The CSR challenge for developers
20/11/2006 The Star

THIS is the fifth article in the series of six fortnightly articles by the Real Estate and Housing Developers Association of Malaysia (REHDA).

The new buzzword in business circles these days is corporate social responsibility, more popularly and commonly referred to by its acronym, CSR.

There are probably many different notions and interpretations of what CSR is really about, with some thinking that it is another extension of doing charity, while others may focus more on form rather than substance.

So what exactly is CSR?

The universally accepted and applied concept of CSR is the ideal whereby business enterprises should integrate social and environmental concerns in their business operations, over and above what is ordinarily imposed by regulatory and legal requirements.

The essence of CSR is the voluntary engagement of business enterprises with their stakeholders to achieve sustainable development outcomes, and in the long run serve the interests of both business and stakeholders optimally.

Developers will do well to re-assess their longer term priorities with a view towards adopting CSR initiatives because companies that have embraced CSR have found real and significant competitive advantages in the form of improved financial performance, enhanced brand image and reputation, an increased ability to attract and retain quality workforce, more effective risk management, reduced long term cost, and greater attractiveness to increasingly sophisticated institutional investors.

CSR-friendly developments are very visible and are bound to attract more returns and increasingly educated buying communities.

All these will make CSR-enabled developers more competitive and enhance customer loyalty and confidence.

In any case, developers are in the best position to make a mark contribution towards CSR at the least costs and be more innovative in CSR activities, being the one undertaking the physical development and shaping the built environment of communities.

It won’t cost much to do a lot, and small steps taken in incorporating built-in CSR elements in one’s development will go a long way.

However, a huge impediment in trying to change property developers’ mindset towards voluntarily adopting CSR principles arises from the fact that, more than any other sector of the economy, developers have been labouring under the burden of numerous national social agenda requirements imposed on them, such as providing low cost housing and bumiputra housing quotas and discounts.

Most developers are probably of the view, rightly or wrongly, that this is their contribution to CSR, and that they have been doing it for decades.

This is not helped by authorities continuing to impose more and more environmental and social building conditions in housing development.

This is CSR forced down the throats of developers!

On the other hand, from the point of view of other stakeholders, especially the purchasers or clients, the perception is that developers have in fact only enriched themselves and have not really done quite enough for the community, environment or society.

In fact, more often than not, public opinion typifies developers as greedy and uncaring businessmen.

The chasm in perception cannot be more divided. This is where the CSR initiative can help to bridge the gap between the polarities of perception and build renewed trust and confidence between developers and purchasers, and the broader group of stakeholders.

Given the nascent appreciation of CSR in our country, there is a crying need for more awareness raising efforts to be undertaken to educate developers on what the CSR initiative is, and to encourage them to seriously adopt CSR principles in their business operations.

No matter whether they are undertaking big or small projects, all developers should play a proactive role in undertaking sustainable development.

They owe it to themselves, their stakeholders; the nation and future generations to ensure that the built environment harmonises with the natural environment and adopting CSR is the key to achieve this objective.

However, the communities must also do their part by making CSR programmes and activities initiated by developers sustainable by ensuring physical facilities built are properly maintained, utilised and not vandalised.

To build up the awareness and capacity for CSR-driven business practices will not be an easy task, especially among developers. But the first steps must be taken and efforts to educate and provide direction must intensify.

Towards this end, REHDA will use every available platform and, through its educational arm, REHDA Institute, work closely with its network of associates and industry partners to bring home the message of sustainable development for the benefit of all.

It is opportune to mention here that as we prepare to celebrate this year’s World Habitat Day this coming Saturday, Nov 25, where the theme is “Cities, Magnets of Hope”, we should be looking at more enduring ways to overcome problems resulting from rapid urbanisation.

Definitely, CSR is a most appropriate tool to open up the dialogue and stimulate the exchange of ideas on how, through sustainable development, our cities can become magnets of hope for the individual, the community and the nation.