Corporate social responsibility is increasingly a key issue for all commercial sectors. With the help of examples from the medtech industry and its sister, the pharma industry, Nick Tolhurst explains how being a responsible company is good for business.
Over the past two decades, Corporate Social Responsibility (CSR) has rapidly moved up the public agenda, resulting in a growing pressure on companies to demonstrate the sustainability and social responsibility of their business operations.
It may strike some as strange, but one of the industries most targeted by non-government organisations (NGOs) to improve CSR has been the healthcare industry. Why should this be the case? After all, what could be more socially responsible than companies geared to providing healthcare? The problem lies with the divided public perception of the industry. On the one hand, the industry’s products are generally considered to be ‘good’; but on the other hand, the high-value healthcare products at the top end raise expectations concerning their global availability that can be very difficult for companies to fulfil. It is easy for the general public to forget that the profits reaped from something like an MRI scanner are inextricably linked to the ability of companies to undertake costly R&D. Remove the possibility of high-profit medical products, and inevitably the opportunity for companies to develop new and expensively developed products will decline.
But CSR is not just about giving in to pressure from NGOs, or about gaining a bit of nice advertising through good causes. More profoundly, it’s about deciding what type of ethos and culture a company has. Studies have shown that it’s not only consumers who prefer businesses with good reputations: investors and regulators do too. In addition, holding onto skilled workers and attracting the most talented and motivated graduates are increasingly dependent on factors such as how the company is viewed and how it perceives itself in the wider society.
Not what you’re given
So what should companies seeking to be responsible and demonstrate CSR do?
The first maxim of good CSR is it’s not about what a company does with the money it makes, but rather how it makes the money and how it uses its resources. For example, the £2 million donated by GlaxoSmithKline (GSK) to the relief effort in 2004 following the earthquake and tsunami in Asia was surely appreciated – but of far greater importance was the immediate donation and distribution of two million doses of antibiotics and 600,000 doses of hepatitis A vaccine. As a major employer and health partner in the region, GSK was able to marshal these faster and far more efficiently than any government or even international agency.
An example of how effective a simple CSR project can be is the Personal Hygiene and Sanitation Education (PHASE) project that GSK also helped to establish. With an investment of as little as £150,000 per year, this scheme aims to reduce diarrhoea-related disease by encouraging schoolchildren to wash their hands. The reduction of these diseases not only produces obvious health benefits, but also eliminates the biggest health-related cause of absence from school.
The PHASE project has achieved impressive results so far. For example, according to the African Medical and Research Foundation (AMREF), it was found in Kenya that after four years, 88% of children from participating schools washed their hands after using the toilet, compared with 46% from non-participating schools. PHASE has now been extended to Central America and Asia. The total number of children currently reached by PHASE is estimated to be 375,000, and the aim is to exceed one million by 2010.
To sum up: good CSR is about creating ‘win-win’ outcomes – a concept that is often spoken of, but in practice can be initially difficult for those used to the cut and thrust of the commercial world to appreciate.
One final example demonstrates this clearly. The UK company AstraZeneca has recently entered into a partnership with the Voluntary Service Overseas organisation (VSO). AstraZeneca provides medical equipment and infrastructure, coupled with a staff placement scheme that allows volunteers – skilled professionals from around the globe – to take time out from their careers in order to help improve health diagnosis and treatment systems in the developing world. The costs of setting up such a system from scratch would have been prohibitive for the VSO. However, this imaginative partnership with AstraZeneca enables everybody to gain.
While AstraZeneca will reap positive publicity from such action, the greater benefit for the company is likely to be the experience of the AstraZeneca employees participating in this worldwide healthcare development project.
Studies have shown that it’s not only consumers who prefer businesses with good reputations: investors and regulators do too. In addition, holding onto skilled workers and attracting the most talented and motivated graduates are increasingly dependent on factors such as how the company is viewed and how it perceives itself in the wider society.
Good CSR is ultimately about each company using its resources, including the skills, talents and strengths of its employees, to achieve positive results for the wider society that fit seamlessly within its corporate strategy and culture. The last point is crucial. While philanthropy is to be admired, pure giving or monetary donations alone are likely to be dependent on a single manager’s decision or personal preferences. There is often little connection with the company itself, and such programmes tend to be of a transitory nature and to represent an inefficient use of resources. Healthcare businesses are uniquely placed both to bring about positive results for the wider community through a well-thought out CSR strategy and to reap the benefits of such a strategy.
What is your company doing?
|Nick Tolhurst is Director of ICCA, a non-profit CSR consultancy, and is co-author of The A to Z of CSR (Wiley, 2008). |
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