The Poor Don’t Want CSR, They Just Want A Job

[The] Poor … have their own dignity and do not wish to be regarded the begging bowl of the economy. They don’t want hand outs. Philanthropy by itself does not create sustainable value for them. They want jobs, fair wages, fair trading, responsible investing, ethical buying and
transparency in transactions.
World Council for Corporate Governance

Corporate Social Responsibility has often been lauded as businesses’ response to the problems of poverty and disadvantage their contribution to creating a better and more equitable society.

Many corporations themselves also include grand aims of
poverty reduction in their stated goals for their CSR programmes. But are CSR initiatives actually directed at responding to the poor’s needs, to reducing poverty and disadvantage?

Leaving aside the myriad CSR projects that are little more than loosely packaged marketing, most of the remaining CSR projects (especially in Pakistan) are engaged in community and social development, such as health and education projects.

These are (in the main) useful and beneficial for the poor, but what many of the poor want most of all is a job and an income, an area where precious little CSR attention is being focused.

The Role of CSR For the Poor?

Now of course CSR is not purely (or even primarily) focused on helping the poor and disadvantaged. CSR is not philanthropy or charity, but rather it is doing business in a socially responsible way.

But yet many companies do state that their motive (or part of) for engaging actively in CSR is to help the poor and disadvantaged.

For example, “SSGC deserves praise for wholeheartedly contributing towards the national agenda for poverty alleviation”, as stated on Sui Southern Gas Corporation, Pakistan’s website.

Firms engage in a variety of education, healthcare and welfare projects, which is laudable, but slightly missing the point if the first hope of the poor is employment, a livelihood, a job.

The understanding that employment and job creation is critical to poverty reduction has been growing in recent years, although note that there is quite some debate in this space. According to the World Bank 2009 report, “China and India Account for a large share of the World’s Poverty Reduction”.

Multinational organisations such as the UN, World Bank, ILO and UNIDO have promoted economic development initiatives as a response to poverty and disad-vantage, and Government-funded donor agencies (for example, USAID, CIDA and DfID) have invested significant sums of money in job creation and livelihoods projects.

But although the donor development community has (albeit slowly) come around to the understanding that job creation can significantly reduce poverty and disadvantage, businesses themselves still focus the majority of their CSR attention on social welfare projects.

It’s All About Jobs!

And here companies actually have an advantage. Their core business isn’t in schools or hospitals, but they do know all about employing people, about providing jobs, and stimulating business.

And of course companies are doing this; they are providing direct employment and employment or vocational training to local communities.

The correlation between direct job creation and CSR is one of some debate, but companies that are creating jobs that pay a fair wage, with good working conditions and associated benefits, are
having a direct positive impact in communities.

But beyond this, and with potentially greater impact, some
companies are engaging in developing entrepreneurs and enterprise development through their supply chains (often called business “cocreation”).

Companies are helping small businesses start and flourish, making their produce part of their supply chain to improve the quantity, quality or security of their supply chain, and creating jobs and livelihoods in local communities.

One approach to this is called “value chain development”. This term has largely been used by the development community (including USAID and DfID) to des-cribe an approach to analyse markets, market dynamics, and to understand the role of the poor in those markets.

The approach then seeks to iden-tify what constraints there are to the growth of the end-to-end value chain (that is, from input providers to end consumers), and to the growth of the share of the poor in the value created.

But although this approach and terminology has arisen out of the development community, it is well suited to a CSR-led analysis of a company’s supply chain.

Companies can use this approach to explore where the poor and disadvantaged are already engaged in their own supply chain, and what constrains their ability to increase their produc-tivity, improve the value they capture for the work that they do, and improve their livelihoods.

Turning Theory into Reality

For some poor producers, it is simply a lack of knowledge and access to markets that limits their ability to provide appropriate products.

Working with producers (or producer groups) to help them understand market requirements (example, style, design, timing) and linking them to traders or processors can open up new markets, increase sales for the trader or processor, and improve the livelihoods of the producers.

Since 2001, Carrefour’s Spanish subsidiary has been working to support the inclusion of the poor throughout the developing world into their global supply chains.

One project in Ecuador had provided over 2,000 families with sustainable livelihoods through the production and export of innovative food products within one year of operation.

The new products have proved very popular with Spanish consumers, have been profitable for Carrefour, and have changed the lives of thousands of poor Ecuadorian farmers and their families. The Global CSR Casebook has a full case study on this titled ‘Business and Poverty’.

Often, poor agricultural producers lack basic knowledge about use of inputs (example, fertilizers), about product handling (example, for soft fruits), and about the requirements of processors or wholesalers.

Investing in the knowledge of the producers can improve the product provided up the supply/value chain to the company, whilst significantly increasing the incomes of the poor farmers.

In Pakistan, both Nestle Pakistan and Haleeb Foods Limited are working to strengthen the share of the poor in their milk value chains.

Nestle is working in animal husbandry with hundreds of thousands of farmers, with the aim that “better animals means there will be better milk. We gain a reliable supply of high quality milk, but the greatest benefits, both immediate and long-term, are to the farmers themselves,” as stated on Nestle’s website.

Haleeb is working on a new project to explore how they can strengthen the involvement of poor rural homebound women in the fresh milk collection, aiming to raise the incomes of 6,000 poor women.

This project, known as “Pathways and Pursestrings” is being undertaken in conjunction with Mennonite Economic Development Associates (Canada) and the Entrepreneurship and Community Development Institute (Pakistan) with support from the Canadian International Development Agency.

Summary

Whatever way you look at it, the poor want jobs. And companies have the skills and the oppor-tunities to create jobs. Companies have the opportunity (and some would say the responsibility) to work with the poor and disadvantaged in their own supply chains, to help them increase their livelihoods, and to stimulate job creation in their communities.

If companies really want to help the poor and disadvantaged, if they really want to positively impact the communities around them, then stimulating job creation in their supply chains and in the wider economy isn’t a bad place to start, in fact, it is the obvious place to make a
difference.

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