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Stakeholders bemoan CSR activities, effect on companies’ profit

…Companies lists CSR projects

By Princewill Ekwujuru

Stakeholders and concerned Nigerians have expressed dissatisfaction with corporate social spending by companies.

Despite the outburst, however, companies still embed corporate social responsibility, CSR, strategies in their businesses.

CSR is defined as a company’s sense of responsibility towards the community and environment in which it operates, expressed by contributing educational and social programs and by earning adequate returns on the employed resources.

Some stakeholders have claimed that CSR is reducing tax payment to government and dividend to shareholders. They also claim that the involvement of companies in CSR is a waste of resources, that not all CSR projects are relevant in some communities.

Some of the stakeholders said they withdrew their shareholding rights from some companies because amounts quoted on CSR in their annual reports are not commensurate with some projects done.

Stakeholders’ comments

A stakeholder who gave his name as Augustine Mabogunje, Managing Partner at Mazari Enterprises, Iteku Village, Lagos–Badagry Expressway, Lagos, who has shares in some Fast Consumer Moving Goods (FCMG) companies said: “CSR is affecting tax to government and shareholders’ dividends, by way of reducing their share dividend.

“The involvement of companies in CSR is a waste of government revenue, though good, but not all CSR projects are necessary in some communities. These are my personal opinion; any other person can have contrary view.”

Corroborating, another stakeholder, Babafemi Yusuf said CSR would have been a good way to complement government efforts on infrastructural development, but unfortunately this has been defeated. “I keep wondering why there are still many developmental project scattered all around if the companies are doing so much with the big amount quoted on CSR in annual reports,” he said.

Moses Nwaoboshi who withdrew his shareholding from a multinational company because of the free fall of stocks some years back, said the amount sometimes spent    by companies on CSR are not commensurate with  some projects.

Yemisi Aromole, who has a fashion outfit, and plies her trade along the LASU–Isheri expressway, said:    “Youth restiveness in communities would have been a thing of the past if companies do the right thing in communities where they operate. When you construct road where the people need water, it does not march.   That is a waste of fund and a misplaced priority on the part of the company or whosoever is involved.”

However, with the increasing number of multinational corporations in Nigeria such as those in oil and gas, aviation, FMCG and pharmaceutical industries, etc, CSR has become very relevant, especially in the new millennium.

Lately, there is focus on emerging economy like Nigeria, with companies operating in the country spending billions of naira on CSR.

In Nigeria, sustainability reporting has become a mainstream movement that companies  spend billions to support, yet it has its challenges as some stakeholders and Nigerians have become critical of the effect on companies’ profits.

Corporate Affairs Director of Guinness Nigeria, Viola Graham-Douglas said: “Through our   ‘Water for Life’ project, 22 water faculties were constructed in about 22 communities across 14 states of Nigeria which include Abi, Bekwarra, and Obanliku Local Government Areas of Cross River State, and Adigbe area in Abeokuta, Ogun state, along with the construction the Guinness Eye Hospital in Kaduna in 1963, Onitsha in 1984 and Lagos in 1992″

Chief Executive Officer, Aliko Dangote Foundation,   Zouera Youssoufou, said  the Foundation earmarked $1.25 billion to support good causes in education, health, economic empowerment and disaster, and have carried out good causes in some schools in Kano, Lagos as well as empowerment of women.

Director, Corporate Communications of Nigeria Bottling Company (NBC), Sade Morgan, said its water stewardship have seen “221 billion litres of water replenished through community and watershed projects across Nigeria.” She added that Coca cola empowered 1.7million women through its  women economic empowerment programme, 5 by 20 initiatives.

Nigeria Breweries, (NB) Plc through its Felix Ohiwere Education Foundation said it endowed about N100 million on education, adding that its Maltina Teacher’s competition gives N5million to the winner, in addition to international training course, construction of new classroom blocks at the school of winners.

In 2016, Shell Petroleum Development Company Operating Joint Venture, SPDCJV and SNEPCO invested $5.4billion on scholarship in the oil rich communities in Bayelsa state and others.

Mobil Producing Nigeria on its part reconstructed the Marine beach end of the Ajegunle boundary road in Ajeromi LGA, Lagos, among others.

In the same vein, Nestle Nigeria Plc said it committed N8.7 billion on CSR to youth and women empowerment and on health related issues.

The company said it also spent N5.88 billion on the construction of a water fountain for safe drinking water supply in Ade-Odo LGA, Ogun state and in various other parts of the country.

The company also committed N2 billion on product donation to Internally Displaced Persons (IDP) camps, in Maiduguri, Benue, Edo and other parts of the country where the camp exists in collaboration with the United Nations Co-coordinating office for Humanitarian affairs.

Expert speaks

Executive Director, CSR in Action, Bekeme Masade said: “The practice of CSR as a standard for firms and businesses to follow has evolved. This evolution has become necessary due to several problems that we face which have changed the environment under which firms operate. Some factors driving companies to pursue a CSR agenda are consistent across the corporate world while some are company or industry-specific.

“CSR is also becoming an important yardstick for investors before putting their resources in organizations because it demonstrates that the company takes keen interest in wider social issues that have no direct impact on profit margins and these issues may be local, national or global. However, a concern for the education, health and wellbeing of people and the environment are some of the most important markers that investors consider.

“Some of these criticisms can be levied only in the way it is often interpreted; narrowly, and reduced to a form of risk mitigation, compliance and “egocentric” philanthropy, or at how it gets instrumentalised as a new marketing technique, to build or protect a brand or corporate reputation. It is the result of these corporate scandals which have created lack of trust and because of that shareholders and stakeholders need more transparency.”


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.