Adopted as a core business strategy, corporate social responsibility (CSR) improves company returns and efficiency, Tancred Tabone, president of the Malta Chamber of Commerce, Enterprise and Industry stated at a conference on this topic held at the Exchange Buildings in Valletta last week. Entitled Corporate Social Responsibility: Ensuring Business Benefits, the event was co-hosted by the Chamber and Bank of Valletta.

“For the past two years, Bank of Valletta and the Malta Chamber have teamed up on a project which promotes Responsible Entrepreneurship. Our aim is simple: to reach out to business and encourage them to take up similar related activities. Through CSR, we are ensured that business is conscious of the people and the environment in which we operate,” Mr Tabone stated.

“Giving back to society can be mutually beneficial and profitable. What we are promoting goes well beyond philanthropy; it is equally vital to ensure that our efforts make a real difference on a sustainable basis to all stakeholders and society. The Malta Chamber continuously strives to defeat the misconception that CSR initiatives are for big corporations.  We are convinced that they may be effectively designed and implemented in small companies. Small and medium-sized enterprises are closer to the community.”

Andre Fenech, Policy Development manager at the Chamber, added that “many SMEs are managed in a socially responsible way (at times unknowingly) − the owners’ ethical values often play a key role. However, (SMEs) do not communicate about their CSR activities and think that it is the exclusivity of bigger enterprises”.

“CSR delivers higher levels of customer satisfaction and loyalty, improved company brand and product reputation, more motivated and productive employees, better relations with the local community and public authorities as well as increased cost savings.” In his view, CSR should remain voluntary, non-regulated and business-driven with no additional specific reporting rules. Exchange of experiences and good practices among companies at local and EU level as well as with consumers and the public was important while communication should support commercially viable initiatives.

“Bank of Valletta has the largest and most developed and transparent CSR programme in Malta,” Charles Borg, its Chief Executive Officer told the audience.

BOV's CSR Road Map is updated annually, while a CSR Annual report is published alongside the annual company report and financial statements. Under its Community Programme, which has distributed €4.5m over the past five years, the bank gives back a defined percentage of its pre-tax profits to seven types of activity i.e. arts and culture; heritage; the environment; education; the social aspect; sports and support to business and professional associations.

According to Mr Borg, good corporate governance and staff relations, which include gender equality and flexitime, as well as the progressive introduction of energy efficiency and other “green” practices within all branches, are also related to CSR.

The bank's head of Public Relations and Social Media, Vanessa Macdonald warned that CSR had to be based on a long-term approach, avoid “no go” areas such as politics and religion, be aware of what might go wrong in a public event and publish a CSR report, even for internal use only. “It is important for staff to know that profit is not the only motivation,” she said.

A former Price Waterhouse Coopers senior partner, John Bonello, emphasised that “the prime responsibility of any business leader is to make a profit, to grow the business and to increase shareholder value.  The second is the need to always question the relevance of the subject to Maltese companies and how this is going to help us achieve the first objective (to make a profit).”

“CSR is often seen as a company’s programme to define and meet its obligations to society,  which is unfortunate and misses the point. Today, CSR is a fundamental pre-requisite for a company irrespective of its size, to make its business relevant and sustainable in today’s world – it is a corporate state of mind that weaves itself into the fabric of everything a company does. Corporate winners will be those that are governed properly and fairly and those that act responsibly. Large or small and yes, in Malta too.”

Ing. Adrian Vigar, manager, Environmental Health and Safety at Playmobil indicated that his company had issued its first CSR report last year. Seventy-four staff members had trained as First Aid responders, 63 as firefighters, while many paid regular visits to sick employees, hospitalised children and homes for the elderly. The company works closely with Inspire, the NGO supporting persons with disabilities as well as St Patrick's School, Wardija School and Puttinu Cares.

Employees have organised their own sports club, while the company gym is open to the public. Employees also host company visits from other firms to share best practices to facilitate benchmarking, while one-third have taken free self-development courses (in English, Maths and engineering skills) offered by the firm. A full-time doctor and nurse are on site with medical and educational support also extended to employees' children.

“CSR has not been plain sailing all the way,” Ing. Vigar cautioned, “but has engaged customer and improved branding and media interest, resulted in financial savings from energy and waste management, provided access to investment and funding opportunities like grants while generating creative thinking and knowledge sharing.”

Associates of Fenech and Fenech Advocates, Dr Nicolai Xuereb and Dr Ramona Azzopardi indicated that Purpose Foundations could serve as vehicles for CSR. Such foundations  were set up for a lawful purpose of a charitable or philanthropic nature without beneficiaries with a minimum endowment of  €232.94.

They can enrol with the Office for the Commissioner of Voluntary Organisations enabling them to make public collections, benefit from government or voluntary organisations fund grants and sponsorships, as well as from of any government policies supporting voluntary action, be a party to related contracts and attract a broad range of tax benefits.

Without the right to trade, such foundations can however derive income from donations, interest on fixed and savings accounts as well as investments, from the sale of assets, rents, sponsorships and fund-raising activities.