corporate philanthropy in pakistankhan (co-chair) along with the causes and human development....

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Pakistan Centre for PhilanthropyPakistan Centre forPhilanthropy

Corporate Philanthropy

in Pakistan

An exploratory survey on the nature anddimensions of corporate giving in Pakistan

Pakistan Centre forPhilanthropy

Corporate Philanthropy

in Pakistan

An exploratory survey on the nature anddimensions of corporate giving in Pakistan

IFo r e w a r d

Any reproduction of this report without prior permission of PCP is discouraged.

Printed by Colorline Islamabad

Cover and design, desktop composition and production management:Pakistan Centre for Philanthropy, Islamabad

Published in December 2011

Foreword

It was a decade ago that a small group of In particular, PCP aims to increase the concerned citizens, representing the volume and effectiveness of giving by corporate sector, civil society and philanthropists whether as individuals or eminent persons, met to consider how the in the business sector, through evidence-daunting challenge of poverty alleviation based research and dissemination of best and human development can be met, by practise support services and policy exploring the possibilities of raising advocacy.i nd igenous r e sou r ce s t h rough philanthropy. They knew that Pakistanis Today, after documenting ten years of the were a generous society but what was not country's annual corporate giving, known at that time was the quantum of corporate philanthropy for 2010 is such giving by various segments of the recorded at PKR 3.3 billion as compared society. to the total figure of giving in 2009

recorded at Rs. 2.4 billion. A massive The formation of this group was based on fourteen fold increase is recorded from the findings of the ground breaking study the philanthropy of PKR 222 million by the Aga Khan Development Network documented in the survey's base year in the year 2000. The study emphasised (2000). Though the base year findings the huge potential of indigenous giving in revealed overwhelming participation by Pakistan that could be harnessed for the corporate sector towards the goal of social development. The obvious next social development at that point in time, question for this group was how to the rapid and volitional increase in the harness this massive giving in order to volume of contribution has far surpassed bridge the gap between available the expectations of even those who resources and the widespread need. strongly advocated an increase in Dialogues at a high level international corporate giving and its documentation conference on this subject in Islamabad in Pakistan.lead to the conclusion that an institutional approach was necessary for this to occur. Though a decrease of 10% percent in the It was in pursuance of this realisation that number of companies involved in giving the Pakistan Centre for Philanthropy was reflected in the survey findings (307 (PCP) was established in 2001. PCP's in 2009 to 276 in 2010), corporate specific objectives focus on increasing philanthropy increased from PKR 2.4 societal understanding of philanthropy billion to PKR 3.3 billion, marking an and building linkages between grant astounding increase of PKR 0.9 billion or makers and grant seekers, along with 37.5% in one year.promoting an enabling environment for citizen action.

Pakistan Centre for Philanthropy

Acknowledgements

This, the seventh annual Corporate Pakistan (SECP), for another year of Philanthropy survey, marks a decade of u n c o m p r o m i s e d s u p p o r t a n d surveys conducted by the PCP to cooperation in providing access to document the nature and dimensions of financial data of Public Listed Companies giving by the country's business sector. (PLCs). The collection of data, description The survey bears testimony to the tireless of analysis, layout and findings are the efforts of the PCP and its research team, result of meticulous efforts by the and also to the increasingly widespread Research Unit comprising Senior acceptance of the concept of corporate Research Officer - Syed Tariq Ali, giving by businesses. Programme Officer - Mr. Ali Shoaib,

Junior Programme Officer - Ms. Rabia The successful completion of this PCP Hasan and Junior Programme Officer - research endeavour is a collective effort Syed Hassan Sagheer.of many, with invaluable contributions from our highest policy making bodies, PCP also records its appreciation of down to the research unit that works in the organisations within the Pharmaceutical field to collect and compile data first Sector which were extremely supportive hand. PCP owes its gratitude to a number and had a vital role in contributing to the of people who made the successful qualitative survey of 2010. We also completion of this survey possible. acknowledge the co-operation of the Foremostly, PCP acknowledges and PLCs who verified the data and spared expresses gratitude to the Chairman of time for interviews. the Board, Dr. Shamsh Kassim Lakha and the entire Board of Directors for their As always, we remain optimistic that the assiduous support and encouragement. content and findings of this report will The Centre is also indebted to Mr. serve to inspire the corporate sector in Mahomed J. Jaffar, chair of the PCP's Pakistan to optimise their efforts geared Research Committee and Mr. Zaffar A. towards social giving for sustainable Khan (Co-Chair) along with the causes and human development.esteemed members, Mr. Badar F. Vellani, Mr. Mueen Afzal, Mian Ahsan M. Saleem, Dr. Attiya Inayatullah, Mr. Shoaib Sultan Khan and Mr. Hussain Dawood for their Dr. Anjum R. Haqueconstant guidance and perceptive input. Executive Director, PCP

The Centre extends its thanks to the Securities and Exchange Commission of

In the current survey report, we have PCP hopes that the findings of this survey gone a step further by profiling the will assist policy makers and PLC leaders Corporate Social Responsibility (CSR) to effectively utilise this remarkable initiatives of the top five winners in the philanthropic resource pool, and further category of giving by volume of direct these resources for the donations, and interviewing the senior development of social assets. To the most management level to better corporate sector, PCP recommends that understand how these initiatives are in developing future strategies for giving, developed and implemented and what corporations may give preference to are the dominant driving forces. over 200 Civil Society Organisations Additionally, as in previous years the (CSOs) that are certified by the Centre report provides a qualitative chapter on across the country. Over the years, this a specific business sector, which this year certification process has helped to foster reports on the giving trends of the trust in the certified CSOs and given pharmaceutical sector. The sector is them recognition by the government and contributing 0.8% of its Profit Before Tax the public for the transparency and towards philanthropic activity. effectiveness of their performance.

Finally, as always, the Centre welcomes Acknowledging the contribution of suggestions and advice from its Public Listed Companies (PLCs') towards s takeholders for s t rengthening community and social development, the corporate giving in Pakistan.Centre arranges an annual award ceremony where it honours star performers. Such awards, over the past years, have both recognised and motivated PLC captains to assume a stronger and wider role in social Dr. Shamsh Kassim-Lakha H.I., S.I.

development in the country. It is Chairman Board of Directors, PCPgratifying that these awards have become an eagerly awaited feature of the business calendar. The rankings presented in the current survey will form the basis for the Fifth Corporate Philanthropy Awards.

IIIA c k n o w l d g e m e n t s

Executive Summary“Corporate Philanthropy in Pakistan parts of our country with 2010, a survey of Public Listed i m m e n s e d e s p a i r a n d Companies” by the Pakistan Centre for hopelessness, Pakis tan 's Philanthropy (PCP), investigates the corporate sector was quick to philanthropic giving of Public Listed step in and provide a much Companies (PLCs) in Pakistan. It reaffirms needed support system where the idea that the business sector is alive to required. This increased the needs of the society, and that the sensitivity towards the idea of concept of being socially responsible is being recognised as socially becoming increasingly popular within the sensitive and responsible is business sector. In line with PCPs mission well-reflected by an increase in to increase the volume and effectiveness giving of PKR 0.9 billion over of philanthropy in Pakistan, the the course of a single year.Corporate Philanthropy Survey aims to recognise the efforts of the corporate Even in increasingly trying sector, and address any issues or economic times, and inflation obstacles the sector may be faced with, marring stifling rising costs, with regard to effective giving. PLCs philanthropy recorded an

increase of 37.5% from the The survey comprises a documentation of preceding year, marking 2010 philanthropy by Public Listed Companies, as Pakistan's corporate sector's estimates of its quantity, and a study of the most philanthropically active trends and patterns. The study also year to date. Giving was contains rankings of PLCs in terms of their recorded at PKR 3.3billion giving, and consequently facilitates the (Figure 1), and measured at “PCP Corporate Philanthropy Awards.” 0.8% of Profit Before Tax (PBT).

Though this indicates a As corporations begin to realise their true decrease of 0.1% from the potential to contribute towards societal previous year, the figure is still development, we discover increasing close to the 1% international amounts of philanthropy, being directed standard, and we remain towards sustainable ends, with preferred optimistic that this milestone areas for giving being health and will be achieved in the near education. As the floods inundated many future.

VE x e c u t i v e s u m m a r y

Some Key Findings 2010

1 As in the previous years, the corporate Exchange (KSE). The data was subsequently philanthropy awards are based on the validated through intensive communication rankings of top giving companies by with the companies. 'volume of donations' and by 'volume of donations as a percentage of Profit Before Chapter two details the ranking of PLCs by Tax'. The ten PLCs that emerged as the top volume of donations and by volume of givers for 2010 are listed below. donations as a percentage of Profit Before

Tax. It also takes into account the floods of Top 5 by Volume of Donations 2010, as well as, the economic 1. Pakistan Petroleum Limited environment prevailing in the country 2. Habib Bank Limited during the financial year 2010, and studies 3. Fauji Fertilizer Company Limited its subsequent impact on corporate giving. 4. Engro Corporation Limited5. Fauji Fertilizer Bin Qasim Limited Despite the difficult economic environment,

the PBT increased by 57% compared to the Top 5 according to percentage of Profit preceding year. Corporate givers continued Before Tax to contribute generously, with the total

donations amounting to a record level of 1. Karam Ceramics Limited PKR 3.3 billion, although there was a 2. Pakistan Services Limited decrease of 10 companies in the total 3. Diamond Industries Limited sample.4. Askari General Insurance Company5. Thatta Cement Company Limited Chapter three dwells on a new dimension of

this report, featuring a comprehensive The first chapter discusses the survey's qualitative analysis of the Pharmaceutical salient feature, the Annual PCP Corporate sector. The Pharmaceutical sector in Philanthropy Awards, and unfolds the Pakistan has a pivotal role to play in social methodology used for data collection, the development. As in most developing sample, and limitations of the survey. countries, Pakistan's disease burden is “Corporate Philanthropy in Pakistan 2010” excessively high, and unfortunately being a sequel, adopted the same research and development in the field of methodology as followed in the earlier health remains grossly under funded. This reports and provides details of donations by sector's giving practices have been 532 PLCs, extracted from their annual examined closely, with particular emphasis audited accounts, obtained from the on qualitative measures. The intent was to Securities Exchange Commission of gain a better understanding of the Pakistan (SECP) and Karachi Stock commitment to society within the sector, and

2

3

4

5

6

7

The number of companies with giving of PKR 100 million or more increased to 8, from 2 recorded in 2009

PLC contributions for 2010 measured at 0.8% of PBT, which is lesser than the donations of 0.9% of PBT recorded in 2009

2010 reflects the highest documented corporate philanthropy for a fiscal year

A 57% increase in total PBT yielded a 37.5% increase in giving

52% of PLCs were involved in corporate philanthropy, a decrease of 5% from the preceding year

Top 25 giving companies accounted for 80% of the total giving versus 73% in the preceding year

Total donations by PLCs increased more than fourteen-fold from PKR 228 million in 2000 to PKR 3.3 billion in 2010

276

277

290

329

299

283

287

282

268 263

t

52% 51%

54%

60%

54%

51%

51%

50%

49% 53%

Year 2010 2008 2007 2006 2005 2004 2003 2002 2001 2000

532 548 535 546 551 552 568 565 551 500

2009

307

57%

542

Number ofCompanies Giving

Total Sample

Percentage ofSample involvedin CorporatePhilanthropy

Total DonationsFigure 1

Giving trends by PLC’s 2000-2010Table 1

ContentsI. ForewordII. AcknowledgmentsIII Executive Summary

1. The SurveyPCP Corporate Philanthropy AwardsMethodologyQuntitativeQualitativeGender RepresentationThe SampleData CollectionLimitations

2. RankingsPhilanthropy and the Status QuoPercentage Philanthropy (Donations if taken as 1% of Profit Before Tax)Donations discounted with respect to Consumer Price IndexComparison with Previous YearsDonations by Top 25 Giving PLCsIndividual RankingsGiving by the Sub-Sectors

3. An Overview of a Sub-Sector; the Pharmaceutical Industry

4. Leader BoardThe PPL StoryThe HBL StoryThe Engro Story

5. Conclusion

iiiiiv

11223344

5678101115

17

25263134

39

to identify the role pharmaceuticals are corporate philanthropists are increasingly playing in furthering the sustainability devoting resources towards their social cause. The Public Listed Companies' responsibilities. However, it remains to be universe contains nine pharmaceutical noted that even within the top givers of the companies, with giving averaging at PKR corporate sector, the perception of roles 4.3 million per company. Additionally, three varies from entity to entity, as does the Private Listed Companies were also manner in which giving is organised and interviewed to represent the universe of planned. The purpose of profiling the top private listed pharmaceuticals. Total giving giving companies is to shed light on the by sample was PKR 39.6 million which various effective ways in which giving can stood at 0.8% of PBT. be planned and executed, to sustainable

development, furthered by successful The fourth chapter of this survey profiles top examples of the same methods. This year, givers for the year 2010. Pakistan's three out of the 5 top givers were corporate sector has experienced some interviewed while the management of Fauji major conceptual shifts over the course of Fertilizer Company Limited and Fauji the past decade. As the definition of Fertilizer Bin Qasim Limited were stakeholders continues to expand, unavailable for profiling.

01T h e s u r v e y

C O R P O R A T E P H I L A N T H R O P Y I N P A K I S T A N : S U R V E Y O F P U B L I C L I S T E D C O M P A N I E S

In line with its mission to increase the volume and Listed Companies (PLCs), and studies the trends effectiveness of philanthropy in Pakistan, PCP has and patterns that drive this giving. Also included in been annually documenting philanthropy by the the survey is a ranking of the top 25 companies in country's business sector since 2000. The terms of their giving programmes and practises. Corporate Philanthropy Survey comprises a This ranking consequently facilitates the PCP quantitative documentation of giving by Public Corporate Philanthropy Awards each year.

PCP Corporate Philanthropy Awards

Pursuing its philanthropy agenda, PCP annually second award ceremony was held in the Prime distributes the PCP Corporate Philanthropy Minister's House in June 2008, with Prime Minister Awards to acknowledge the contribution of the Yousuf Raza Gilani as the Chief Guest. The third corporate sector. PCP appreciates the endeavours award ceremony took place at the Sheraton Hotel of the corporate sector, supporting social causes in Karachi with the Finance Minister, Shaukat and community development. It is hoped that the Tareen, as the Chief Guest. The fourth ceremony awards will motivate companies to move forward, was held in Marriot Karachi, with Finance Minister with greater devotion, to meet the nation's social Dr. Abdul Hafeez Shaikh present as the chief guest. sustainability campaign. Following an annual In continuation of the tradition of extending ranking, the top giving companies are awarded recognition to the top corporate giving companies, on the basis of two criteria: i) volume of donations, the fifth award ceremony will be held in the last and ii) volume of donations as a percentage of quarter of 2011, and will be based on the rankings Profit Before Tax. presented in the 2010 survey.

The first awards were distributed by then Prime Minister Shaukat Aziz in January 2007 and the

Methodology

The methodology employed for this, the seventh largely unchanged. The quantitative approach annual Corporate Philanthropy Survey, remains continues to prevail over a larger part of the data

The Survey11

AcronymsAJK Azad Jammu and Kashmir

AKDN Aga khan Development Network

CEO Chief Executive Officer

Co. Company

CP Corporate Philanthropy

CPI Consumer Price Index

CSOs Civil Society Organisations

CSR Corporate Social Responsibility

GDP Gross Domestic Product

GoP Government of Pakistan

HBL Habib Bank Limited

KSE Karachi Stock Exchange

Ltd. Limited

NGOs Non-Governmental Organisations

PBT Profit Before Tax

PCA Petroleum Concession Agreement

PCPA PCP Corporate Philanthropy Award

PKR Pakistani Rupee

PLCs Public Listed Companies

PPL Pakistan Petroleum Limited

PPLWT Pakistan Petroleum Limited Welfare Trust

PPP Public Private Partnership

SECP Securities and Exchange Commission of Pakistan

SFH Sui Field Hospital

SMS&GC Sui Model School and Girls College

SMS Sui Model School

UnPLC Public Unlisted Companies

VSO Volunteer Service Overseas

03T h e s u r v e y


Breakdown of PLCs in sample by the financial year endTable 2

YEAR END NO. OF PLCS

MARCH

JUNE

SEPTEMBER

NOVEMBER

DECEMBER

TOTAL

4

387

56

1

84

532

% OF SAMPLE

0.8%

73%

11%

0.2%

16%

100%

collection process. The quantitative section of the always been extremely accommodating and survey continues to focus on the Public Listed staunch in their support to PCP's efforts and, Companies' (PLC) segment of the corporate therefore, the aforementioned data is easily made world, to maintain authenticity of data collected available to us. Direct verification of the data is also and compiled. This is possible because as per the made simple as the contacts for PLCs can be Securities and Exchange Commission of obtained from various reliable sources, including Pakistan's (SECP) regulations, all PLCs are the Karachi Stock Exchange address book that is required to submit their financial accounts at the uploaded on their website and accessible to the end of their financial year to SECP, and failure to public.comply leads to penalisation. The SECP has

Quantitative

At the very first stage of the study, an updated list of with the Karachi Stock Exchange library, another PLCs for the financial year is acquired from SECP source where complete records of PLCs are easily and crosschecked against the KSEs Daily accessible.Quotation as on 31st December of the year in question (2010). Following this, relevant data of It is important to note that emergency relief efforts the listed companies is compiled e.g. point of of the Corporate Sector, as a consequence of the contact and focal person. Working as a regulatory July 2010 floods, are not reflected in this years body for all PLCs in Pakistan, SECP has proven report as a majority of the sample operates with time and again, to be the most unequivocal June as the financial year end. The financial year source for obtaining financial information of end breakdown of the sample is given in the table PLCs. At the completion of the compilation stage, below.if there is any data missing, the Centre crosschecks

Qualitative

For this year's survey, an additional qualitative Such an undertaking, either ways, also assists in approach was employed to incorporate an in- deciphering the sector's potential for contribution depth analysis of philanthropy, with a specific towards the goal of sustainable society and human focus on the Pharmaceutical sector. The findings development.of this qualitative survey are presented in chapter four of the report. As a practise, the Centre, every This year, focusing on the Pharmaceutical sector year, selects a sub-sector of the economy and for the qualitative section of the study, the Public studies its giving practises to highlight the related Unlisted Companies, as well as the Private benefits and drawbacks prevalent in that sector. Companies sector were approached, in addition to

the Public Listed Companies. A majority of Private Association (PPMA) was acquired from the PPMA and Public Unlisted Companies did not respond, website. Following this, the SECP was approached but those that did were very accommodating and and requested to share financial information of contributed immensely to enrich the study companies in the list. Data of 6 companies was findings. available, all of which were sent questionnaires.

Only 3 of these responded resulting in a total A total of 15 companies (9 PLCs and 6 Private sample size of ten (7 PLCs, 3 Public Unlisted).Limited) were sent questionnaires, of which no contact could be established with 3, and another Once the 10 companies returned the 2 did not wish to participate in the survey. For questionnaires, they were visited and interviewed. companies outside the PLC universe, the selection Every possible effort was made by the Centre to process as follows. At the first stage, a list of explore the nature and dimensions of giving that members of the Central Executive Committee of existed in the Pharmaceutical Sector. the Pakistan Pharmaceutical Manufacturers'

Gender Representation

The concept of Gender Diversity on Boards is L is ted Companies, to ident i fy gender widely accepted at the global level. Stemming representation. Our findings reveal that women on from the idea that by starting at the top, diversity in boards (532 companies) stood at 348, a mere corporate culture can be instilled throughout the 10% of the total 3459 Directors on Boards. depth of an organisation, it is felt that a diverse Furthermore, to represent conclusively whether board wil l work to ensure maximum having women on the Board of Directors impacts representation. Certain studies also suggest that philanthropic practises in any manner, the top 25 organisations with women on their Board are giving companies' board structures were studied. often more sensitised to matters such as corporate This revealed a 3.3 % overall representation (7 ph i l an t h rop y and Co rpo ra t e Soc i a l women out of 213 Board Members), and zero Responsibility . percent presence of women in the top 5. These

figures prove statistically insignificant to draw Drawing from this conclusion, the Centre, this conclusions on any link between Corporate year, went a step further and collected data on the Philanthropy and gender representation on number of female Board Members in the Public Boards.

1

The Sample

As on 31st December 2010, 644 PLCs were listed (by the deadline of data collection). The remaining with the Karachi Stock Exchange. Of these, 23 532 companies, whose records were found from were open and closed mutual funds, and 89 were the available sources, comprise the final sample either suspended, not operational, or had failed for the survey. The list of PLCs was separated into to conduct their Annual General Meetings and 30 standard sub-sectors as set by KSE, to allow for publish their annual accounts for the year 2010, a more comprehensive analysis.

Bilimoria, D., McInerney–Lacombe, N. & Salipante, P. F. (2009). Championing the discussion of tough issues: how women corporate directors contribute to board deliberations. Women on Corporate Boards of Directors: International Research and Practice.

1

05


R a n k i n g s

Data Collection

The annual reports of PLCs contain their audited detailed questionnaires regarding their giving account statements for the financial years. For programmes. Based on the responses received, this survey, data collection began in February individual interviews, with selected companies, 2011 and continued till May 2011. SECP were conducted. A total of ten pharmaceuticals remained the primary source for data collection were interviewed, of which seven were Public Listed but the KSE library was also consulted to ensure Companies and three were Private Limited. The that all available reports were collected. Details basic aim of conducing the qualitative research documented include contact details, size and was: to enrich the quantitative surveys findings; to composition of Board of Directors, as well as, gather an in-depth understanding of particular relevant financial information such as the Profit giving programmes; and to better understand the Before Tax and donations. 'whys' and 'hows' of decision making and not just

the 'what', 'where' and 'when'. For the qualitative section of the report, the Pharmaceutical sector was selected and sent

Limitations

The process of collecting, compiling and be ambiguous without any descriptors provided. managing data and delivering the required results Though it is anticipated that this General Order will for the corporate philanthropy survey 2010 be reflected in future annual accounts of PLCs for presented its fair share of obstacles and 2010- 2011, it can be assumed that a large limitations. As stated, the sample for the amount of giving in the form of “time” and “in-quantitative survey consists only of Public Listed kind”, in the present survey, remains unaccounted Companies, which represents a small part of the for. existing large corporate sector.

The details of SECP's SRO are as follows:Constraints such as limited financial, human and time resources did not allow for expanding this Obligations under the law- (1) Every company shall sample base. For this reason, limiting research to provide descriptive as well as monetary disclosures the most organised sub-sector of the corporate of the Corporate Social Responsibility activities world was deliberate to ensure accuracy of undertaken by it during each financial year. information presented, including source reliability and data authenticity and validity. (2) Such disclosures shall be made in the directors'

report to the shareholders annexed to the annual Despite the issuance of the Companies audited accounts. The disclosure of such activities (Corporate Social Responsibility) General Order will be in addition to the disclosure requirements (statutory notification) by the SECP in late 2009, already mentioned in the Ordinance. disclosures in PLC accounts for 2010 continued to

2

Rankings22

The annual Corporate Philanthropy Survey ranks the sheer size of their donation. In the second PLCs on the basis of two criteria mentioned below: category, the companies that donate a bigger

percent chunk of their PBT are being vBy total volume of donations recognised for their generosity and

commitment to development.vBy volume of donations as a percentage of

Profit Before Tax (PBT) Due to the growing interest towards corporate philanthropy, some companies now have a

The larger companies with bigger revenues sepa ra t e depa r tmen t w i t h i n t he i r and/or PBT are able to donate larger amounts. organisations, which is responsible for These companies are being recognised for the philanthropic and other CSR activities. impact their donations make on society based on

v

Philanthropy and the Status Quo 2009-10

To understand and appreciate Pakistan's It is heartening to note that despite the difficult corporate philanthropy for the year 2010, it is economic environment, size of corporate useful to keep in mind the economic climate of the philanthropy increased. country during this period. Floods, energy crises and internal security issues continued to impact On the philanthropic front, corporate givers productivity and business sentiment. The real continued to contribute generously. As seen in Gross Domestic Product (GDP) growth of 3.8% Table 3, the total giving, for the year 2010, that was recorded in 2009-10 declined to 2.4% in amounted to PKR 3.3 billion, exceeding the 2010-11, whereas inflation as measured by highest recorded amount so far, (it stood at PKR Consumer Price Index (CPI) increased from 11.7% 2.4 billion in the preceding year), despite the fact in 2009-10 to 13.7% in 2010-11. Other key that the number of giving companies within the economic indicators were also mostly depressed sample in 2010 decreased by 5% compared to the barring a few areas such as exports and worker preceding year (57% versus 52%).remittances, where improvements were recorded.

Statutory Notifications (S.R.O), Securities and Exchange Commission of Pakistan, NOTIFICATION, Islamabad, the November 16, 2009, S.R.O. 983(I)/2009.

2

07


R a n k i n g s

Number of PLCs involved in corporate philanthropy (CP)Table 3

YEAR

NUMBER OF COMPANIES GIVING

TOTAL SAMPLE

% OF SAMPLE INVOLVED IN CP

2002

282

565

50

2003

287

568

51

2004

283

552

51

2005

299

551

54

2006

329

546

60

2007

290

535

54

277

548

51

20082009

307

542

57

2001

268

551

49

2000

263

500

53

2010

276

532

52

As seen in Table 3, the total sample of the PLCs also responsibility of contributing towards social uplift. decreased from 542 to 532 in 2010. A total of 276 Thus, despite the numerous setbacks that impacted companies gave as compared to 307 in the previous the financial performance of the corporate sector, year. This is mainly due to reduced economic activity in philanthropic efforts continued and the giving the country during the year 2009-2010. generated displays the immense resilience that

exists within the sector regarding responsibility The rise in philanthropy, despite a decrease in the towards society and sustainable development. number of companies involved in giving, shows that an Giving for 2010 increased by PKR 0.9 billion, which increasing number of organisations are accepting their is a 37.5% increase compared to that of last year.

Percentage Philanthropy (Donations if taken as 1% of Profit before Tax)

The need for CSR to take root in our corporate and dissatisfaction. culture is all the more acute, given the prevailing economic and social conditions of An alternative approach to be considered by the

3Pakistan . The idea of percentage philanthropy, Government is identifying areas where the need which dates back to the 19th century, was is greatest, measuring the need and making initially designed as a law enacted to impose these statistics and project details available to the compulsory tax on individuals to finance state private sector firms, so that they may choose determined objectives that were in the interest of where they want to contribute.

4the public . There are, however, various view As presented in the following table, companies points about making CSR mandatory with the faced financial downturns in their PBT from 2005 application of a 1% law or similar measures. to 2007. However, the volume of donations rose Those in favour believe that many a times, significantly showing a negative correlation. It is enforcing a law is necessary to implement and important to also note that though giving is less accomplish certain objectives. However a vast than the 0.9% of the PBT mark it had reached in majority feel that the government should not the preceding year, it still holds close to the best formally pass a law for corporate philanthropy, practice standard of 1%, at 0.8%, for 2010.but instead all companies should work

independently towards formalising their own Table 4 provides juxtaposed figures, resulting CSR structures, document their philanthropic from a hypothetical scenario, in which, all efforts more efficiently, and perhaps even set companies donated 1% of PBT. Whereas Figure goals similar to the 1% of PBT mark for 2, portrays the actual giving from 2000 to 2010, themselves. This is mainly because as well as, giving at 1% with respect to the total philanthropy, in its true essence, is meant to be PBT of all PLCs over the same time frame. If the voluntary, and the moment allocations to companies had donated according to the 1% of sustainable societal causes are made PBT formula, the total giving would have been compulsory, the act is not philanthropic in approximately PKR 4.1 billion for the year 2010. nature. Further, imposing such measures upon

the corporate sector may result in resistance

Donations if taken as 1% of Profit Before Tax (PBT) Table 4

YEAR

PKR Million

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

TOTAL

TOTAL PBT TOTAL DONATIONS PERCENTAGEDONATIONS AS

1% OF TOTAL PBT

365

882

1,503

1,726

11,776

4,840

3,630

2331

3,508

2,620

4,111

37,291

228

277

336

496

653

1,608

2,330

1,865

2,239

2,352

3,269

15,653

0.6%

0.3%

0.2%

0.3%

0.1%

0.3%

0.6%

0.8%

0.6%

0.9%

0.8%

0.4%

36,477

88,166

150,349

172,626

1,177,586

484,001

362,968

233,141

350,807

261,964

411,051

3,729,137

Consumer Price Index (CPI), inflation adjusted, the volume of philanthropy increased by over six fold from the base year to the current reporting year.

Donations discounted with respect toConsumer Price Index

Corporate Social Responsibility – An Outline for Companies in Pakistan By Mahomed J. Jaffer & Syed Bulent Sohail, Orr, Dignam & Co.

Percentage Law Explained, Percentage philanthropy and law, Nilda Bullai, NIOK and ECNL,2004

3

34

Total Donations and Donations if Taken as 1% ofPBT (2000-10)Figure 2

09R a n k i n g s


In order to present a clearer picture of the trends Table 4i segregates giving companies into and patterns established for 2010, a comparison categories based on the size of donations to of the same is made with the results obtained for estimate the change in the range of cash the preceding ten years. The comparative analysis contributions by the PLCs' universe. Table 4ii helps clearly shows the varying trends of the changing to further study the percentage changes between philanthropic climate in Pakistan. Table 4 shows the current year, the preceding year and the base the amount of donations for the years 2000- year.2010 to get a clear picture of the overall development in corporate philanthropy in Pakistan. As clearly seen, in Table 4, total donations in 2010 are at a record high of PKR 3.3 billion.

Comparison with previous years Base Year (2000)

Since PCP began its Corporate Philanthropy number of companies giving more than or equal to Survey (in the year 2000) a base year comparison PKR 4 and less than 5 million. is essentially carried out to enable us to determine the overall change in corporate philanthropy. While companies giving large amounts of Comparative analysis between the base year and donations are steadily increasing, those giving 2010 shows a vast growth in giving. smaller amounts are declining. There is a decline

of 43% in the number of PLCs giving less than PKR As shown in Table 4ii, it is evident that in the 0.5 million from the base year, and this portrays ranges of giving greater than PKR 2 million, the that an increasing number of corporate entities are increase in the number of giving companies has adopting corporate philanthropy, by switching over been phenomenal. An astounding increase of to the categories of higher giving, thus making it an 900% from the base year was recorded in the integral part of their CSR strategies.

Preceding year (2009)

Table 4ii demonstrates philanthropic trends and showing a 9% decrease. There was a 64% increase variations between the years 2009 and 2010. in number, from 11 in 2009 to 18 in 2010, for Although, the total number of PLCs that gave PLC's with a volume of giving between PKR 3 and 4 decreased to 532 from 542, the breakup, in million. This clearly shows a growth in the giving terms of the size of donations, reveals diverse trends of the companies. The number of trends. companies in the giving category of above PKR 0.5

and below 1 million fell by 33% from 42 in 2009 to In the category of giving above PKR 5 million, it is 28 in 2010. The category of companies with zero observed that the total number of giving giving experienced no change in percentage. companies was 59 compared to 65 in 2009,

Table 5 shows a breakdown of companies giving companies, giving more than PKR 100 million, PKR 5 million or more. Overall there is decrease changed from 2 to 8, an increase of 300%. in the number of companies giving, from a total of However, there is a significant decrease in the PLCs 65 in 2009 to 59 in 2010. However, figures in donating between PKR 5 to 10 million. The figure each category by volume of giving show that of dropped to 17 as compared to 25 in the preceding these 59, 28 are giving between the amounts of year. PKR 10 and 50 million. The number of

PLC's by Spread of Donations 2010 ShowingPercentage Change with Previous Year and Base YearTable 4ii

MORE THAN OR EQUAL TO 5 MILLION

MORE THAN OR EQUAL TO 4 AND LESS THAN 5 MILLION




MORE THAN OR EQUAL TO 0.5 AND LESS THAN 1 MILLION

MORE THAN ZERO AND LESS THAN 0.5 MILLION

ZERO

-9

11

64

-5

-20

-33

-8

-13

392

900

260

600

45

-3

-43

8

Number of Companies by Year and Category

CATEGORY BY SIZE OF DONATION (PKR MILLION)

% CHANGE WITH PRECEDING YEAR (2009)

% CHANGE WITH BASE YEAR 2000

PLCs by spread of donations (2000-2010) Table 4i

CATEGORY BY SIZE OF DONATION (PKR MILLION)






MORE THAN OR EQUAL TO 0.5 AND LESS THAN 1 MILLION

MORE THAN ZERO AND LESS THAN 0.5 MILLION

ZERO

TOTAL

Number of Companies by Year and Category

63

11

14

14

21

26

149

253

551

2005

31

10

3

14

21

33

170

270

552

2004

26

4

6

8

33

35

175

283

568

2003

16

3

6

13

18

32

194

283

565

2002

16

4

3

6

14

34

191

283

551

2001

12

1

5

3

22

29

191

237

500

2000

71

8

12

16

35

47

140

217

546

2006

48

11

11

17

29

25

149

246

535

2007

47

6

9

16

31

27

141

271

548

2008 2010

59

10

18

21

32

28

108

256

532

2009

65

9

11

22

40

42

118

235

542

PLCs Giving PKR 5 Million or MoreTable 5

CATEGORY





TOTAL

8

6

28

17

59

2010

3

7

30

25

65

2009

11


R a n k i n g s

Donations by Top 25 PLCs Table 6

YEAR

TOTAL DONATIONS BY TOP 25 PLCS (PKR MILLION)

AVERAGE DONATIONS BY TOP 25 PLCS (PKR MILLION)

CONTRIBUTION OF TOP 25 PLCS (AS A % OF TOTAL GIVING)

OTHERS (AS A % OF TOTAL GIVING)

2005

1087.4

43.5

68

32

2003

344.3

13.8

61

39

2004

482.3

18.3

70

30

2002

235.9

9.4

42

58

2001

201.4

8.1

37

63

2000

158.4

6.3

32

68

1,470.7

59.5

79

21

2007

1709.5

68.4

73

27

2006

1875

75

84

16

2008

Donations by Top 25 Giving PLCsThe collective data of 25 companies that ranked This is consequent to a dramatic increase of highest in terms of volume of giving since the base 51.5%, from last year's total giving, by the top 25 year are shown in Table 6. The Table provides PLCs, from PKR 1,721 million to PKR 2,608 million information on what the average giving was for (Table 6). Figure 4 gives a pictorial presentation of each of the top 25 PLCs. Figure 3 presents a pie total donations for the past decade, and for the chart which highlights the proportion of total year 2010, by the top 25.giving by the top 25 companies. As seen, the contribution amounted to striking 80% in 2010.

2,608

104.3

80

20

2010

Percentage contribution of Top 25 Giving PLC's 2010 Figure 3

1721.3

68.9

73

27

2009

Donations of top 25 giving PLCs by volumeFigure 4

The top 25 giving companies were identified for to PKR 519.1 million. Habib Bank Limited achieved 2010 on the basis of two pre-determined criteria; the second position, with donations of PKR 395.2 i) the total volume of donations, and ii) the million. Fauji Fertilizer Company Limited earned volume of donations as a percentage of Profit the third spot having donated PKR 255 million in Before Tax (PBT). A clear summary of rankings by 2010.total volume of donations is presented in Table 7.

Pakistan Petroleum Limited once again topped the rankings in 2010, with donations amounting

Individual ranking

13


R a n k i n g s

Table 7 Top 25 PLCs by volume of donations (2010)

PKR Million

COMPANY PBT DONATIONSRANK

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

519.1

395.2

255.0

136.0

131.0

125.8

121.1

104.1

87.2

86.0

82.3

77.4

63.7

63.5

42.6

41.0

38.3

35.9

35.5

31.3

30.7

27.9

27.3

25.7

25.2

2,608.8

34,528

25,057

16,310

8,277

9,686

605

24,415

3,418

5,696

1,273

17,742

5,656

4,780

1,369

1,418

1,952

12,343

4,026

6,712

1,578

3,044

610

320

1932

1,359

194,107

PAKISTAN PETROLEUM LIMITED

HABIB BANK LIMITED

FAUJI FERTILIZER COMPANY LIMITED

ENGRO CORPORATION LIMITED (FORMERLY ENGRO CHEMICALS)

FAUJI FERTILIZER BIN QASIM LIMITED

PAKISTAN SERVICES LIMITED

NATIONAL BANK OF PAKISTAN

LUCKY CEMENT

NESTLE PAKISTAN LIMITED

ASKARI BANK LIMITED

UNITED BANK LIMITED

BANK AL-HABIB

UNILEVER PAKISTAN LIMITED

BANK ALFALAH LIMITED

PAKISTAN TOBACCO COMPANY LIMITED

J.D.W. SUGAR MILLS LIMITED

ALLIED BANK LIMITED

HABIB METROPOLITAN BANK LIMITED

LOTTE PAKISTAN PTA LIMITED

SIEMENS (PAKISTAN) ENGINEERING COMPANY LIMITED

SHELL PAKISTAN LIMITED

SITARA CHEMICAL INDUSTRIES LIMITED

SHIFA INTERNATIONAL HOSPITALS LIMITED

GLAXOSMITHKLINE PAKISTAN LIMITED

INTERNATIONAL INDUSTRIES LIMITED

TOTAL

Table 8 Top 25 PLCs by Volume of Donations (2009)

PKR Million


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

522.0

118.5

103. 0

97.3

80.2

75.9

71.8

56.0

55.7

51.7

49.8

48.2

43.5

40.4

34.5

33.9

33.2

31.1

27.3

27.1

25.5

25.2

25.0

22.5

22.1

41,908

5,214

22,300

10,536

4,186

-102

4,512

14,035

4,516

14,021

-11,357

19,486

-1,454

-15,451

2,046

5,808

988

4,214

760

3,910

3,781

1,205

23,155

-918

1,266

PAKISTAN PETROLEUM LTD

ENGRO CORPORATION LTD (FORMERLY ENGRO CHEMICALS)

NATIONAL BANK OF PAKISTAN

ALLIED BANK LIMITED

NESTLE PAKISTAN LIMITED

PAKISTAN SERVICES LTD

BANK AL-HABIB LIMITED

UNITED BANK LIMITED

UNILEVER PAKISTAN LTD & SUBSIDIARY COMPANIES

PAKISTAN TELECOMMUNICATION COMPANY LIMITED

PAKISTAN STATE OIL

HABIB BANK LIMITED

KOHINOOR TEXTILES

KARACHI ELECTRIC SUPPLY CORPORATION LIMITED

INDUS MOTOR COMPANY LIMITED

FAUJI FERTILIZER BIN QASIM LIMITED


HABIB METROPOLITAN BANK (FORMERLY METROPOLITAN BANK)


SHELL PAKISTAN LIMITED

HUBCO POWER

BESTWAY CEMENT LIMITED

MCB BANK

MAPLE LEAF CEMENT

STANDARD CHARTERED BANK PAKISTAN LTD

The top 25 PLCs from 2009 are also given in Table 8, to allow for comparison in the volume of giving category.

Table 9 represents companies based on their aggregate aggregate amount of their donations is not large, the giving as a percentage of their Profit Before Tax. This giving to PBT ratio far exceeds that of larger companies. methodology helps us get a clear picture of organisations irrespective of the scale of their This recognition of efforts is the Centre's way of showing operations. It is observed that there are a number of appreciation to the entire corporate sector for their smaller companies that give generously. Although, the contribution to social development and progress.

15


R a n k i n g s

Table 9

PKR Million


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

2.9

125.8

0.6

5.0

0.2

27.3

3.2

1.2

86.0

0.0

6.9

2.7

3.0

63.5

27.9

0.1

4.9

3.9

18.0

0.6

7.6

18.3

4.0

104.0

42.6

12.7

605.1

5.3

53.3

1.8

320.5

37.7

16.7

1,273.1

0.5

123.0

50.6

64.3

1,368.7

610.0

2.9

133.4

106.9

542.0

20.0

234.6

597.5

132.1

3,417.5

1,418.0

KARAM CERAMICS LIMITED

PAKISTAN SERVICES LIMITED

DIAMOND INDUSTRIES LIMITED

ASKARI GENERAL INSURANCE COMPANY LIMITED

THATTA CEMENT COMPANY LIMITED


KHAIRPUR SUGAR MILLS LIMITED

FIRST PARAMOUNT MODARABA

ASKARI BANK LIMITED

LEINER PAK GELATINE LIMITED

N.P. SPINNING MILLS LIMITED

GHANI VALUE GLASS LIMITED

METROPOLITAN STEEL CORPORATION LIMITED

BANK ALFALAH LIMITED


SERVICE INDUSTRIES TEXTILES LIMITED

AMERICAN LIFE INSURANCE COMPANY (PAKISTAN) LIMITED

SITARA ENERGY LIMITED

LIBERTY MILLS LIMITED

DADEX ETERNIT

THE THAL INDUSTRIES CORPORATION LIMITED

CRESCENT STEEL & ALLIED PRODUCTS LIMITED

ITTEHAD CHEMICALS LIMITED

LUCKY CEMENT

PAKISTAN TOBACCO COMPANY LIMITED

% OF PBT

23.0

20.8

11.0

9.4

8.8

8.5

8.4

6.9

6.8

5.7

5.6

5.4

4.7

4.6

4.6

4.4

3.7

3.6

3.3

3.2

3.2

3.1

3.1

3.0

3.0

Top 25 PLCs by Volume of Donations as % of PBT (2010)

Table 10

COMPANY PBT DONATIONS

Top 25 PLCs by volume of donations as % of PBT (2009)

PKR Million

RANK

N. P. SPINNING MILLS LIMITED

HIGHNOON LABS

ELLCOT SPINNING MILLS LIMITED

BANNU WOOLLEN MILLS LIMITED

CRESCENT JUTE PRODUCTS LIMITED


SHIELD CORPORATION LIMITED

HARUM TEXTILE MILLS LIMITED

KHAIRPUR SUGAR MILLS LIMITED

KOHAT CEMENT COMPANY LIMITED

HINOPAK MOTORS

KARAM CERAMICES

PREMIER INSURANCE CO. LIMITED

NAGINA COTTON MILLS LIMITED

FIRST PARAMOUNT MODARABA

SITARA ENERGY LIMITED

PAKISTAN INTERNATIONAL CONTAINER TERMINAL LIMITED

INTERNATIONAL INDUSTRIES LIMITED


PARAMOUNT SPINNING MILLS LIMITED


FAZAL CLOTH MILLS LIMITED

GULISTAN SPINNING MILLS LIMITED

MITCHELL'S FRUIT FARMS LIMITED

SONERI BANK

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

4.0

20.8

1.0

1.3

0.6

20.0

1.1

0.5

2.2

1.7

7.2

0.8

4.8

0.9

1.1

4.1

10.8

20.0

27.3

1.2

33.2

6.0

0.6

0.6

5.8

10.1

101.8

5.3

9.7

5.1

207.1

11.9

5.4

25.1

21.2

115.8

13.2

79.7

14.7

20.1

80.3

238.8

468.8

759.9

35.4

987.9

179.5

20.7

18.5

190.4

% OF PBT

39.5

20.4

19.0

13.0

12.2

9.7

9.5

9.2

8.8

8.1

6.2

6.1

6.0

5.8

5.6

5.1

4.5

4.3

3.6

3.5

3.4

3.3

3.1

3.1

3.1

Giving by sub-sectors (Table 11) shows the giving by 30 each sector would provide inaccurate results. For this sub-sectors identified by KSE. It also presents the average reason, sector-wise ranking is presented, taking the of giving per company within each of these sub-sectors. average donation by companies within each sector. The Since the number of firms within each of these sectors results are presented in the following table. varies greatly, comparing the total volume of donations of

Giving by the sub-sectors

(Table 10 are also presented, to allow for comparison in giving percentage and volume with the preceding year)The top three positions in the above mentioned category its giving measuring at 20.8% of the PBT; and the third are as follows: Karam Ceramics Limited earns the top spot place is occupied by Diamond Industries Limited with with donations amounting to a generous 23% of PBT; donations amounting to 11% of PBT. Pakistan Services Limited falls in the second position, with


O v e r v i e w 17

The pharmaceutical industry in Pakistan has A large number of pharmaceuticals operate progressed leaps and bounds since 1947, when worldwide, and for these in particular, there were hardly any pharmaceuticals in the sustainability is increasingly presenting itself as a country. Today, there are over 400 manufacturing global responsibility. As the stakeholder universe units that are operational country-wide. continues to expand, to encompass different

representatives of society, so does the enormity of According to the Pakistan Pharmaceutical the task, to take into consideration all these Manufacturers Association (PPMA), the industry is actors. For the most part, social and business currently meeting 70% of the country's demand benefits of any CSR activity are often long-term or for f in ished medicine. (PPMA is the intangible, and this makes the efficient pharmaceutical sectors Government approved measurement, to show activities as cost-effective, Regulatory Body, and has been in operation since and value-enhancing, difficult. Other social 1961. challenges like inadequate infrastructure, scarcity The PPMA focuses its energy to ensuring that all its of basic necessities, dearth of health services, members possess the requisite facilities necessary inter alia, exacerbate the situation. Pakistan for the production of pharmaceuticals of quality, represents such a case in point. Consequently, the and comply with current good manufacturing need for long term, cost effective sustainable practices (CGMP) standards). solutions has made its way into the business

strategy of the majority of these companies. The pharmaceutical sector’s social responsibility However, one of the most important contributions agenda is one that is often put into question, of the pharmaceutical sector to society is the particularly in the developing world, and this research and development of new health report presents the sectors own take on solutions, despite the substantial economic risks. sustainability and their role in the society. Per se, the sector's giving practices have been examined In their report titled Beyond Philanthropy, to gain an insight into their commitment to social Bluestone, Heaton and Lewis point out that “Every responsibility with particular focus on qualitative year, infectious diseases kill 14 million people. measures. Most of these deaths are of poor people living in

An Overview Qualitative Review – The PharmaceuticalSector

33Sub-sector giving (2010) Table 11

SECTOR

Number of Companies by Category

NUMBER

OF COMPANIES

PKR Million

AVG. DONATIONS

BY SUB-SECTOR

(PER FIRM)

RANKING BY

AVG. DONATIONS

12

23

4

1

32

3

6

2

2

10

11

50

31

9

16

14

4

19

211

5

3

9

25

1

3

3

3

17

1

2

48.4

42.3

32.7

27.3

20.8

14.9

7.9

6.5

6.1

5.9

5.6

4.8

4.3

4.3

2.7

2.4

2

1.5

0.8

0.8

0.2

0.2

0.2

0.2

0.1

0.1

0.1

0.1

0

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

OIL AND GAS

BANKS

TRAVEL AND LEISURE

HEALTHCARE EQUIPMENT AND SERVICES

CHEMICALS

TOBACCO

INDUSTRIAL METALS AND MINING

INDUSTRIAL TRANSPORTATION

GAS WATER AND MULTI UTILITIES

INDUSTRIAL ENGINEERING

GENERAL INDUSTRIALS

FOOD PRODUCERS

CONSTRUCTION AND MATERIALS

PHARMA AND BIOTECH

AUTOMOBILE AND PARTS

ELECTRICITY

LIFE INSURANCE

NON LIFE INSURANCE

PERSONAL GOODS

FIXED LINE TELECOMMUNICATION

BEVERAGES

HOUSEHOLD GOODS

FINANCIAL SERVICES

SOFTWARE AND COMPUTER SERVICES

FORESTRY AND PAPER

ELECTRONIC AND ELECTRICAL EQUIPMENT

MEDIA

EQUITY INVESTMENT INSTRUMENTS

LEISURE GOODS

REAL ESTATE INVESTMENT AND SERVICES


O v e r v i e w 19

developing countries, particularly children developing countries' health systems. under the age of five. The majority of these Further, as opposed to the widespread diseases are preventable or easily notion, the pharmaceutical sector, given treatable.” They further state that “the the nature of its produce, should neither be pharmaceutical industry has a role to play held solely responsible nor should it be in ensuring that its policies and practices judged on the basis of its potential to support the fight for health in the contribute towards social development. developing world, particularly in those And that, each and every other stakeholder countries with acute shortages of resources bears an equal responsibility toward CSR and poor infrastructure.” Oxfam, Save the and human development. Chidren and VSO, on the other hand, also maintain that the pharmaceutical industry in not entirely responsible for building

Pakistan's Pharma in Focus

The National Pharmaceutical Industry in All nine of the PLCs were sent Pakistan today is an illustrative case in questionnaires and requested to give the point, providing essential drugs at Centre some time for carrying out affordable prices to millions without individual in-depth interviews in order to compromising on quality. This is made gain insight to their giving programmes. Of possible as a consequent of the industry's these, seven responded positively and were conscious and active role in promoting and included in the qualitative study.sustaining development.

Likewise, a total of six pharmaceuticals, On December 31st 2010, there were nine outside of Public Listed Companies, were companies listed under the category of approached. Of these, three declined, 'Pharmaceuticals and Biotech' with the further cutting the intended sample size Karachi Stock Exchange. Additionally, two envisioned by the Centre. Hence, our total hundred and forty companies (comprising sample size of the Pharmaceutical industry, certain Public Listed Companies, and for this study, is ten, comprising 70% PLCs including Private Limited and Public and 30% Unlisted Companies. The Unlisted Companies) were listed as aggregated information of these two members of the 'Pakistan Pharmaceutical categories reveals that the in-cash Manufacturers Association'. However, contributions by the Unlisted Companies there are still a large number of constitutes only about 2% of the total pharmaceuticals that are not listed as PLCs donations by Pharmaceuticals as illustrated or a member of the PPMA and, therefore, it in the following Figure 5.is not possible to accurately determine the size of the pharmaceutical Industry in Pakistan.

Analysis

The sample findings show that the average pharmaceutical industry maintained that the revenue of the sector was PKR 4,106 million per unfavourable environment is impairing their organisation, with an average Profit Before Tax of growth and ability to do more. PKR 436 million. The average philanthropic contribution by each pharmaceutical was found The overall philanthropy generated by the to be PKR 3.3 million. The sector was, therefore, Pharmaceuticals in 2010 amounted to PKR 39.6 contributing 0.8 % of its PBT to philanthropic million, showing a decrease of PKR 6.5 million, causes in cash contributions alone. from the preceding year, when the total was PKR

46 million. The following Figure 6 presents the This is an appreciable figure, as the breakdown of the change in pharmaceutical pharmaceutical sector faced more than its share giving from the year 2009 to 2010. Figures show of difficulties, aside from being under scrutiny for that 42% of the companies increased giving, 33% monopolising products that are considered decreased and 25% marked no change during essential necessities, often lifesaving. The this time period.

Beyond Philanthropy: Ken Bluestone, VSO; Annie Heaton, Save the Children UK; Christopher Lewis, Oxfam GB.

5

Composition of GivingFigure 5

Giving by PLCs: PKR 38.6

Giving by Unlisted: PKR 1.0


O v e r v i e w 21

Interestingly, despite the fact that 67% of the compared to PKR 3.8 million in 2009 (Figure 7). companies either increased giving or maintained Total PBT in 2010 (PKR 5.2 billion) was 1.5 billion its volume, the overall total giving exhibited a more than in 2009 (PKR 3.7 billion). downward trend in 2010 as compared to 2009. Likewise, the average giving per company in 2010 was also lower, totalling PKR 3.3 million

As part of the qualitative survey, companies were Overall the Philanthropic goal for all the asked to expatiate on what they felt was the most companies (100% of the sample) was to optimise appropriate role of a private sector firm in solving efforts towards serving the community along with the social problems that were important to their a strong desire to be recognised as the 'caring business. Of the total, 80% said that every corporate citizen'. Equally so, each company felt organisation should be part of the solution i.e. that they bore the responsibility of making collaborate in problem-solving without seeking a Pakistan a healthier society. leadership role. While the remaining 20% felt that they should assume a leadership while taking As the Managing Director of one pharmaceutical ownership over getting results. Thus, the majority said, “we believe that taking care of our were of the opinion that, working towards the people goes beyond just producing progress of and giving back to the community was medicines to make them better”.their top priority.

Budgeting

For all the pharmaceuticals, the first step in All the pharmaceuticals also indicated that their philanthropic endeavours is to identify the area of budget for philanthropy was reviewed and interest when contributing towards social approved on an annual basis by their Board of development. This is followed by carefully Directors. The budget is determined in the light of selecting a Civil Society Organisation (CSO), with the financial performance in the preceding year, given expertise, to further their CSR interests. the ongoing and upcoming project requirements, Without any exception, each of the organisations as well as, the needs of the community at large. interviewed felt that giving came naturally in the Ad hoc measures are adopted in case of a pharmaceutical sector. 'Because of what we do, disaster or other national emergency situations, to we are constantly swarmed with requests for help provide immediate relief and assistance. and support, both financial and in-kind. In this sense, rather than us going to them, the community stakeholders come to us with their social needs, and we try and accommodate them with a spirit of social responsibility'.

The Role of Business in Solving Social Problems

The Preferred Thematic Areas

Pharmaceuticals across the board viewed as a priority, is fairly obvious (owing to the Pakistan's fragile health sector to be of primary industry's production focus), the pharmaceuticals concern, and, that the pharmaceuticals can and vociferously expressed their concern and were playing a pivotal role in the development of awareness about the need for increased global this area. In order of priority after the health access to medicine, and therefore, their sector, 60% identified education, followed by deliberate choice and focus on this thematic area environment (40 %) as development areas of compared to other development sectors. interest. Although, the choice of the health sector,

Change in Giving (2009-10)Figure 6

Change in Average Giving (PKR million)Figure 7


O v e r v i e w 23

CSOs were identified as the preferred channel activities carried out. Other factors considered by and partners of giving by all the organisations the pharmaceuticals, when selecting a partner, interviewed. The preference was primarily based included credibility, financial transparency and on the area-specific capacities, skills and h i s tory o f the par tner organisa t ion. expertise that individual CSOs possess, in order to Pharmaceuticals were also made aware of the promote and implement the development directory of PCP certified CSOs that meet initiatives. CSOs were also considered as credible internat ional best pract ise standards. grass-root promoters with enhanced outreach Pharmaceuticals were receptive to the idea of capacities. Additionally, the choice also hinged working with Certified CSOs in the future, stating high on the openness of the CSOs to the that 'we want to be the best in what we do. And this monitoring practices, especially those of the is the quality we look for in a partner for our donors, along with regular update reports on the development agenda'.

Channelling Funds

Innovative Programmes

The element of sustainability is important for any other, one particular innovative programme stood development initiative. However, it is specifically out to be unique. Through this particular crucial for social development, considering its programme, the pharmaceutical provided impact on human welfare, culminating in the monthly rations, including basic items such as tea, development of communities and the nation as a grains and milk powder for its blue collared whole. Sustainable development programmes employees. The ration provided was adequate to should also essentially foster innovative initiatives comfortably sustain a family of four. This extra akin to the needs of particular communities and amount (PKR 1000) was an add-on to the its people. To understand this factor, the employees' monthly salary under the given pharmaceuticals were asked about their most programme. Thus, instead of giving the extra innovative programmes. While all companies money of PKR 1000 cash, essential edible items had, in their own way, made valuable were provided to ward off any likelihood of it contributions through one programme or the being spent on other things.

The ProcessWith the exception of two pharmaceuticals, that monitored and executed the philanthropic had a separate department to handle their giving programmes. programmes, under the broader descriptor of CSR, all others had incorporated the programme The Departments in charge were as follows (See into the existing programmes: in 40 % of the Figure 8): cases, the finance department was handling vFinance philanthropy; 30 % of the pharmaceuticals had vCorporate Communicationstheir corporate communications unit manage vCSR Department giving; 10 % had a cross-department that vCross-department Team

Department in ChargeFigure 8

Issues and ChallengesThe role of the Government in philanthropy and favourite subject for criticism and debate. The CSR is currently very limited. It has further pharmaceuticals vehemently feel that in order to decreased as a consequence of the passing of the carry out their CSR commitments, they need the 18th Amendment. The 18th Amendment, as such, support of all the stakeholders for easy and was brought about without establishing a well- enhanced access to their products. This support carved regulatory mechanism for monitoring and applies across the board, including an active proper regulation. Under such circumstances, the commitment of the government, individual and corporate sector, specifically the pharmaceuticals corporate donors, as well as, the local and are exposed to the risk of unlicensed competition, i n te rna t iona l commun i t y. The en t i r e producing compromised quality products and pharmaceutical community also feels that supplying them to the masses at attractive low 'working alone to provide medicine at subsidised prices. For something as serious as medicine, a rates would result in pharmaceuticals not being regulatory body is equally essential to protect the able to sustain themselves, let alone the interests of this sector – issue licenses, allow community'. Profit, they maintain is essential for patents where felt necessary, and to facilitate this sector in order to continue with Research and sustainable access to health care. Development (R & D) initiatives which are

indispensable for exploring innovative solutions Since the pharmaceutical sector is primarily to the prevalent health issues in our society. 'This is profit-oriented, its philanthropic role is reluctantly a fact that needs to be accepted and or not entirely accepted by the stakeholders. For acknowledged by all those who question the this particular reason, the pharmaceuticals are a moral code of actors in this sector', they urged.


L e a d e r B o a r d 25

Recommendations

The pharmaceutical industry felt that specific targets should be set for the sector, in terms of contributing to social development. This would provide a good benchmark for assessments

Pharmaceuticals also feel that the Government should acknowledge and appreciate their existing efforts towards social development. Additionally, the existing system should focus on strengthening and increasing stringent transparency measures

A regular reward programme should be introduced to acknowledge CSR and philanthropic efforts of the pharmaceutical sector to motivate them to continue to act in a socially responsible manner

6The Government should consider the Millennium Development Goal 8 as a directive and cooperate with the pharmaceuticals to provide access to affordable essential drugs in a developing country like Pakistan

The Government may also consider ways to encourage Public Private Partnerships (PPPs) in the area of health. Incentivised participation for pharmaceuticals, in the form of tax incentives or recognition awards, will bear positive results and further promote contribution to development

Too often, we take the sustainability initiatives of To understand the importance placed on CSR corporate sector entities for granted, rather than within the corporate sector, it is essential to zoom valuing these actions, and realising that every into the personal experiences of people working Corporate Social Responsibility (CSR) effort is a actively in CSR. No number of CSR reports can reflection of an organisation's concern for the replace the insights gained by hearing the real society and its stakeholders. We must take such stories from those who make things happen. The efforts as the sum of voluntary actions of background, challenges and perspectives of the individuals in a very complex web of real people, sharing views and incidents considerations. Corporate sector firms today are concerning CSR in their company is always very focused and driven by their responsibilities informative, enlightening and inspiring. This year towards the CSR programmes. A vast majority are the Centre has documented and presented endeavouring to formalise their CSR profiles of a three companies that were among programmes so as to enable better, efficient and the top 5 in the category of volume of giving for effective planning. 2010.

Leader Board44

Goal 8—developing a global partnership for development. This goal includes as a target the provision of access to affordable essential drugs in developing countries

6



Company Name: Pakistan Petroleum LimitedEstablished July 1st 1952CEO: Mr. Asim Murtaza KhanDonations PKR 519 million (1.5% of PBT)Ranked first in the category of volume of donations

The pioneer of the natural gas industry in the The CSR programme's objectives go hand-in-country, Pakistan Petroleum Limited (PPL) has hand with key Millennium Development Goals, been a frontline player in the energy sector since particularly achieving universal primary the mid-1950s. As a major supplier of natural education, reducing child mortality, improving gas, PPL today contributes some 25 percent of the maternal health and empowering women. country's total natural gas supplies besides producing crude oil, Natural Gas Liquid and PPL has played a significant role as a responsible Liquefied Petroleum Gas. corporate citizen since the inception of its

commercial activities in Sui, by establishing a Over the years, PPL has successfully developed a primary Sui Model School (SMS) in the mid-1950s reliable foundation and infrastructure for for children of workers and the local community. providing clean and safe energy through SMS was upgraded regularly with the recent sustainable exploitation of indigenous natural addition of a girl's college. It now operates as Sui resources, while adhering to best practices of Model School and Girls College (SMS&GC). corporate governance and employee health and safety, and constraining the ecological footprint In 2001, the PPL Welfare Trust was founded to of its operations. Corporate Social Responsibility provide geographical and thematic diversity to (CSR) is reflected in the Company's vision with an the Company's CSR programme. It currently emphasis on value addition to shareholders' includes education, health, infrastructure investment and the nation as a whole. This is development, socio-economic uplift and post-consolidated in the mission statement which disaster rehabilitation of disadvantaged stresses on maintaining the highest standards of communities living in and around its operational health, safety and environment protection and areas, as well as, other parts of the country.addressing community development needs.

ABOUT PPL

CSR has become an integral component of the While a generic definition of CSR exists, individual corporate strategy for most companies. It plays a organisations define their own scope and key role in enabling companies to connect with its dimension according to their business philosophy stakeholder communities, develop trust, goodwill and priorities. And hence, to think that oil and gas and support which, in turn, is mutually beneficial companies' philanthropy and social responsibility in the long run. For an exploration and production is only linked to their obligations under the company, CSR becomes more important as the Petroleum Concession Agreement (PCA) is a Company's operations require working in remote misconception. For PPL, the argument is evidently areas of the country, where often people are untenable as PCA was implemented during deprived of even the most basic civic facilities. 1980s, while PPL has remained committed to Moreover, there are community expectations from social responsibility since the beginning of its external entities operating in their vicinity. By commercial operations in the early 1950s. This is putting in best efforts to meet these expectations, further endorsed by the Company's determination PPL was able to win the trust of local communities, to dedicate at least 1.5 percent annual pre-tax which has enabled the Company to run its profit for CSR initiatives. During 2010, PPL spent operations smoothly and spur socio-economic PKR 519 million in addition to the amount development in the areas. earmarked under PCA obligations.

THE POWER OF CSR

PPL's history is a great motivator for increasing programme for quality outputs by maintaining attention and resources and sharpening strategy transparency, consistency and relevance. for community development efforts. SMS was established back in 1957 in Sui, District Dera PPL ensures that there is no harm done to the local Bugti, when the concept of CSR was still gaining communities due to its operations as the currency. PPL takes pride that SMS&GC and Company continuously plans and implements similar projects, such as, Sui Field Hospital (SFH) strategies to improve their well-being. Local have been working sustainably since the last five representatives are taken on board, before decades. initiating operations in the area, through

consultation and public hearings. This process Though the approach has changed from self- serves as an ice breaker, setting the tone for the implementing projects to working with partners, relationship between the Company and PPL's CSR portfolio has increased manifold by community that evolves with a sense of trust and addressing stakeholder needs. Initially, PPL's CSR ownership. programme focused solely on employees, branching out gradually to underserved Community participation and engagement plays communities. Today, the Company's CSR a key role in planning and implementing CSR programme benefits communities, in entirety, in initiatives in the area. Engagement with the local operational areas, as well as, beyond such communities and other relevant stakeholders geographical limits. assists the Company in identifying on-ground

needs for planning and implementing initiatives The decision to establish the Pakistan Petroleum that can spur development. PPL has an in-built Welfare Trust (PPLWT) in 2001, as an independent needs assessment process through which staff visit body, came about to oversee the Company's CSR new areas, talk to stakeholders, including

HOW CSR WORKS IN PPL

Mr. Asim Murtaza Khan - CEO PPL


government, community-based organisations, There are many experiences that have taught areas notables and community representatives. lessons to improve PPL's CSR outreach and Based on their needs and feedback, plans are initiatives. When PPL was setting up primary developed for CSR projects. schools at Kandhkot, several options for site

selection were available. However, PPL preferred The focus of PPL's CSR programme remains on the to construct schools on land provided by provision of education and healthcare facilities, communities based on needs assessment, and especially for locals living in and around PPL- preference was given to locals living near the operated fields. The Company believes that operational areas. providing quality education to children and youth of marginalised communities can ensure The Company's decision created a mixed sustainable self-motivated change. Quality response among certain quarters who expressed education can empower local youth to make apprehension that sufficient numbers of students decisions and take charge of their development will not be available to optimally run these schools through exposure to and utilisation of promising due to its location. However, when these schools opportunities. PPL recognises that provision of opened admissions, it was heartening to note that healthcare facilities has a major role in improving registrations exceeded the schools' capacity, and the quality of life of underserved communities. A appl icants had to be short l is ted for healthy and vibrant community can benefit from accommodating the desired number of students. other development opportunities, such as, This reflects the community's trust on PPL's ability education and livelihood generation options. to provide quality services through transparent

and equitable processes.Lessons learned from interactions with stakeholders and on-ground interventions have become part of PPL's 60 years of legacy, and contour the Company's CSR programme in line with emergent needs.

PPL implements its CSR initiatives in partnership The Company's needs assessment programme with credible Civil Society Organisations (CSOs), and commitment to work with communities having relevant experience and local presence, around its operational areas remain the main with a record of consistent, reliable, quality- focus of its CSR efforts. It provides the basis to oriented and transparent performance. Besides, identify, plan and implement initiatives. PPL Board competency of staff and acceptance by local only influences CSR initiatives/ giving, in case of a communities are also major considerations for critical need. Moreover, the Board largely selection. The purpose is to provide quality supports the management's plans to implement services through experienced, skilled and relevant CSR initiatives. All major CSR projects are sent for civil society organisations, while PPL remains part Board approval before implementation. Periodic of the planning, monitoring and evaluation updates and critical issues are also raised with the process throughout, along with providing Board, as appropriate, to seek guidance and financial support and assessment. These support. partnerships have resulted in delivering many successful initiatives, including eye and medical camps that are regularly held around PPL-operated areas.

CONSIDERATIONS FOR CSR

The establishment of the PPLWT, as an particularly in Sui, were guided by Sui Dera Bugti independent body in 2001, provided a major Trust, which included governing members from breakthrough for the Company's CSR other companies operating in the district. Later, programme. The trust led to the development of a PPL realised that in order to lend focus to the full-fledged department to look after CSR Company's initiatives and develop a viable and initiatives in various thematic areas, together with comprehensive programme, a separate body dedication of an annual budget of 1.5 percent of needs to be developed. As a result, PPLWT's the Company's pre-tax profit. These two initiatives establishment led to development of a full-streamlined the Company's commitment and fledged Community Development Department. efforts for CSR.

The main thrust for establishing PPLWT was to provide direction and focus to the Company's CSR programme. Before this, PPL's CSR initiatives,

STEPPING STONES

EMERGENCY RESPONSE

As a result of the earthquake in 2005, post- rehabilitation efforts for the victims of 2010 disaster relief and rehabilitation was included as a Floods. PPL Board approved PKR 100 million to key focus area in PPL's CSR efforts. Besides assist flood victims. Half of the amount was spent providing immediate relief to earthquake victims, for relief activities and the remaining PKR 50 PPL constructed and operationalised a million was dedicated for rehabilitation of Rehabilitation Centre in Bagh, Azad Jammu and affectees. Kashmir (AJK) to provide orthotic and prosthetic treatment and support to victims. Even though PPL Recently, PPL's Board approved PKR 35 million to does not operate in AJK, “We saw where help was supplement the government's efforts on flood needed, we realised what we could do to alleviate relief. Of this, PKR 20 million was donated to the the hardships people were facing, and we went Prime Minister's Flood Relief Fund 2011, and the ahead and did it,” remarked PPL's General remaining PKR 15 million was utilised for in-kind Manager Corporate Services Muhammad Yaqub. relief for the victims.The same learning was applied for relief and



PPL believes that being socially responsible is in preference in the major CSR projects, such as, the itself a big reward, as this consciousness is a Higher Professional Scholarship Programme or blessing to be able to relate and share benefits the upcoming National Outreach Programme.with those who are in need. For PPL, the major satisfaction is to see improvement in the lives of its PPL believes that it is every company's stakeholders through the efforts of the Company. responsibility to pay back to society which is the major stakeholder in providing natural and On the practical front, PPL's responsiveness to human resources for its operations. The private development of the local communities around its sector in Pakistan needs to be continuously operational areas has assisted the Company in encouraged by the government and other establishing their trust and confidence. Even in institutions, such as the PCP, to play their role new operational areas, PPL staff are welcomed as adequately and strategically, with due emphasis people see hope for a better future with PPL. The on bringing about a positive change and communities can now relate that the use of channelling the energy of local communities resources from their area has a direct link to their towards self-improvement and sustainable socioeconomic well-being, as they are given development.

Company Name: Habib Bank LimitedEstablished: Dec 3, 1947CEO: Mr. R. Zakir MahmoodDonations PKR 395 million (1.6% of PBT)Ranked second in the category of volume of donations 2010

Habib Bank Limited (HBL) was the first steadfastly adhere to high moral principles and commercial bank established in Pakistan in 1947. professional standards. HBL's Corporate Social Over the years, HBL has grown its branch network Responsibility (CSR) approach is all about and become the largest private sector bank with enabling local communities, customers and all over 1,450 branches across the country and a other stakeholders to advance and progress. In customer base exceeding five mill ion 2010 in order to focus more effectively on CSR, relationships. Acknowledged today as the leading the HBL Foundation was set up. By taking this bank in Pakistan, HBL feels strongly that their step, the Board affirmed that it wished all CSR success depends upon the trust they have built endeavours to have independent focus and core with their customers - and society in general. This funds. The Foundation received an initial trust drives HBL to possess and, furthermore, endowment from HBL.

ABOUT HABIB BANK LIMITED

CSR IN FOCUS WITH MR. R. ZAKIR MAHMOOD – CEO HBL(The following statements are extracts of an interview with Mr. Zakir Mahmood)

At HBL our Philosophy is that we are an important incorporate this belief into every decision we member of the community and, furthermore, that make. For this reason, we consider CSR an all members of a community are interdependent. extremely important aspect of our operations; in We see ourselves as an organisation which is part fact it is inherent in the Bank's vision that we are an of the national fabric and contributes to its ethical company which focuses on the rights of all development to the extent possible, and we stakeholders (as opposed to only shareholders).

HOW CSR WORKS IN HBL

I think that at a very basic level, we are a people direct its focus towards the unbanked segments of committed to making the lives of others better, society to make sure that the less privileged are and so we help people by doing our job to the best facilitated and encouraged to enter the main of our abilities everyday. The services we offer also stream. Even in providing loans, we encourage focus on the smaller markets and often on less businesses of all sizes, not just medium and large. profitable areas as we want to provide We believe in providing avenues for investment accessibility to financial services as widely as and savings to all individuals and are working on possible without focusing solely on endeavours different schemes like mobile bank branches to that guarantee profitability. That is a socially make our products and services more accessible. responsible step we take with great pride. For the In this our widespread national branch network is last few years HBL has made a conscious effort to an advantage.

MEASURING SUCCESS




At HBL for CSR we feel that the areas that can included in PCPs evaluation parameters. We also benefit the most from our contributions and, in believe that projects that have multiple donors are return, give back to society in the long run are likely to be more sustainable. We are health and education, and for this reason we have encouraging the larger CSOs which we are prioritised these areas currently. contributing to, to develop endowment funds

which will aid long term sustainability with the help The HBL Foundation has a well defined Donation of a stable corpus pool of funds and endowments.Policy outlining criteria and grant areas. However, our CSR Policy is flexible, as some contributions It is important to mention that our employees have are required due to urgent need, and this is also participated in payroll giving for the especially in the case of disaster relief. Our criteria Earthquake and Floods for example and this for giving emphasises financial governance and culture is fully supported and encouraged by HBL. long term sustainability of the organisation along During the floods last year HBL's branches in the side project impact. affected districts undertook distribution of food

and relief supplies directly.We therefore prefer to work with experts in the Civil Society Organisations' sector, and when selecting partners we consider all aspects that are

Khyber Pakhtunkhwa. Currently we have agreed realisation that no matter what we do there will to support a community development project in always be something that remains undone and Saroona (Khuzdar District) Balochistan which will the reminder that our focus should remain on focus on children's education, health and doing our very best.microfinance. These initiatives reinforce the

In 2009, HBL worked with the nascent requirements for funds for relocating the Government of Gilgit Baltistan to assist in the population to drier areas. Alongside this our Attabad lake emergency and is currently also employees have also participated in relief efforts working in the Chitral and Sindh areas. In 2009 directly. We are now contributing to long term and 2010 HBL immediately responded to the rehabilitation efforts through reconstruction of Federal and Provincial Government's urgent housing.

MEASURING SUCCESS

We characterise ourselves as 'quiet givers'. This is service industry, we are facilitating each and every because we believe that being ethical and one of our stakeholders in some way or another, contributing to national development is an even when there might not be the promise of integral part of the HBL brand. Our CSR work is immediate profitability. It's extremely rewarding therefore seen as one facet of our contribution to to know that we reach out to millions of people National Development. We contribute in many everyday by our efforts. There is still a lot of work other ways, agri finance; small business finance; to be done. We live in a country of approximately distributing for the Government, Watan Cards 187 million, with only 20 million active bank and Benazir Income Support Cards; mobile accounts. branches in flood relief camps.

Our aim is to position ourselves so that we are For us the measurement of success in this area is helping people change their lives for the better not in the form of profits generated and statistical and realise their dreams. data. It is about the knowledge that being in the

STEPPING STONES

Talking about project impact, sometimes small a large part of the jail population comprised of donations go a long way in making a difference. drug addicts, HIV aids was a major concern. Last year we were contacted by an extremely well Despite the fact that this project was very different respected retired judge of the Supreme Court who from initiatives we normally choose to undertake, runs a legal aid organisation in Sindh. The HBL decided to contribute a barber shop and authorities had requested his assistance for hospital equipment (xray, laboratory, operating Landhi Jail Karachi, in hopes that his organisation theatre and medicines) to this jail. Improving could improve jail conditions. The organisation hygienic conditions was considered an imperative approached HBL, and shared with us the ground to stem spread of disease especially HIV aids. realities that were prevalent in the jail. We were jolted by the harsh, appalling conditions the In Shikarpur we provided Xray and Ultrasound prisoners were facing. There was lack of space equipment to a small mother and child hospital with too many men crammed into rooms far too and similarly we helped two District Headquarter small. Skin diseases (scabies) was rampant and as level Government hospitals in Balochistan and

EMERGENCY RESPONSE



Company Name: Engro Corporation LimitedEstablished: 1991CEO: Mr. Asad UmarDonations PKR 136 million (1.6% of PBT)Ranked fourth in the category of volume of donations

Engro Corporation has come a long way from its managerial resources under the Foundation, inception as a fertilizer manufacturing and Engro and its partners seek to create large scale marketing company, to becoming one of the social impact. A range of partnerships with largest conglomerates in Pakistan. Engro is all government, nonprofit organisations, and other about its people, harbouring a dynamic and industry players are supported to enhance the energetic culture, with emphasis on core values scale of investments and ensure sustainability of and loyalty of employees. The tone for Engro's initiatives.corporate culture, and the importance of employees, was set after the Company was Engro also has employee giving and volunteering bought from Exon and became a Pakistani programmes to support employees' efforts in their company in 1991. communities.

Today the Engro Foundation, set up in 2009, serves as a single platform for community engagement activities and social investments of Engro affiliates. By pooling their financial and

ABOUT ENGRO CORPORATION LIMITED

Governed by its core values, to think and act with 1. Safety, Health & Environmentintegrity is a way of life at Engro. Therefore, in 2. Ethics and Integrityaddition to growing the business in a profitable, 3. Leadershipethical and sustainable way, we at Engro, are 4. Quality and Continuous Improvementcommitted to invest in host communities, as well 5. Enthusiastic Pursuit of Profitas, to mitigate our environmental footprint. As 6. External and Community Involvementresponsible corporate citizens, we continue to 7. Candid and Open Communicationsconstantly strive towards integrating sustainability 8. Enjoyment and Funinto business. Engro Foundation is committed to 9. Innovationcontributing towards growth of sustainable 10. Individual Growth and Developmentsocieties, in which people have access to choices 11. Teamwork and Partnershipand opportunities for development. 12. Diversity and International Focus

Our core values form the basis of everything we Engro's values explicitly stress on the importance do at Engro: from formal decision-making; to of caring for the community. We understand that if how we conduct our business; to spot awards and you work in a community, you become a part of recognition. At Engro, we never forget what we that community, and this acknowledgement of stand for. Our 12 core values are as follows, and obligation to society is one of the greatest they are undeniably constantly directing us contributors to our success.towards being increasingly socially responsible.

HOW CSR WORKS IN ENGRO

CSR IN FOCUS WITH MR. ASAD UMAR – CEO ENGRO CORPORATION LIMITED(The following statements are extractsof an interview with Mr. Asad Umar)

At Engro, the very core of our belief that, business programme helps sustain this balance. In this as a whole, should never operate as a free respect, Engro's contributions towards society are enterprise in a community, by taking for granted a driving force in all its achievements to date, and that they have the ability to operate in society. to a great extent we feel that it is our Social Giving back to the community is one of the joys Responsibility programme that enhances our and successes of any company, and a strong CSR achievements.

We are aware of our strengths and our capacities, sustainability and smooth operations. With the and consequently, we acknowledge that we are passage of time, we have become more directly not experts at carrying out development work. involved with our partners, and follow through Our CSR initiatives are handled by Engro with the contributions we make, by maintaining a Foundation and most activities are carried out in presence and working alongside them. The partnership with specialist Civil Society thematic areas we prioritise are education, Organisations (CSOs). When looking for livelihoods, health and disaster management. partners, we prioritise experience, financial Education is our top most priority because we feel transparency, and willingness to monitor progress that investing in education can bring about of initiatives, at regular intervals, to ensure fundamental changes in the society.




STEPPING STONES

Engro has been working towards CSR initiatives financial and managerial resources under the since the very beginning. With the establishment Foundation, Engro affiliates seek to create large-of a dedicated CSR wing, the Engro Foundation, scale social impact. We support a range of Engro has now defined key focus areas of CSR partnerships with government, non-profit which are catered to all year round, yielding more organisations, and other industry players, to output every day. enhance the scale of our investments and ensure

sustainability of our initiatives.The Foundation serves as a single platform for community engagement activities and social investments of Engro affiliates. By pooling their

DISASTER MANAGEMENT

Engro Foundation focuses a lot of attention on strong partners in the field, distributing 2.5 million natural disasters, as was the case in the meals, 419,000 liters of milk, 16,000 liters of earthquake of 2005, followed by the devastating water, and medical treatment to nearly 5,000 floods of 2010/2011. Engro Foundation strives people and 100,000 animals. We mobilised a to improve the levels of emergency preparedness, sum of PKR 250 million for flood relief and as well as, providing effective rescue and relief in rehabilitation alone. Our army of volunteers was t h e a f t e r m a t h o f a d i s a s t e r . galvanised by our motivated employee force, Engro Foundation sprang into action following distributing essential items of aid, hand pumps, the catastrophic flooding of Indus River tributaries hygiene kits, shelter tents, latrines, and medicines. in the summer of 2010. Engro Foundation efforts To sustain the effort and restore livelihoods, Engro were focused in Ghotki, Sukkur, Muzaffargarh Foundation initiated the following two projects:and Layyah Districts. Engro worked closely with

Engro Foundation set up a model village in Union as well, as having off-grid energy resources Council (UC) Rakh Eshanpur Tehsil Kot Addu through solar power, providing electricity to all (district Muzaffargarh), the single largest social homes and street lights. The village will investment in the Company's history. particularly focus on providing vocational and

technical training to farmers, so that they can The village, with 166 homes, is designed to improve the quality and quantity of milk from their provide adequate shelter, in addition to a local livestock. In addition, a dairy hub will be created school and basic health facilities. The model in the village to develop livestock and dairy village will also incorporate an improved civil farming.infrastructure in the form of roads and sanitation,

Model Village Programme

Khushaal Livestock Project

During the floods, there were many news reports Given the importance of livestock, Engro of villagers who risked their lives to rescue their Foundation collaborated with the United States livestock. These stories may seem perplexing to Agency for International Development (USAID) urban dwellers but make sense when considering and started a programme called the “Khushaal the fact that cattle form a vital source of income Livestock Project”, to help restore the productivity for most rural households. of farm animals to pre-flood levels.

During one of Engro's projects in partnership with areas, and are a part of their daily lives. We meet UNDP, local women were employed and trained society's needs and are contributing towards the in the field as lady livestock workers. At a later economic and social development of our country.date, when Engro's representatives visited the area while monitoring the project, they In Pakistan, the capacity issue normally exceeds consistently came across declarations of how the intention issue. As a nation, we are a people of these women trainees felt about suddenly being good intention, but improper planning leads to treated with far more 'respect' and appreciation at efforts falling short of their true potential. For this home and in the community. And this was beyond reason, we believe that the CSR structure should anything they had envisioned to be a possible be a formal one and focus on sustainable, long reality. term goals in partnership with specialist

organisations.It is rewarding when we see what a fundamental change a good programme can make to lives. We meet the needs of many people in various

MEASURING SUCCESS

“The best thing about working with Engro is that it meets the needs of not only the people but the means of sustaining their livelihoods.”


C o n c l u s i o n 39

Corporate Social Responsibility (CSR) is a from PKR 228 million in 2000 to PKR 3.3 billion in growing global phenomenon. Most organisations 2010,. This increase in philanthropy was despite today consider corporate philanthropy and the fact that the number of companies involved in Corporate Social Responsibility (CSR) to be giving was lower than in 2009.The top 25 giving synonymous and decisively acknowledge an companies accounted for 80% of the total giving. A increased sense of responsibility towards their role particular mention needs to be made of the number in social and sustainable development. There is a of companies with giving of PKR 100 million or growing sense of understanding, amongst many, more which strikingly increased by 300% from last that CSR needs to be adopted as a culture. year. However, results show that despite the rising

philanthropy, the trend lines for giving seem to In Pakistan, the concept of CSR, in its entirety, is remain somewhat linear over the past one decade. gradually gaining momentum. Most of the The change in giving in real terms when adjusted corporate sector firms in the country recognise with CPI reflects a six-fold increase from the base and accept the significance of CSR and many year. have adopted formalised procedures for giving that are declared and registered. There is, The current status of corporate philanthropy and however, a larger pool of unlisted companies the growing interest, akin to social development of which are generous givers, but remain publically the country and its people, indicates a huge unrecognised in the absence of formal potential for increasing its volume, scale and declaration and documentation of in-cash giving. effectiveness. This potential can be greatly nurtured Giving in-kind and in-time giving has so far not by employing structured and concrete initiatives to been adequately recorded, which, if accounted assist the corporate sector in formalising their for could enormously add to the overall volume of important role towards CSR. documented philanthropy.

This year, statistics on corporate philanthropy show a fourteen-fold increase in giving, rising

Conclusion55


1. Mobilise the corporations to formalise the procedures for giving and align their philanthropic strategies with their business objectives

2. Communicate with the stakeholders to help identify the potential issues that have yet not been addressed by the companies and help find ways to measure their inputs and outcomes, in order to improve CSR strategy continuously

3. Provide, to the corporate sector, a realistic road map of the development paradigm, for their meaningful interventions directed towards sustainable development. This, however, is not intended to mean that the State should be absolved of its responsibilities

4. Explore greater support from the Government and Public authorities to promote philanthropy and its documentation through acceptable regulations and propagation of the philanthropy message to prove the benefits of giving

5. Develop a framework for benchmarking, evaluating and tracking business impact in order to identify a company's core strengths in solving real world problems

6. A platform should be made available, for all stakeholders, to discuss best practices that the sector can adopt and based on these discussions, national level advocacy campaigns to increase awareness and acceptance of the benefits of corporate philanthropy practices should be launched

Way forward

corporate philanthropy in pakistankhan (co-chair) along with the causes and human development....

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