The evolution of CSR in Singapore

Singapore companies have come a long way in the Republic's decade-long Corporate Social Responsibility journey, but it isn't nearly enough, says Eco-Business editor Jessica Cheam.

Greenpac is a home-grown green packaging company that has gained media attention in recent years, thanks to the numerous business awards it has won and its gung-ho female chief executive, Ms Susan Chong.

The company has carved a niche for itself in offering customised eco-friendly packaging to a diverse range of companies, including Fortune 500 firms. It specifically sources for environmentally sustainable materials, and has created unique packaging solutions that are collapsible, reusable and returnable so that its clients reduce waste and save money.

The firm also has an inclusive hiring policy - it employs a disabled worker and subcontracts selected projects to ex-offenders under the Yellow Ribbon initiative - and a comprehensive workplace health and safety system.

When it opened Singapore’s first “green factory” featuring a solar panel rooftop and state-of-the-art, energy-efficient technologies two years ago in Jurong, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam commended the firm as an example of how it is possible to pursue commercial profits while contributing to a better environment and social well-being.

From a one-woman band in 2002, Greenpac has since grown into a multimillion-dollar SME today with 35 employees.

Speaking at the annual International CSR Summit held in Singapore last week, Ms Chong declared that Greenpac dispels this notion among businesses that “going green” is costly. The firm is living, breathing proof that business success is directly linked to sustainable business strategies, she said.

Sustainable companies like Greenpac are growing in numbers globally, but unfortunately still not fast enough in Singapore.

This year, the local CSR movement marks its official 10th birthday, providing the perfect opportunity for some navel-gazing on its progress.

CSR is widely defined as integrating social and environmental factors into business operations.

In its early years, its application here was largely confined to tree-planting or cheque-writing for charities, but in recent times the term has evolved to take on more dimensions, such as corporate responsibility (behaving responsibly to your stakeholders), corporate citizenship (creating value for society) and most recently, corporate sustainability (all of the above).

Although its practice can be traced back to the 1960s, when major labour practices were established during the post-independence years, the CSR movement was given a formal body only when the Singapore Compact for CSR was launched in 2005.

In June this year, the national society rebranded itself as the Global Compact Network Singapore as it became a formal network for the United Nations Global Compact (UNGC), a worldwide initiative started 15 years ago to engage corporates to adopt sustainability principles such as the safeguarding of human and labour rights, environmental conservation and anti-corruption.

Currently, more than 8,300 companies across 156 countries are part of the UNGC and they include multinationals such as shipping giant Maersk, Chinese oil producer Sinopec and consumer goods giant Unilever.

At a 10th anniversary dinner last week, its president, Mr Kwek Leng Joo, noted that Singapore’s CSR journey has come a long way since the initiative was supported by many tripartite leaders at its birth. Then NTUC secretary-general Lim Boon Heng even led a high-level CSR study mission to the United Kingdom in 2004 to understand what it would take for companies to adopt CSR in their business model.

Since then, the compact has grown from a handful of firms as members to 500 today; and many companies have moved beyond defining CSR as mere philanthropy and volunteerism, said Mr Kwek, who is also property firm City Developments’ deputy chairman.

“But even though corporate responsibility and sustainability have become increasingly important, its adopters here are still in the minority.

“But this is not enough. We need more companies to realise that stakeholders such as consumers, investors, governments and employees know what good corporate behaviour should be,” he noted. And he is right.

The recent incident involving BreadTalk is a case in point. The local bakery chain caused a public uproar last month when customers caught its staff repackaging Yeo’s soya milk as “freshly prepared”. Even though this is a far cry from the worst of corporate transgressions - think BP’s disastrous oil spill in the Gulf of Mexico in 2010, or Brazil’s Petrobras billion-dollar corruption scandal brewing this year - and not technically illegal, BreadTalk’s actions were far from ethical and it paid the price with its reputation. Many of its customers commenting online also threatened to stop buying its products.

Also, recent surveys show that consumers are increasingly buying products and services provided by sustainable companies, and the youth are flocking to them for work too.

According to the 2014 Nielsen Global Survey on CSR, 64 per cent of consumers in Asia-Pacific were inclined to buy from socially responsible brands. And the 2015 Deloitte Millenial Survey, which polled 7,800 people across 29 countries, found that millenials - or youth - prefer to work for a business with a heart and expect businesses to have a positive impact on wider society.

But even though corporate responsibility and sustainability have become increasingly important, its adopters here are still in the minority.

At the summit, Mr Kwek called for the Prime Minister’s Office to consider adopting the compact in order to give it a stronger mandate to realise its vision to “make sustainability mainstream amongst businesses in Singapore”.

In countries like France and Luxembourg, he noted, dedicated ministries have been set up to oversee issues relating to sustainable development.

This is not a bad idea for Singapore to copy, especially given its ambition to be a leading sustainable city. It might be worth setting up a dedicated agency to coordinate sustainable development efforts among local organisations, much like the Municipal Services Office does on municipal issues.

In addition, the Government can also establish for the compact something similar to the 2001 Singapore Business Federation (SBF) Act, which automatically includes all companies with a paid-up capital of $500,000 and above as members of the SBF, the apex body of the business community in Singapore representing its interests locally and overseas.

Already, the SBF has been promoted to a “principal member” of the compact to help promote corporate sustainability in Singapore. It makes sense for all businesses who are members of SBF (currently at 21,500, compared with the compact’s measly 500) to be inducted into the corporate sustainability movement, given its benefits, growing relevance in the global business landscape and Singapore’s own sustainability goals.

Left to their own devices, companies will languish and those like Greenpac may still be among the minority come the next decade. As CSR continues to evolve in Singapore and globally, the question that all business leaders should be asking themselves is this: Am I an enlightened leader or an ignorant laggard?

-Eco-Business