Corporate Social Responsibility in Nepal: Duty or Compulsion

Corporate Social Responsibility (CSR) is the commitment from all the stakeholders, business to be specific, for their contribution to improve the quality of life of the people of a certain community or a society at large. CSR is considered as the transparent business practices based on business ethics that come along with the legal requirements and accountability towards the society.

While all businesses look for maximizing profit, coming together this ambition with social values and cultural responsibility helps in enhancing the long-term value creation of a business. Business houses can perform CSR of different kinds and scales, which may or may not require an added investment.

The corporate world in Nepal, for few years, was involved in CSR and had been practicing silent philanthropy for different sectors of the society. Most commonly, businesses are focusing on education, healthcare and environment, and heritage protection to count as a part of CSR.

The Industrial Enterprise Act (section 48) and Circular no. 11/073/74 issued by Nepal Rastra Bank mandatorily imposed CSR over certain industries, banks, and financial institutions.

The most common CSR practices in Nepal are related to corporate governance as well as customers whereas the least common CSR practices include the environment and community-related activities. There are few businesses that have been involved in the education sector as a part of their CSR.

Ncell, for example, as a responsible corporate house, has made a significant investment of more than NPR 1.25 billion in various social projects, contributing to socio-economic development and support the government in achieving Sustainable Development Goals (SDGs). Ncell has been providing various scholarships to needy students and excellence awards for the good performance of students. Likewise, The Chaudhary Foundation under the Chaudhary Group is getting involved in educating the next generation of Nepal (Gyanodaya Scholarship, community schools, Anuvuti, etc.) as a part of their social responsibility.

Even as there has been a significant interest in CSR and also the government policy has also made compulsion for businesses, as experts opine, the overall practice is still at the moderate level. The companies are still not paying enough attention to education-related issues.

Even with the gradual practice of CSR culture in Nepal, the actual concept of CSR is yet to be captivated well by the corporate world in Nepal. The business houses, despite spending their substantial time and money on projects, the impact to the concerned stakeholders is hardly felt, especially in education sectors. After the 2015 earthquakes, according to the ADB, close to 8,000 schools and 30,000 classrooms were damaged or destroyed, directly affecting the education of 1.5 million children. However, these corporate houses, as experts say, could not address the core part even after six years of the massive earthquake. And whatever efforts have been made, most of them are found to be in no connection with the company’s vision or strategy to fulfill their CSR.

The government and policymakers have been considering giving tax exemption or any other clearly spelled out benefits to the corporate houses for their CSR activities. However, CSR should not be a compliance-based activity, and today’s businesses should follow their corporate social responsibility at whichever level possible to be a sustainable and socially responsible business.