Creating Corporate Equity Through CSR

No matter what size your company is. No matter in what industry your factory makes products. Making meaningful contributions to the surrounding environment and community is critical for success. Companies often don't understand this point, and become confused, thinking that CSR is synonymous with "charity" or ability to somehow demonstrate that they are "good corporate citizens".

But meaningful CSR doesn't need to be expensive, or large scale.

The point is, CSR, to be actually meaningful, must be more than a "photo opportunity for your President". PR is not the reason or the main benefit of CSR. Sustainability and creating competitive advantage through CSR is.

Consider the 3 words that CSR represents:

• Corporate - A company's necessity to survive and grow is a paramount foundation for CSR.
• Social - The ability for society and community to benefit from a long term partnership with a local company or factory is in their best interest.
• Responsibility - Forming a wise partnership between business and the greater surrounding community

Interdependence Between Society and Corporations

"CSR can be much more than just a cost, constraint, or charitable deed. Approached strategically, it generates opportunity, innovation, and competitive advantage for corporations - while solving pressing social problems."
Michael E. Porter and Mark R. Kramer, "Strategy & Society: The Link Between Competitive Advantage and Corporate Social Responsibility".


In this important article, a company's core necessity to survive remains unquestioned. There is no choice that is posited whether or not a company should engage in CSR activities. But rather it explores how companies that proactively engage in meaningful CSR programs derive long term benefit from CSR activities. Competitive advantage is in fact created by engaging in CSR. Companies that don't understand this are failing to reap the benefits that CSR affords them.

Porter talks about how Toyota became actively engaged in emissions control technology long before it was taken seriously by other manufacturers. Doing so gave it competitive advantage over rivals.

Is Your Company Much Smaller Than Toyota?

Size of enterprise is obviously not the issue. Most of AMC's customers are small to medium size enterprises.

The question is: what will your company do to create competitive advantage through CSR?

Here are three steps that might help you to begin to answer that question:

1. What is the intersection between what your company makes and the surrounding environment and community?
2. What do you need to do to actively engage your employees and managers in what they feel is worthwhile CSR?
3. Remember that to be a meaningful CSR initiative, how much money is spent is not the issue. Keeping it local, close to the intersection between what your company makes, whom are the people it impacts, what are the long term effects, and community and environment involvement is important.

Examples of Creation of Competitive Advantage For Small to Medium Size Factories

Corporate sponsorship of well digging. Availability of drinkable water close to where your employees and their families live is critical for them, and for your factory to have workers. Investment in local clean water initiatives remains an increasing priority.



Providing employment to retired persons. What are the critical skills you find lacking in your factory? Employing retired experts who wish to participate again in giving back from their knowledge and experience to help your younger factory workers can create long term bonds between your factory and the community. This allows senior family members to contribute to family income and builds strong links between your factory and the community that will decrease employee turnover.

Creation of educational opportunities for girls. Oftentimes in Asia we see certain industries that tend to employ a much higher percentage of young female workers than males. Usually these girls are under skilled and from poor, rural backgrounds. Contributing factors to this may involve educational opportunities not being equal for boys and girls. Have you thought about sponsoring a scholarship for a small number of girls to learn advanced coursework at a technical school. The coursework could be in the same technical areas that your factory is understaffed in. Create a win-win solution by giving these girls a greater career boost. The talent gap at your factory is decreased and your CSR initiative is paid for many times over.


Engagement of your young professional staff in causes that matter to them. Your younger, trained professionals can often be a source of inspiration as well as direction for key CSR related initiatives. You probably have a training budget for your young professionals. You have provided them training opportunities. You worry that they may leave your company and go next door for a slightly higher salary. Often heard here in Asia. But how have you engaged these motivated young people in ideas that are important to them in their lives outside of work? Do you know what are the issues they care about? If you think they are only motivated by money you are wrong. Engagement of your staff in CSR issues is critical to success. A company that donates tremendous sums of money to certain media-coverage-rich campaigns based on the decision of its Board of Directors is likely spending its CSR dollars in a way that won't return anything on its investment. Engage your staff, take time to find out what social and environmental issues are important to them. This emotional bond will yield results both externally to the community and environment as well as internally within your company.

Good CSR is Meaningful to Both The Greater Community and To Competitiveness

The necessity of every enterprise to seek competitive advantage is enhanced by its CSR initiatives. Who chooses what to invest in and what directions those initiatives are ultimately pointing towards will determine if the CSR budget has been well spent in helping to grow the enterprise. Win-win CSR initiatives are waiting for you to discover. Keep them meaningful to your enterprise. Keep them local. Engage your employees in their determination. Good CSR is both good for the community and good for your bottom line.

Further Resources To Support Your CSR Initiatives

AccountAbility is an organization which has developed guidelines for CSR reporting standards which are transparent and widely adopted by many world-class companies. www.accountability21.net

Michael Porter and Mark Kramer's "Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility" can be purchased at Harvard Business Publishing

Another important, ground breaking paper in this area is "Using Corporate Social Responsibility to Win the War For Talent" by Bhattacharya et.alia, available from the MIT Sloan Management Review


SA8000 is a well developed and internationally recognized Standard for internal CSR policies. For more information on this standard please visit the SAI site.

AMC offers for PDF download a complete presentation of how to create corporate equity through CSR. We encourage you to download and use this important material. (Creation of Corporate Equity Though CSR, English, 9.8MB, PDF. Note: due to file size, best for high-bandwidth internet connections)