Table of Contents

Executive Summary.............................................................................................................1
Introduction..........................................................................................................................1
History..................................................................................................................................2
CSR in Pakistan...................................................................................................................3
Delivery mechanisms...........................................................................................................5
CSR Projects........................................................................................................................5
P&G.................................................................................................................................5
PSO..................................................................................................................................6
Kashif Trading Corporation.............................................................................................7
Some Facts and Figures Regarding CSR Donations............................................................8
..............................................................................................................................................8
..............................................................................................................................................8
Laws regarding CSR in Pakistan.........................................................................................9
Ethics of CSR.......................................................................................................................9
Marketing Value of CSR....................................................................................................10
Why companies should take part in CSR activities?.........................................................11
Problems ...........................................................................................................................12
Recommendations..............................................................................................................14
Appendix............................................................................................................................15
Corporate Social Responsibility Marketing Issues in Pakistan

Executive Summary

CSR has become the latest ‘buzz word’ in the

corporate sector. Many people and organizations are
seen flaunting this term without really understanding
the true meaning of CORPORATE SOCIAL
RESPONSIBILITY.

During our research we found that most people are

blatantly unaware of the requirements and benefits
of CSR. In this report we go about correcting some of
these misconceptions and present the current status
of CSR in Pakistan.

We discuss some problems regarding CSR and also

suggest recommendations that can make it more
effective in Pakistan.

Introduction
Corporate Social Responsibility (CSR) is a concept whereby
organizations consider the interests of society by taking responsibility
for the impact of their activities on customers, employees,
shareholders, communities and the environment in all aspects of their

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Corporate Social Responsibility Marketing Issues in Pakistan

operations. This obligation is seen to extend beyond the statutory

obligation to comply with legislation and sees organizations voluntarily
taking further steps to improve the quality of life for employees and
their families as well as for the local community and society at large.
Basically CSR is a term generally used to express the idea of a
continuing commitment by companies to behave ethically and
contribute to economic development of the country, while improving
the quality of life of their workforce, their families, the local community
and the society at large. 1

History
The CSR concept evolution started with the concerns related to the
damage created by business on environment and society at large by
way of activities linked to their business operation. Businesses are
expected to clean up the mess they have generated to the
environment. Until the 1980’s CSR was considered same as corporate
philanthropy. The current CSR concept started formulating in early
80’s. In 1980’s and 1990’s events like Shell spoiling the environment
and violating the human rights in Nigeria, started a new wave of
criticism which triggered a completely different thinking on CSR and
hence many CSR definitions emerged during this period. Customer
expectations and demand for “clean and green” companies have led to
a number of benchmarks and guidelines, such as the Sullivan
Principles, the UN Global Compact etc. Hence, CSR has continued to
evolve rapidly over the last thirty years and companies now all over
the world are expected to engage in CSR activities to be recognized as
a socially responsible company that not only looks after the interests of
itself but also after the interests of the society.

1
Wikipedia.com

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Corporate Social Responsibility Marketing Issues in Pakistan

CSR in Pakistan
At present the general perception of a corporate organization in
Pakistan especially of local organizations is that it is out just to make
money, without giving due consideration to the consumers. Therefore
this perception has to be changed and a relationship between
corporate citizenship and the consumers has to be established.

Unfortunately in Pakistan, except for a few, there is a general lack of

sincerity in the concept of Corporate Citizenship and CSR is used as a
gimmick to enhance the image of the Corporation. Most corporations
just believe in lip service and cosmetic contributions which project their
organizations or their products.

CSR in Pakistan seems to focus on how much donations an

organization contributes to health, environment and education
programs, but overlooks its obligations and commitments to the
consumers. If corporations do not serve society and their consumers in
letter and in spirit, then there will be a gradual breakdown of trust and
respect for corporations and we will witness an "anti corporate"
movement.

To protect consumers from unscrupulous manufacturers, good

manufacturing practice and corporate social responsibility must be
encouraged. Such organizations must step forward and be the leaders
and set an example and voluntarily observe the Principles of Business
Ethics by providing quality products at a fair price to the consumers.

The state of CSR in Pakistan is still in its infancy. Only a few companies
have an existing CSR strategy and mostly they are the multinationals
who follow their own globally defined CSR policies and standards.
Unfortunately, the local industry is either unaware of the benefits
brought by CSR or they feel that even if they do not adopt such
policies, they are not in any state of danger. The apathy of the local
business sector was highlighted in the 1996 by the breakdown of the
local carpet industry and the threat of damage to Sialkot’s sports
industry. Labor exploitation, child labor, inadequate employee benefits
and unsuitable working environment were few areas pinpointed by
international HR watchdogs. Though taking the reactive measures, the

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Corporate Social Responsibility Marketing Issues in Pakistan

joint effort of the industrialists saved the greater damage foreseen, but
not much has been done to take more proactive measures. 2

In 2003, a multi stakeholder forum “Pakistan Compliance initiative”

was launched with support from international buyers, the textile sector,
and the Ministry of Commerce. A draft national standard was
developed for use as compliance standard approved by Government to
replace many International social and environment compliance
standards and buyers code of conduct. The result of this effort was
inclusion of social compliance in the trade policy and initiation of a
project proposal by Ministry of Science and Technology to European
Union for encouraging SA800 implementation by subsidizing consulting
and implementation cost. In Pakistan, CSR is frequently equated with
corporate philanthropy, the terms being often mistakenly used
synonymously. Some consider CSR to be a simple compliance with law.

This creates a difficulty because top management is still uncertain

about the true meanings of CSR. This indicates the need for a mass
awareness campaign supported by the government, targeting
businessmen, entrepreneurs and customers so that they are able to
appreciate CSR and also the general perils of non-compliance in
today’s environment. Frequent and open discussion defining and
understanding CSR, detailing its nature and promoting and developing
methodologies on how local businesses adopt and manage their CSR
obligations would be a useful first step to make companies more aware
about the benefits of CSR.

In Pakistan, most multinational companies that engage in CSR

activities do so through two channels.

• Corporate CSR
• Brand CSR

Corporate CSR: The company as a whole engages in CSR activities

without specifying any of its particular products or services. The
objective for the campaign is to promote the image of the company
and improve their credibility.

2
Evaluation of the state of CSR in Pakistan by Ambreen Waheed

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Corporate Social Responsibility Marketing Issues in Pakistan

Brand CSR: When the company engages in CSR activities to promote a

particular brand. Here, the company tries to associate its brand with
the positive image of their CSR efforts so that whenever the customers
look at the particular brand they will remember the CSR project as well.
This creates a certain level of differentiation for the brand in the minds
of the customer.

Delivery mechanisms
Most Pakistani local companies give directly to the people they think
are worthy. In most cases this remains on the discretion of the CEO or
MD of the company. Companies do not reserve certain percentages of
their budgets to be spent on CSR activities. There is no planning or
plans of action devised to handle different scenarios. Situations are
dealt with as they arise. We must have a more structured approach to
CSR. The lack of planning and scrutiny of the whole process greatly
decreases the effectiveness of the campaigns. MNC’s often form
partnerships with NGO’s or government agencies to work on their CSR
campaigns. In this way they don’t have to allocate a lot of their own
resources and still get the job done.

CSR Projects

P&G3
• ‘Khawabon Se Aagey’ is an initiative by P&G in association with
PMA (Pakistan Medical Association). It aims to help save the lives of
newborn babies by providing lifesaving equipment and training to
hospitals across Pakistan. Between 15 Dec 2007 and 15 Mar 2008,
a portion of the sale proceeds of the 8 participating brands
(Pampers, Ariel, H&S, Always, Safeguard, Pantene, Oral-B and
Vicks) will be used to donate the equipment and conduct trainings
for the medical staff.

• ‘Safe Schooling for Building Future’ is another initiative taken by

P&G. they are working in association with the largest indigenous
3
Interview

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Corporate Social Responsibility Marketing Issues in Pakistan

NGO ‘READ Foundation’ to build Seismic Compliant Schools in the

areas affected by the massive earthquake of 2005. A 38 classroom
school for boys, girls and young kids aged 4-16 in main
Muzaffarabad city, capital of Azad Jammu & Kashmir (AJK), marks
the beginning of this project.

• Always School Education Program educates female students about

good health & hygiene practices. The program reaches 250,000
girls, 1400 schools/ colleges, in 3 cities of Pakistan.

PSO4
PSO in its commitment to CSR is working in the following sectors:

• Education: Institution of gold medals, cash awards and

scholarships in top institutions like IBA, UET, NED and LUMS.

• Health Sector:
•Provision of financial assistance to MALC (Marie Adelaide Leprosy
Center) Gawader.
•Aided Chipa Welfare Association in the purchase of a fully air
conditioned ambulance.
•Supported Dowites Operation Theatre Society (DOTS) in the
construction of an integrated operation theatre complex at Civil
Hospital Karachi.

• Community Building:
•Children Welfare: PSO has generously supported Institute of Special
Children Quetta and Pakistan Institute of Deaf Children of rural areas
Kamoke, Gujranwala to upgrade their equipment to facilitate
imparting of education to the special children
•Women Empowerment: supported Behbud Association and Rashid
Welfare Organization to impart technical training and education for
the uplift of female segment of society.
•Sports Development: Sponsored world class tournaments in sports
like Squash, Boxing and Football which are very much neglected in
Pakistan.
•Relief Activities: recently in 2007 when a cyclone crippled life in
southern coastal areas of Pakistan in Balochistan, PSO was in the
forefront to dispatch the much needed food and other supplies to the

4
Interview

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Corporate Social Responsibility Marketing Issues in Pakistan

affected areas. Also PSO has helped in relief works when a severe
earthquake hit Pakistan’s northern areas.

Kashif Trading Corporation5

• Gave money and presents as ‘Eid’ during the month of Ramazan to
all of their employees.

• Occasionally extending loans to those employees who require some

quick cash for emergencies.

5
Interview

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Corporate Social Responsibility Marketing Issues in Pakistan

Some Facts and Figures Regarding

CSR Donations6

6
Article, The NEWS, 11/2/06

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Corporate Social Responsibility Marketing Issues in Pakistan

Laws regarding CSR in Pakistan

Although there are no formal laws listed anywhere in Pakistan that
force companies to engage in CSR activities. However the SECP, which
is the formal law making body for companies listed under the stock
exchanges in the country, through its Code of Corporate Governance,
encourages and rewards companies that engage in CSR activities. It
frequently conducts seminars and workshops that highlight the fact
that socially responsible behavior can have a tremendous impact for
companies in terms of reputation, employee morale, competitive edge
and productivity and in the larger context, the benefits of social
development do come back to the corporations in terms of bigger,
better and richer markets.7

Ethics of CSR
Ethics in CSR is a very controversial issue. Many people say that purity
of CSR diminishes as profitability becomes part of it. It is not ethical if
the underlying motive is ‘Profit’ not the good of the society. Supporters
of CSR with profitability, say that there is no harm in making a profit
while achieving something positive for the society. Also, we need to
have some kind of profitability attached with CSR to make it
sustainable and long lasting. Entrepreneurs and corporations will only
invest in a venture which shows some kind of a return. There are many
researches that prove this point of view. (For details see reference
material.)

Sometimes associating a CSR campaign with a well known brand can

substantially increase the campaign’s effectiveness. The positive brand
image and brand promise are carried forward to the campaign as well.
A campaign ran by Tapal is a good example. Tapal ran a public health
campaign with the name ‘Ham Qadam’ but they received a very
lukewarm response. Surprisingly, when they added their name ‘Tapal’
to the campaign, they received a significantly better response. Without
the good name of Tapal being associated with the campaign, the
initiative may very well have failed.
7
Press Release “SECP holds Consultative Seminar on CSR Strategy in Karachi on
March 22, 2006 “

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Corporate Social Responsibility Marketing Issues in Pakistan

Marketing Value of CSR

CSR has a substantial value for any corporation or brand. We are
bombarded by numerous brands and products through the vast
number of media outlets. In most of the cases the different products
have very little differentiation between them. CSR is an effective
method of achieving that differentiation. Consumers will prefer
products that are supported by good CSR programs because they will
think that just by buying such products they are doing something good
for the society. There is an emotional link between consumers and the
brands when the company invests in social causes that are dear to
them. Consumers will want to reward such organizations so that they
are encouraged to do even better in the future. Companies design their
CSR campaigns in such a way that they become closely associated
with their brands. Commander Safe Guard campaign is all about good
hygiene and it relates with P&G’s product Safe Guard soap. Mobilink
supports campaigns that are mostly ‘ICT centric’ such as SMS donation
campaigns. Customers will relate the company’s integrity with their
product-SMS.

Companies like to build goodwill in the market so that they can use it
to counter negative publicity in the event of an accident or if they are
caught doing something illegal. If there is an oil spill, then the guilty
company can always say that the public should forgive them because
they have always been a socially responsible company and this oil spill
is just an accident. CSR can provide a kind of ‘brand insurance’.

Companies like Tetra Pak invest a lot of money in recycling & waste
disposal campaigns designed to reduce the waste created due to their
products. They understand the damage that can be caused to their
reputations if the consumers ever realized the amounts of resources
used and waste materials created by such companies. Tetra Pak works
with a local waste disposal company ‘Waste Busters’ to mange solid
waste in different localities. They also try to educate their customers
about such issues.

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Corporate Social Responsibility Marketing Issues in Pakistan

Why companies should take part in

CSR activities?
In most cases the customers not only demand but also expect leading
brands and companies to actively take part in CSR activities.
Consumers prefer socially and environmentally responsible companies.
We must realize that there are definite social and environmental costs
of most commercial activities. It is only fair that companies return
some of their profits to help reverse any damages they have caused.
Governments cannot do this job all alone. Corporations have better
resources and better management skills to help in such actions and
they must do their part.

In most cases having some kind of a CSR program is a requirement of

the government or regulatory authority. Sadly, in Pakistan we don’t
have such laws but the Code of Corporate Governance given by the
SECP encourages companies to participate in CSR initiatives.
International organizations like the UN also encourage such
participation.

Interestingly, it has been observed that companies that are more

socially responsible also do better financially. If you look at any list of
most successful companies, you will find that they also have
substantial CSR programs. Consumers prefer buying from such
companies. Governments help them by decreasing taxes and easing
regulations. A company that invests in its surroundings has more
credibility. Such companies are also able to attract and retain the best
employees because people want to work in companies that reflect the
same values as them. This is a new phenomenon in Pakistan. It is
expected that as the economic conditions improve we will face a
severe shortage of qualified personnel and a laudable CSR campaign
may prove to be a valuable differentiating factor for companies if they
want to attract and retain a quality work force.

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Corporate Social Responsibility Marketing Issues in Pakistan

Problems
Miss Nausheen Ishtiaq of P&G told us that the biggest hurdle in her line
of work is the non-availability of a credible database on all the different
NGOs operating in Pakistan. It is very difficult for them to find suitable
partners for their CSR campaigns. She suggested that it will be a great
help by the government if they can prepare and regulate such a
database on a national level. Most NGOs are there only to make profits.
There are very few NGOs which have the capability to make decent
and viable proposals and then also fall through on their commitments.
There are several opportunities out there but few people to make them
feasible.

There is not much insistence or any incentives given by the

government to implement CSR. Like other developing nations
Pakistanis stress on short term profitability and over look future
opportunities or consequences. Mr. Vaqar A. Khan, GM Training & Org.
development even says that sometimes influential people from the
government try to force companies to divert CSR activities to benefit
them. The apathetic attitude of the government restricts the growth of
CSR in Pakistan.

There is a lot of negative sentiment in our society regarding intentions

of NGOs & MNCs when they initiate CSR programs like women
empowerment, female education in rural areas and gender
development. This adverse mindset poses a serious challenge and in
some cases even a security risk.

Sometimes corporations are involved in activities which they term as

being part of CSR but actually they are in involved unashamed abuse
of CSR. A recent example is the making of the biggest ‘Kurta’ in the
world by P&G. The kurta was unveiled amidst much media hype and
fanfare. The kurta will later be cut in to smaller pieces and then
donated to charity. The kurta was designed and tailored by a renowned
designer and the fabric was bought from one of the most expensive
local cotton fabric brands. The company has termed this project as a
social welfare project. To any casual observer this exercise will look like
a shameless brand promotion campaign with the social factor thrown
in as an afterthought. Such false claims only serve to decrease the

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Corporate Social Responsibility Marketing Issues in Pakistan

credibility of companies. Companies must learn that they cannot term

anything they do as a social welfare project.

There are many commercial enterprises which are extensively

damaging our environment. There is no enforcement of Environment
protection laws in Pakistan and these companies do not have the social
conscience to do the right thing on their own. If there had been a
culture of CSR prevalent in Pakistan, such companies will have to
reverse all the damage that they have caused and reduce the harm
that they cause to the environment. The leather industry loses out on
many lucrative contracts because international customers only want to
buy from companies which do not pollute the environment and
Pakistani companies never bother about such issues. It makes
economic sense for them to be more environmentally conscious but
they remain indifferent to the issue.

Many companies do not advertise their CSR campaigns, preferring to

remain in anonymity.

“As Asif Qadir, CEO Engro Chemical questions, “We are not doing CSR
with brand objectives. How can we link ‘save the blind dolphins’, ‘micro
irrigation’, ‘mangrove management’ and tele-medicine projects to any
of our brands?”

Abrar Hassan, Chief Executive of National Foods, also believes in

maintaining a low profile in regard to CSR. He says, “It is our
responsibility to be socially responsible and I believe it is unethical to
link CSR with the company image and brand mileage concepts.”

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Corporate Social Responsibility Marketing Issues in Pakistan

Recommendations

• The government should take a more active part in enforcing CSR.

They should make laws and also give incentives to businesses to
participate in CSR.

• There should be some kind of a regulatory authority to oversee CSR

activities and especially control NGOs.

• Businesses should not only consider the benefits brought to them

by CSR but they should also get involved for the good of the
society. We need to educate them on this issue. SECP and other
such organizations must intensify their efforts in regard to
increasing awareness.

• Consumers can wield their power and force businesses to be more

socially responsible. They can simply make a decision not to buy
products from companies that are not doing their part for the
environment and society. This simple act of choice can work
wonders. Consumers can prove to be most effective tool in
promoting CSR.

• Employee rights also form a part of CSR. According to our research,

in Pakistan no company deals with employee rights under the head
of CSR. Employee rights can receive more attention if they become
a part of CSR. Employers must come out with fair and just rules for
their employees.

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Corporate Social Responsibility Marketing Issues in Pakistan

Appendix
“The Aga Khan Foundation has set up the Pakistan Centre for
Philanthropy (PCP) to study this issue in a systematic manner.
According to a study commissioned by the Aga Khan Foundation,
Pakistanis from diverse economic backgrounds contributed Rs41 billion
(including cash and in-kind) in 1999. A significant 28 per cent was
given by the lowest economic strata. In comparison, corporate
philanthropy severely lags behind.

A 2005 report by the centre titled ‘Corporate Philanthropy in Pakistan –

2005’ examined the role played by the public-limited companies from
2000 to 2003. According to it, 500 listed companies gave Rs227 million
for philanthropic purposes in 2000. By 2003 this almost doubled to
Rs496 million suggesting an improvement in the trend, but still
remains significantly low compared to the overall philanthropy
receipts. Average annual donations hovered around Rs0.9 million in
2003, as compared to Rs0.5 million in 2000. It is pertinent to qualify
here that public-listed companies do not represent the entire universe
of the business sector; they only represent the organized sector.
Therefore, private companies and/or semi-formal and informal
business sector’s contribution put together would be higher than this.

Within the organized sector, the top 25 public listed companies

account for almost two-thirds of the total donations in 2003. According
to the rankings of public listed companies by volume of donations as a
percentage of profit before tax (2000-2003). A closer look at the data
reveals 19 out of the 25 companies give less than 8 per cent of their
profit before tax for philanthropic causes. PCP data curiously does not
list contributions made by the banking sector. The National Bank of
Pakistan made over eight billion of profit in the recent past. There is
little information available about its donations towards corporate social
responsibility (CSR). Interestingly the figures show that if all public
listed companies were to provide an additional one per cent of their
profit before tax to CSR, the total volume of corporate sector
contribution would increase three-fold.”

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