Of Profitability and Corporate Social Responsibility

Corporate social responsibility (CSR) is a principle that promotes lengthened social stewardship by businesses and organisations. CSR suggests that corporations embrace responsibilities toward a broader group of stakeholders (customers, employees and the community at large) in addition to their accustomed financial obligations to stockholders. 

A few examples of CSR include charitable giving to community programs, commitment to environmental sustainability projects, and efforts to nurture a diverse and safe workplace.

As more attention is being paid by outsiders to the social impact of businesses, corporations have acknowledged the need for transparency regarding their social efforts. While most companies in Nigeria do not publish their CSR reports, 74 per cent of U.S. companies did so in 2004. Globally, 80 per cent of the world’s 250 largest companies issued CSR reports last year.

  

Despite the apparent acceptance of CSR by businesses, many economists have taken skeptical views on CSR and its viability in a competitive environment. They believe CSR is not socially desirable at all. However, some are of the opinion that shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the centre.

Conversely, renowned economist and statistician, Milton Friedman, believe that the only social responsibility of a business is to maximise profits (conducting business in open and free competition without fraud or deception).

He argued that the corporate executive is the agent of the owners of the firm and said that any action by the executive toward a general social purpose amounts to spending someone else’s money, be it reducing returns to the stockholders, increasing the price to consumers or lowering the wages of some employees. Friedman pointed out that the stockholders, the customers or the employees could separately spend their own money on social activities if they wished to do so. Whatever the case, many companies are doing what they can whatever the experts view of their action is. 

In Nigeria, there are companies who for one reason or the other turn their eyes away from the sufferings of the people in the communities they operate in. several example abound where corporates cites tax obligations as reasons the road they ply daily to work are not tarred. There are occasions where communities where billions of Dollars are made yearly lack portable water. The story of Margaret in a community in Cross River State is one of such example.

Eminekpon community

Ten year-old Margaret lives in Eminekpon community in Cross River State in the southern part of Nigeria. Every morning, she has to wake up very early to trek for one hour to the only source of water in her community- a shallow and muddy pool. This routine often leaves her exhausted and results in her skipping an occasional class at school. For many rural communities around the country, safe sources of water are limited or at best non-existent even as many others rely on water from streams, rivers or lakes. 

As for defecation and other sanitary practices, these are typically done in the open and often within the vicinity of nearby water sources.  Environmentalists have harped on the fact that clean water and sanitation are two of the most basic and essential building blocks of a safe and healthy life. Incidentally, statistics on safe water sources and sanitation practices paint a very grim picture for many rural and urban settlements across the globe.

According to the final report on Millennium Development Goals (MDGs), more than a third of the world’s population (2.4 billion) is still without improved sanitation. The target to halve the global population without adequate toilets by 2015 has not been reached. Consequently, sanitation has been pushed on to the post-2015 sustainable development goals (SDGs).

Water Borne Diseases

Research shows that poor sanitation contributes to diarrheal diseases and malnutrition through faecal contamination of food and water. Water borne diseases such as cholera and diarrhoea account for the death of about 121,800 Nigerians, including 87,100 children under the age of five yearly.

Eighty-eight per cent of those deaths would have been prevented if affected communities had cleaner and safe facilities as these deaths are attributed to poor sanitation. Poor sanitary conditions do not only fuel the spread of diseases. There are broader consequences. For instance, a survey conducted by Water Aid in an area of Lagos revealed that 69 per cent women and girls without access to toilets are at higher risk of verbal and physical harassment when they relieve themselves. The economic cost of poor sanitation is also inimical to development in any nation.

The Nigerian Water and Sanitation Program estimates that poor sanitation costs the country at least 3 billion US dollars each year in lost productivity and health care expenditures. When one considers other infrastructural challenges that would have been met with the said amount, the case for improved sanitation becomes even more compelling.

Guinness Leads by Example

To play a part in promoting health and hygiene in Nigeria, Guinness Nigeria Plc has partnered with Concern Universal, to pioneer a sustainable method of integrating rural sanitation and hygiene promotion with access to safe water - a key sustainable development goal. The partnership is geared towards strengthening Guinness Nigeria’s Water of Life scheme which commenced over 10 years ago.

Guinness Nigeria’s partnership with Concern Universal provides access to safe water in 10 rural communities in Abi, Bekwarra, and Obanliku Local Government Areas of Cross River State. A key innovative element of this initiative is the emphasis on local governance of boreholes. In order to sustain the impact of new water points, communities create ‘Water Sanitation and Hygiene Committees’ (WASHCOMMS).

This committee oversees the day to day operation of boreholes and facilitates repair and maintenance when necessary. Promoting ownership and local governance goes a long way in ensuring the sustainability of water facilities.

Country Director of Concern Universal Nigeria, Tim Kellow is confident about the prospects of the unique model that emphasizes local governance.

“There are so many boreholes all over rural Nigeria but about 50 per cent, if not more, of these are dysfunctional, contaminated or abandoned, so it is not a case of just lack of access to water from boreholes, but the lack of capacity to maintain and keep the boreholes in a functional state. By supporting local governance and ownership we tremendously increase the likelihood for completed projects to last for many years,”he said.

Water Projects

An engineering professor at Tufts University, Daniele Lantagne corroborates this position as she avers that the key to successful water projects in rural areas is that they be locally-operated and can be maintained over the long-term. This approach, hopefully, would help to reduce the number of abandoned water projects around the country.

According to Corporate Relations Director, Guinness Nigeria Plc, Sesan Sobowale, the Safe Water and Improved Sanitation and Hygiene programme was inspired by the recognition that about 63 million Nigerians do not have access to clean water.

“This is why Guinness Nigeria Plc and the Diageo Foundation teamed up with Concern Universal to provide clean water for rural communities in Cross River State, “Sobowale stated.

He added that the partnership will help beneficiary communities have access to clean water and ultimately improve their overall health and wellbeing.

Sobowale also noted that the ten new water projects funded by Guinness Nigeria Plc and the Diageo Foundation will  complement 25 other Water facilities Guinness Nigeria has sponsored under the aegis of its flagship ‘Water of Life’ Scheme.

“The health and socio-economic benefits of improved access to safe water and adequate sanitation provide the most compelling arguments to support partnerships that promote hygiene and sanitation. From a health perspective, one major benefit of improving access to safe water supply and proper sanitation is that it helps to reduce incidents of diarrhoea and other water-borne diseases while correspondingly reducing the number of deaths occasioned by them. Consequently, money that would have been spent to treat these diseases can be deployed into other profitable ventures by households.

“Also, the time saved by citing boreholes closer to user communities is another major benefit. This in turn means that there would be increased productivity among the population, children no longer need to trek long distances in search of water thus improving school attendance rates. Parents also have more time to engage in economic activities that enhance their livelihood, “he added.

Thanks to the Guinness Nigeria–sponsored ‘Safe Water and Improved Sanitation and Hygiene’ Programme Margaret’s community now has a new lease of life. Margaret on her part has become more upbeat about the future she has ahead of her.

"Before we got clean water in our village, my life was very different. I was always sick and had horrible skin rashes because it was hard to get clean water. But now, I am looking forward to a healthier life and brighter future. Who knows, I might just become a health and hygiene teacher when I leave school", Margaret said.

-This Day Live