Corporate Social Responsibility (CSR) is a relatively new business approach in Cambodia whereby private companies seeks to contribute to sustainable development by balancing Economic, Social, and Environmental (Triple-Bottom-Line Approach) considerations in their operations and decision-making. It is about a company taking responsibility for its impact on the community and the environment in which they operate, and working to create value for both the business and society.
CSR in Cambodia: connection to charity heritage
Due to the newness of the concept itself, the absence of equivalent common terms in Khmer, and the lack of proper articulation in media and conversations among business communities and the public, CSR is often misunderstood or seems unfamiliar among common Cambodians. Moreover, from my conversations with Cambodian businessmen, especially small and medium enterprise owners, I have observed that they often exclusively relate CSR to traditional charitable acts performed by private companies, such as making donations or helping the poor. In fact, one business owner even believed that employee recruitment is an act of CSR because her company was contributing to the employment rate. However, it is important to note that this is only true in specific cases.
Also, as a Buddhist-dominated country, many Cambodians tend to view CSR as another way of creating ‘good karmas’ rather than focusing on systematic and sustainable approaches. While both social giving and CSR could have a similar purpose for alleviating poverty, CSR is far beyond purely charitable activities. CSR is distinct for being generally recognized as a management concept to directly enhance the company’s branding, performance, public engagement, and many more.
With examples set by industry leaders, such as ABA Bank, Smart Axiata, AIA, Sofitel, etc., CSR has become increasingly understood among local enterprises as a win-win solution to address social and environmental issues while also achieving business values.
Benefits of CSR programs
CSR initiatives in Cambodia include a variety of activities; from the simplest act of giving meals or materials to the in-needs, planting trees, picking rubbish from the street, etc., to investing in well-established programs such as promoting education, healthcare, supporting local businesses, promoting environmental sustainability, and providing employment opportunities. These initiatives can have a positive impact on the lives of community members, helping to improve their quality of life and promoting sustainable development.
CSR can also deliver several benefits for businesses. First and foremost, it enhances a company’s brand reputation and engagement. Cambodian customers, especially youths, are becoming increasingly conscious of taking advantage of their purchases for social and environmental benefits, and are active in speaking up on social media against a business causing social or environmental harm. More importantly, they are also quick to endorse companies that share their values. Many large enterprises have genuinely taken advantage of this trend to attract new customers, upsell, and leverage their brand superiority; and for some companies, CSR is a strategy to avoid consumer punishments.
The pursuit of CSR can also help businesses increase their competitive advantage. Having a strong brand identity that resonates with customers can be key to helping businesses differentiate and stand out from competitors. In addition, CSR can also lead to cost savings and operational efficiencies. For example, Cellcard X SabaiCode Full Stack Developers Training initiative offers this giant company efficiency in accessing outstanding talents while building digital skills for Cambodian youths.
Legal obligations for CSR in Cambodia
The commitment to ensuring sustainable, resilient, and inclusive social and environmental development has been a key national strategic goal of the Royal Government of Cambodia for a long time. The ‘Triangle Strategy‘ pointed out Cambodia’s prioritized objective to accelerate the adoption and enforcement of legal frameworks to promote social and environmental responsibilities and increase civic engagement of the private sector and businesses. However, similar to most Asian countries, CSR is not a mandatory statute in Cambodia and there is no specific law or policy that focuses on corporate accountability to social and environmental sustainability or ethical practice.
Having said that, it is important to note that there are different regulations that partly require businesses to promote workers’ well-being and environmental protection. For example, the government has issued several regulations related to labor standards which include, to mention a few, standards for Working Conditions, Occupational Safety, Health, and Social Security. Additionally, the Law on Investment also incentivizes investments in the nation’s prioritized sectors through tax deductions among other benefits. Last but not least, the Law on Environmental Protection and Natural Resource Management requires businesses to “prevent and mitigate pollution and environmental degradation.”
Steps to develop a successful CSR program
In order to build a successful Corporate Social Responsibility (CSR) program, it is recommended to conduct thorough assessment and planning, select the right partners, and take accountability for transparency.
1. Understand the needs of the community & stakeholders
An imperative step in developing a successful CSR program is to identify the needs of the community you’re operating in. This can include engagement with community members, local organizations, and stakeholders to understand the social, economic, and environmental challenges facing the community. Learning about community needs and comparing them to your company’s values will allow you to determine the key problem and target groups for your CSR initiative.
2. Collaborate with local experts and partners
Working in partnership with local experts and organizations is essential to the success of CSR programs not only because private enterprises need to prioritize business executions, but also for efficiency reasons. Cambodia is home to thousands of nonprofit organizations, but finding the right partners can be difficult; especially the ones that can help you deliver strategic values and impacts. Moreover, depending on your CSR initiative, engaging with local authorities might be compulsory and can become complicated if not properly undertaken.
3. Measure and communicate the impact
Measuring and documenting your CSR impact is necessary for helping you learn and disseminate to stakeholders. Make sure to set clear goals and objectives, track progress, and maintain reliable reports on the outcomes. By measuring the impact, businesses can confidently demonstrate their commitment and transparency to social and environmental responsibility. Moreover, it can help you communicate powerful stories about your CSR programs with stakeholders and engage them.
Moreover, here are key principled considerations you should always adhere to when running a CSR program:
- Sustainability: prioritize long-term values for your business, community, and environment.
- Stakeholder engagement: ask people for their views, get prior consent, avoid forcing your solutions on the community, and collaborate with experts to complement your shortcoming.
- Accountability: being transparent about your goals, progress, and outcomes.
- Ethical behaviors: act with professionalism and respect for ethical and legal standards such as human rights, respect for dignity, fair labor practice, and be inclusive.
Conclusion
CSR is increasingly becoming an important aspect of business sustainability practice in Cambodia due to its potential to meet social and environmental needs and leverage the brand reputation and competitive advantage for corporate enterprises. Many well-intended companies face challenges to build a successful CSR program; factors such as a lack of internal resources and expertise in developing, managing, and measuring the impact of CSR initiatives, and the need to establish a unique position in social and environmental responsibility. This is where you can take advantage of Giversify’s services, the first CSR management and consulting company in Cambodia, to make these complexities fade away. Get the best out of your CSR initiative while having your team focused on sales and other business matters.