promoting education and gender equality, combating diseases or contributing to government programs. The ideology behind this could be positive in a number of ways. After all, the situation where companies spend on not clearly beneficial investments is undesirable. Furthermore, directing spending into concrete development goals will be more effective than diffuse investments.

However, some parties believe that this stipulation stifles social innovation and could lead to token philanthropy or corruption. Professor Aneel Karnani, of University of Michigan’s Ross School of Business, writing for the Stanford Social Innovation Review, roundly criticizes the law. He writes that the law goes against the voluntary nature of CSR, that mandatory CSR is basically an additional tax discouraging foreign investment, and that the stipulations and penalties for non-compliance are too vague.

As with any law, there will be loopholes for companies to slip through and opportunities for corruption. This does not mean it cannot have some impact. The CSR activities of major Indian companies are unique and broad, and with the new law more companies might be encouraged to join them. Tata Group, one of India’s largest conglomerates, spent more than Rs 660 crore (more than 100 million dollars) on CSR in 2014. India Times reports that in their view, meeting the two percent mandate will not be a problem.

ITC, another conglomerate, has received numerous accolades for their sustainability projects. The Nielson Corporate Image Monitor has marked ITC as the “Company most active in CSR” for three years in a row. ITC Hotels have been recognized as top in the world for sustainability at the Global Vision Awards by Travel and Leisure Magazine, U.S. The list of awards continues.

Using advertising for social reform is a new direction for CSR to evolve in. Tanishq Jewllers’ new advertisement incorporating the delicate social issue of re-marriage has gone viral. Havells, an electrical goods company, uses their advertising to teach respect for women. Employee Social Options, a program initiated by the Mahindra Group, has allowed for the donation of thousands of hours of collective employee time to projects related to education, health and environment. They also offer scholarships to the disadvantage and have set up five schools for vocational training. So far over 9,300 students have gained employable skills and all of them have been employed.

A lot has been achieved by CSR in India, yet the new law comes at a time when India is still grappling with several social and developmental issues. There are several opportunities to contribute and create. Now CSR is more than just philanthropy. The law might need to close some loopholes but this could be just what companies need to join the CSR movement.

– Mithila Rajagopal

Sources: The Guardian, India Times, ITC, Kordant Philanthropy Advisors, Lexology, Mahindra Group, Meta Corp, Stanford Social Innovation Review

Photo: EVYP

3BL_associates
Generations of business have been driven by one bottom line: profit. Cash at any cost, be it man or nature. Based in Bahrain, 3BL, or Triple Bottom Line, Associates has deemed this to be an unsustainable business model. 3BL advises for many to consider another business model that takes into account three bottom lines: people, place and profit.

3BL Associates refer to itself as “Bahrain’s first social impact and sustainability consultancy and think-do-tank.” It works with innovative companies that seek to grow harmoniously with the people within the MENA region. The idea of a triple bottom line was coined by academic John Elkington, who proposed “that business goals are inextricably linked to the societies and environment in which they operate, and that business practices utilized to achieve short-term economic gain but fail to consider social and environmental impacts are ultimately unsustainable.”

Established in 2010, 3BL now teaches these business principles to businesses large and small looking to “do well, do good.” They offer services such as sustainability audit and needs analysis, benchmarking and research as well as smart partnering. 3BL advocates for Corporate Social Responsibility.

Maintaining good CSR is growing a company while keeping in mind the social equity: Is it good for the people of the area or are you abusing the locals? Good CSR takes into account environmental sustainability: Does this company deplete the natural resources of the area or does it replenish them after use? This capitalization of sustainability is “an opportunity to generate social, environmental and economic prosperity, in tandem.”

3BL Associates took its business agenda to the next level when it published its own findings on Bahrain sustainability in a report entitled Bahrain Responsible Business Survey. In the survey the respondents were asked a variety of questions, in efforts to determine their perceptions of healthy CSR and what the role the government should be in keeping companies accountable.

It was found that 87 percent of respondents understood CSR to be “community engagement.” It was found that CSR tactics such as community engagement, employee wellness, transparency, corporate governance, health, gender equality and diversity were practiced already, but only in about one-third of the respondent’s organizations. The study also found that only 55 percent of respondents cared whether their organizations were working environmentally responsibly. Only 26 percent of the organizations in Bahrain currently meet these standards.

3BL Associates co-founder and managing director Leena Al Olaimy said, “CSR and sustainability have far more value than just “doing good,” and have the potential to simultaneously contribute to national socio-economic development, and to raise Bahrain’s rankings on a number of indices such as the Global Competitiveness Index.”

The report, compiled by Al Olaimy and her associates, also revealed popular sentiments when it found that 80 percent thought the government should regulate CSR practices. In addition, 95 percent felt there should be government incentives for those organizations implementing CSR, while 83 percent felt there should be some kind of government subsidy for the programs.

3BL Associates has only been in business for four years, but has already gained the trust of its people. Khamis Al Muqla, honorary chairman of 3BL Associates, further noted, “The intersection of social and environmental issues in business has become an international topic of concern for corporations and countries alike.”

– Frederick Wood II

Sources: 3BL, AME Info, CSR Middle East
Photo: Flickr