a comparative study of corporate social responsibility in bangladesh and pakistan

Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment

* Correspondence to: Malik Asghar Naeem, Asian Institute of Technology, PO Box 4, Klong Luang, Pathumthani 12120, Thailand. E-mail: [email protected]

Corporate Social Responsibility and Environmental ManagementCorp. Soc. Responsib. Environ. Mgmt. 16, 108–122 (2009)Published online 25 February 2009 in Wiley InterScience(www.interscience.wiley.com) DOI: 10.1002/csr.185

A Comparative Study of Corporate Social Responsibility in Bangladesh and Pakistan

Malik Asghar Naeem1* and Richard Welford2

1 Asian Institute of Technology, Thailand2 University of Hong Kong, Hong Kong

ABSTRACTMaking a contribution to sustainable development through good corporate social respon-sibility presents businesses with a challenge, particularly in developing countries. This paper measures the sensitivity to corporate social responsibility amongst businesses operating in Bangladesh and Pakistan through a review of written policies of both listed local fi rms and multinational corporations operating there. We use the Global Compact supplemented by relevant parts of the Global Reporting Initiative Sustainability Reporting Guidelines to benchmark companies and countries. Signifi cant differences are found between local listed companies and multinational corporations. However, all com-panies are seen to be failing to engage with many aspects of corporate social responsibility related to sustainable development. Specifi c defi ciencies relate to anti-corruption, gender equality, child labor, community giving and the formal representation of workers. Few differences are found between the approaches taken by companies in Bangladesh and Pakistan. Given the development needs of the region we point to businesses being unwill-ing or unable to adopt suffi ciently robust corporate social responsibility and point to a role for both government and civil society. Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment.

Received 24 April 2008; revised 27 July 2008; accepted 3 September 2008

Keywords: sustainable development; Bangladesh; Pakistan; Global Compact; Global Reporting Initiative; human rights; labor

standards; anti-corruption; environment.

Introduction

THE STATE, CIVIL SOCIETY AND THE BUSINESS SECTOR ARE THE KEY PLAYERS RESPONSIBLE FOR ACHIEVING THE GOAL of sustainable development. Given economic globalization, however, the business sector has become more

important in terms of delivering tools and strategies to tackle the world’s development challenges.

Hart (1997) claims that although social and political issues are the root cause of the threat to sustainable

A Comparative Study of CSR in Bangladesh and Pakistan 109

Copyright © 2009 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt. 16, 108–122 (2009) DOI: 10.1002/csr

development in the world, only corporations have the three essential components –resources, global reach and

motivation – to achieve it. Corporations represent over half of the world’s largest economies (Anderson and Cava-

nagh, 1996 cited in Adams et al., 2004; Zadek, 2001) and the sales of the top 200 corporations is almost equal

to one-quarter of the world’s economic activity (Wheeler and Sillanpaa, 1997, cited in Adams et al., 2004; Zadek,

2001). Therefore, it seems only appropriate that this sector should play a proactive role in attaining the goal of

sustainable development. The United Nations (UN) World Summit for Sustainable Development in Johannesburg

in 2002 voiced the need for businesses to contribute to the building of equitable and sustainable societies,

wherever they work. In response to this perception, the paradigm of corporate social responsibility (CSR) has

become an essential part of business strategy amongst those companies committed to contributing to sustainable

development (Welford and Frost, 2006).

Pakistan and Bangladesh are home to about 300 million people with an abundant labor force and highly variable

legal protection. In such developing economies, there is greater chance of labor exploitation and human rights

violations. Moreover, because of cheap labor and less stringent environmental and labor laws, these countries have

become ‘havens for dirty industries’ and have attracted local, as well as international, fi rms that cannot operate in

developed countries (Bryant and Bailey, 1997 cited by Lund-Thomsen, 2004). This state of affairs often worsens

environmental degradation. At the same time, the two countries have also been plagued by poverty, illiteracy,

human rights violations, child labor abuse and an unskilled labor force prone to other forms of exploitation. All

of these issues point to a role for business, alongside that of the state and civil society, in achieving the goal of an

equitable and cohesive society.

This paper examines the CSR policies of listed local fi rms and multinational companies (MNCs) operating in

Bangladesh and Pakistan. In particular we examine the sensitivity of fi rms to CSR, which is measured in terms

of the availability of written policies in four CSR areas: human rights, labor standards, the environment and anti-

corruption.

Research Framework

CSR is a very broad concept. In this study, however, CSR is viewed in the light of the ten principles of the UN’s

Global Compact that are grouped into four major areas noted above. In addition, the indicators provided in the

sustainability reporting guidelines produced by the Global Reporting Initiative (GRI) are employed to identify

various aspects of CSR corresponding to the four major CSR areas. The consideration and inclusion of the four

areas and the corresponding elements into the written policies of selected companies determines their concern

and sensitivity to CSR.

The goal of the Global Compact is to generate leadership, individually as well as collectively, among businesses

to foster the concept of free markets and to address the concerns of the society at the same time (Sethi, 2003).

The ten principles of the Global Compact are derived from four major international agreements (the Universal

Declaration of Human Rights, the Fundamental Principles and Rights at Work of the International Labor Orga-

nization, the Rio Declaration on Environment and Development, and the UN Convention Against Corruption)

providing general direction and facilitating a culture of respect, in businesses, for the observance of its social

responsibility.

GRI is a partnership and coalition among businesses, non-governmental organizations (NGOs), the Interna-

tional Labor Organization (ILO), United Nations Environment Programme (UNEP) and accounting societies. The

coalition has pioneered the development of reporting guidelines that are important for achieving the goal of sus-

tainability. A unique characteristic of GRI is its multi-stakeholder composition. The voluntary reporting guidelines

have been developed through discussions with stakeholders at meetings held in Asia, Europe and the Americas.

According to Adams et al. (2006), GRI Sustainability Reporting Guidelines are the dominant guidelines for report-

ing and there can be observed an increasing trend of adoption of GRI guidelines in the business sector.

Because the Global Compact has been initiated and supported by the UN, it has the potential to gather a con-

sensus from all countries of the world and has been used as the starting point in this research. Moreover, GRI

adds detail to the general nature of the Global Compact principles. The two initiatives complement each other,

and thus, have been used to benchmark companies in this research. GRI indicators have previously been used as

110 M. A. Naeem and R. Welford


comparison criteria by Frost et al. (2005) in a study that examines the sustainability reporting of Australian

fi rms.

The four areas encompassing the corresponding Global Compact principles are outlined in Table 1.

The four major areas of the Global Compact are further defi ned by reference to 25 elements adapted from the

Sustainability Reporting Guidelines. Table 2 elucidates the important elements corresponding to each of the four

major areas of human rights, labor standards, environment and anti-corruption.

Research Methodology

A questionnaire was constructed, keeping in view the framework of the research comprising the four major areas

of CSR and corresponding elements as described in Table 2, in order to gauge the sensitivity of businesses in

Bangladesh and Pakistan. In Bangladesh, a random sample of 100 businesses listed on Dhaka and Chittagong

stock exchanges was taken. Questionnaires were sent to fi rms by post followed by telephone calls; however, none

of the fi rms replied. Therefore, connections with three well-known NGOs namely, ActionAid-Bangladesh, Bangla-

desh Enterprise Institute (BEI) and IUCN-Bangladesh were used to conduct surveys following a snowball sampling

method. Responses from 46 businesses – 24 listed local fi rms and 22 MNCs – were received.

In Pakistan, a total of 100 businesses listed on Karachi and Lahore stock exchanges were selected randomly and

research questionnaires were sent to them by post. Only 12 fi rms returned the questionnaires. As pointed out by

Grinnel (2001), the low response rate is one of the disadvantages associated with mail surveys and usually the

response rate is only 10 to 12%. In the wake of the low response rate, the non-respondent business fi rms were

contacted through telephone calls a number of times. References and contacts of WWF-Pakistan (Lahore Offi ce)

were employed and eventually responses from 83 fi rms – 59 listed local companies and 24 MNCs – were

received.

Written Policies on CSR

Table 3 indicates a considerable difference between local and multinational fi rms in terms of having written poli-

cies on the four areas of CSR in both countries. In Bangladesh, on average, 79.5% of MNCs surveyed have written

policies on the four areas in contrast to 31.25% of listed local companies. Similarly, 79.2% of MNCs have written

policies in contrast to 35.6% of listed local companies in Pakistan.

1. Human rights� Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and� Principle 2: make sure that they are not complicit in human rights abuses.

2. Labor standards� Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective

bargaining;� Principle 4: the elimination of all forms of forced and compulsory labor;� Principle 5: the effective abolition of child labor; and� Principle 6: the elimination of discrimination in respect of employment and occupation.

3. Environment� Principle 7: Businesses should support a precautionary approach to environmental challenges;� Principle 8: undertake initiatives to promote greater environmental responsibility; and� Principle 9: encourage the development and diffusion of environmentally friendly technologies

4. Anti-corruption� Principle 10: Businesses should work against all forms of corruption, including extortion and bribery.

Table 1. The Global Compact Principles



Elements related to human rightsHR 1 Protection of all aspects of human rights within the operations of the companyHR 2 Monitoring the protection of human rights within the company

s supply chain HR 3 Commitment to non-retaliation and process for effective employee grievance systemHR 4 Providing training to security personnel to create awareness about respect for human rights HR 5 Protection of rights of indigenous people within the workforce as well as in the communities where an organization

operatesHR 6 Allocating a share of operating revenues from the area of operations and its redistribution to local communities

Elements related to labor standardsLS 1 Existence of policies and procedures regarding freedom of association and collective bargainingLS 2 Elimination of forced and compulsory labor within the sphere of infl uence of the business entityLS 3 Provision for formal worker representation in decision-making or managementLS 4 Abolition of child labor within the operations of the business entityLS 5 Monitoring to ensure abolition of child labor in supply chain and the contractors LS 6 Prevention of all forms of discrimination in business operationLS 7 Provision of health and safety of employeesLS 8 Providing information to workers about HIV/AIDS and its preventive measuresLS 9 Provision of health facilities LS 10 Capacity building of employees through training courses each yearLS 11 Equal opportunities and monitoring mechanism to address workplace harassment and other forms of

discrimination LS 12 Composition of senior management with reasonable female/male ratio and other indicators of diversity as culturally

appropriateLS 13 Social performance reporting practice of business entities

Elements related to environmental protectionEP 1 Commitment to environmental protection within the operations of the organization itselfEP 2 Monitoring the environmental protection practices along the supply chain EP 3 Environmental reporting practiceEP 4 Allocation of resources for research and development related to environmental protection

Elements related to anti-corruption AC 1 Addressing the issue of bribery and corruption within the organization AC 2 Addressing the issue of bribery and corruption in the supply chain

Table 2. Key elements of human rights, labor standards, environment and anti-corruption from GRI

A great difference was observed in having written policies in the area of environmental protection and anti-

corruption. A large number of MNCs (81.8%) have written policies on each of the two elements in contrast to

small number of listed local companies – 33.3% and 16.7% respectively – operating in Bangladesh. Similarly, a

large number of MNCs operating in Pakistan also have written policies on the two areas – 100% and 83.3% – as

compared with 45.7% and 20.3% of listed companies having policies on the two areas respectively. The results of

chi-square test, as shown in Table 3, also confi rm that there is a signifi cant difference between MNCs and listed

local companies operating in Bangladesh in terms of having written policies on each of the four CSR areas. The

chi-square test results also indicate that in Pakistan (except for the area of labor standards) there is a signifi cant

difference between MNCs and listed local companies.

A large number of listed local fi rms in the two countries – 68.75% in Bangladesh and 64.4% in Pakistan – do

not have written policies on the four CSR areas. However, the listed local fi rms having written policies have attached

more attention to two areas of CSR, namely labor standards and protection of environment, in contrast to other

two areas related to human rights protection and anti-corruption. In Bangladesh, 45.8% of the listed local fi rms

have written policies on labor standards while the area of environmental protection has been included into written

policies by 33.3% of the fi rms, while in Pakistan, the two areas have been included into written polices by 59.5%



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the

two

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s

Diff

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betw

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MN

Cs

of

the

two

coun

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s

Multinational companiesSample Size = 22

Listed local companiesSample Size = 24

Chi-square test of Independence






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0.0

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12 0

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< 0

.05

yes

0.3

9 >

0.0

5no

0.1

0 >

0.0

5no

(77.

3)(2

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(54.

2)(2

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3 <

0.0

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.15

> 0

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(59.

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ritt

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on

envi

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ent

prot

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n

188

0.0

0 <

0.0

5ye

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270

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< 0

.05

yes

0.2

3 >

0.0

5no

0.0

3 <

0.0

5ye

s(8

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(33.

3)(1

00

)(4

5.7)

Wri

tten

pol

icie

s on

an

ti-co

rrup

tion

184

0.0

0 <

0.0

5ye

s20

120

.00

< 0

.05

yes

0.7

> 0

.05

no0

.89

> 0

.05

no(8

1.8)

(16.

7)(8

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(20

.3)

Ave

rage

17.5

7.5

1921

(%

)(7

9.5)

(31.

25)

(79.

2)(3

5.6)

Tabl

e 3.

Com

pari

son

of M

NC

s an

d lis

ted

loca

l com

pani

es o

pera

ting

in B

angl

ades

h an

d Pa

kist

an in

ter

ms

of h

avin

g w

ritt

en p

olic

ies

on f

our

key

area

s of

CSR



and 45.7% of fi rms respectively. However, the results of the chi-square test of independence indicate that there is

no signifi cant difference between listed local fi rms of the two countries in terms of having written policies on four

CSR areas.

Table 3 shows that a large number of MNCs in Bangladesh, 77.3% as compared against 54.2% of those of in

Pakistan, have written policies on human rights protection. While in the other three areas, percentages of fi rms

having written policies are comparatively higher in Pakistan. However, the chi-square test results point out that

except for the area of environmental protection, there is no signifi cant difference in written policies of MNCs of

the two countries. In Pakistan, 100% of MNCs have written policies on environmental protection in comparison

to 81.8% of those in Bangladesh.

Human Rights

Table 4 shows that, on average, a small number of listed local fi rms in the two countries – 17.9% in Bangladesh

and 13.9% in Pakistan – have written policies on elements related to human rights protection. However, in contrast

to local listed fi rms the average percentage of MNCs having written policies on human rights elements is higher:

58.2% in Bangladesh and 40.8% in Pakistan.

In Bangladesh, if we examine each of the six GRI elements, we fi nd that all are included in some of the written

policies of local listed fi rms. The policies exist in between 12.5% (HR 2, HR 5 and HR 6) and 29.2% (HR 1) of

companies. The range of MNCs having policies on each of the six elements varies from 36.4% (HR 6) to 77.3%

(HR 1 and HR 3). Similarly, in Pakistan, each of the six human rights elements is part of written policy of listed

local fi rms within a range of 8.5% to 20.3% in contrast to a range of 29.2% to 54.2% of MNCs having written

policies. The results of the chi-square test of independence indicate that there is a signifi cant difference between

MNCs and listed local companies in the two countries in all six elements of human rights protection except for

HR 6 in Bangladesh.

The comparison of fi gures related to listed local fi rms of two countries indicates that the percentage of local

Bangladeshi fi rms having written policies on each of the six elements is higher as compared to those of the listed

local fi rms in Pakistan. However, results of the chi-square test indicate that there is no signifi cant difference

between listed local fi rms of the two countries in terms of having written policies on human rights protection

elements.

There are some commonalities among the listed local fi rms of the two countries. The highest percentage of

listed fi rms in the two countries have written policies on the element related to protection of all aspects of human

rights within the operations of the company (HR 1). The other three elements that have been integrated into written

policies by the least number of fi rms are related to protection of human rights along the supply chain (HR 2),

protection of rights of indigenous people (HR 5) and allocation of a share of operating revenues for redistribution

to the local communities (HR 6). In Bangladesh, only 12.5% of listed fi rms have written policies on each of the

three elements. While in Pakistan, each of these three elements is part of written policies of the fi rms within a

range of 8.5% to 10.2% only.

The fi gures in Table 4 relating to the percentage of MNCs having written policies on human rights elements

reveal that more MNCs in Bangladesh have written policies on each of the elements as compared to those operat-

ing in Pakistan. However, the chi-square test results indicate that there is no signifi cant difference between MNCs

of the two countries. Similar to those of listed local fi rms, the element related to allocation of revenues for redis-

tribution to local communities (HR 6) has also been included in written policies by the least number of MNCs in

the two countries. Only 29.2% of MNCs in Pakistan and 36.4% of those in Bangladesh have written policies on

that element.

Labor Standards

In Bangladesh, 32.5% of local listed fi rms and 61.4% of MNCs have written policies on the 13 GRI elements related

to labor standards (Table 5). In Pakistan, 38.9% of listed local companies and 65.8% of MNCs have written policies

on these 13 elements of labor standards.



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betw

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MN

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Multinational companies Sample Size = 22

Listed local companies Sample Size = 24







Yes

coun

t(%

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(%)

P-va

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Yes

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lue

Sig.

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ll as

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hu

man

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in t

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ns o

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0 <

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120

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< 0

.05

yes

0.3

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5

No signifi cant difference

0

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0.0

5

No signifi cant difference

(77.

3)(2

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(54.

2)(2

0.3

)

HR

2Pr

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tion

of

HR

with

in

the

com

pany

’s

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ly c

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103

0.0

1 <

0.0

5ye

s 9

6 0

.00

< 0

.05

yes

0.7

6 >

0.0

5 0

.58

> 0

.05

(45.

5)(1

2.5)

(37.

5)(1

0.2

)

HR

3C

omm

itmen

t to

non

-re

talia

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175

0.0

0 >

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11 0

.03

< 0

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0.8

2 >

0.0

50

.06

> 0

.05

(77.

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0)

(18.

6)

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f se

curi

ty

pers

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l

125

0.0

0 >

0.0

5ye

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10 0

.02

< 0

.05

yes

0.6

8 >

0.0

50

.38

> 0

.05

(54.

5)(2

0.8

)(4

1.7)

(16.

9)

HR

5Pr

otec

tion

of

righ

ts o

f in

dige

nous

pe

ople

133

0.0

0 <

0.0

5ye

s8

50

.01

yes

0.5

7 >

0.0

50

.08

> 0

.05

(59.

1)(1

2.5)

(33.

3)(8

.5)

HR

6A

lloca

tion

of

reve

nues

for

re

dist

ribu

tion

to lo

cal

com

mun

ities

83

0.0

6 >

0.0

5no

7 5

0.0

2ye

s0

.57

> 0

.05

0.6

0 >

0.0

5(3

6.4)

(12.

5)(2

9.2)

(8.5

)

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rage

Cou

nt12

.84.

3 9

.8 8

.2(%

)(5

8.2)

(17.

9)(4

0.8

)(1

3.9)

Tabl

e 4.

Com

pari

son

of M

NC

s an

d lis

ted

loca

l com

pani

es o

pera

ting

in B

angl

ades

h an

d Pa

kist

an in

ter

ms

of h

avin

g w

ritt

en p

olic

ies

on e

lem

ents

rel

ated

to

hum

an

righ

ts p

rote

ctio

n



On an individual element basis, 8 of the 13 elements are part of written policies of more than 60% of MNCs in

Bangladesh while in Pakistan; 9 out of 13 elements are part of written policies of MNCs within a range of 79.2%

to 83.3%. Similarly, 33.3% to 45.8% of the listed local fi rms in Bangladesh have written policies on eight elements

while in Pakistan nine elements are part of written policies of listed fi rms within a range of 50.8% to 54.2%. The

two most ignored elements by the listed local fi rms in the two countries are related to composition of senior man-

agement with a reasonable female/male ratio (LS 12) and reporting on social performance (LS 13); none of the

local fi rms in Pakistan has written policies on the former element while the latter element is part of written poli-

cies of only 3.4% of the listed fi rms. In Bangladesh the two elements are part of written policies of 16.7% and

8.3% of the listed fi rms respectively. The same two elements have also been ignored by a large number of MNCs

in the two countries. The results of chi-square test of independence indicate that except for 6 elements out

of a total of 13, there is signifi cant difference between MNCs and listed local fi rms operating in Bangladesh

(Table 5).

The six elements that are not signifi cantly different are related to workers’ representation in decision-making

(LS 3), monitoring supply chain to ensure abolition of child labor (LS 5), non-discrimination (LS 6), providing

information to workers on HIV/AIDS and its preventive measures (LS 8), composition of senior management

with reasonable female/male ratio (LS 12) and social performance reporting (LS 13). These are the elements that

have been integrated into written policies by a fewer number of listed local fi rms as well as by the MNCs. However,

in Pakistan, there is signifi cant difference between the MNCs and local fi rms in all the elements.

Although percentages of listed local fi rms in Pakistan having written policies on most of the elements is higher

than those of the fi rms in Bangladesh, the results of chi-square test indicate that except for two elements (LS 10,

LS 12), there is no signifi cant difference between listed local fi rms of two countries.

The chi-square test results indicate that there is a signifi cant difference between MNCs of two countries in

having written policies on two elements related to workers representation in decision-making (LS 3) and female/

male ratio in senior management (LS 12). The former element is part of comparatively large number of MNCs in

Pakistan while comparatively large number of MNCs in Bangladesh has integrated the later element into their

written policies.

Environmental Protection

Table 6 indicates that on average, 69.5% of MNCs in contrast to 23.9% of listed local fi rms in Bangladesh

have written policies on the four GRI elements related to environmental protection. In Pakistan, on average,

59.4% of MNCs in contrast to 16.9% of listed local companies have written policies. These fi gures reveal

a signifi cant difference between the local listed and multinational fi rms in the two countries in all four

elements.

The fi rst element of environmental protection that is related to environmental protection within the operations

of the organization (EP 1), in comparison to the other three elements, has received more attention from listed local

fi rms in the two countries: 33.3% of the fi rms in Bangladesh and 45.8% of those in Pakistan.

The element that is included in written policies by the lowest number of listed local fi rms is related to allocation

of resources for environmental research and development (EP 4). Only 16.7% of local fi rms in Bangladesh and

6.8% of those in Pakistan have included this element in their written policies.

The results of chi-square test of independence reveal that the listed local fi rms of the two countries are signifi -

cantly different in terms of having written policies on one element that is related to monitoring environmental

protection in supply chain (EP 2). A large number of fi rms (25%) have written policies on this element in Bangla-

desh in contrast to only 5.1% of fi rms in Pakistan.

The chi-square test results reveal that there is signifi cant difference between MNCs operating in the two

countries in two areas, namely environmental protection within operations of the fi rm (EP 1) and environ-

mental reporting practices (EP 3). A large number of MNCs surveyed in Pakistan (100%) have written

policies on the fi rst element as compared against 81.8% of those in Bangladesh. However, more MNCs

(81.8%) in Bangladesh against 45.8% of those in Pakistan have written policies on environmental reporting

practices (EP 3).



Ban

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Diff

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Diff

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CS









Yes

coun

t(%

)Ye

s C

ount

(%)

P-va

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Sig.

D

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Yes

Cou

nt(%

)Ye

s C

ount

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P-va

lue

Sig.

D

iff.

P-va

lue

Sig.

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iff.

P-va

lue

LS 1

Free

dom

of

asso

ciat

ion

1711

0.0

3 <

0.0

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300

.00

< 0

.05

Yes

0.6

8 >

0.0

5N

o0

.88

> 0

.05

No

(77.

3)(4

5.8)

(79.

2)(5

0.8

)LS

2El

imin

atio

n of

fo

rced

and

co

mpu

lsor

y la

bor

with

in t

he

sphe

re o

f in

fl uen

ce

1711

0.0

3 <

0.0

5Ye

s19

300

.00

< 0

.05

Yes

0.6

8 >

0.0

5N

o0

.88

> 0

.05

No

(77.

3)(4

5.8)

(79.

2)(5

0.8

)

LS 3

Form

al w

orke

r re

pres

enta

tion

in d

ecis

ion-

mak

ing

10 7

0.2

5 >

0.0

5N

o19

300

.00

< 0

.05

Yes

0.0

7 >

0.0

5N

o0

.02

< 0

.05

Yes

(45.

5)(2

9.2)

(79.

2)(5

0.8

)

LS 4

Abo

litio

n of

Chi

ld

labo

r w

ithin

op

erat

ions

of

the

busi

ness

en

tity

1711

0.0

3 <

0.0

5Ye

s20

300

.00

< 0

.05

Yes

0.6

8 >

0.0

5N

o0

.60

> 0

.05

No

(77.

3)(4

5.8)

(83.

3)(5

0.8

)

LS 5

Abo

litio

n of

chi

ld

labo

r in

sup

ply

chai

n

10 7

0.2

5 >

0.0

5N

o13

160

.00

< 0

.05

Yes

0.8

4 >

0.0

5N

o0

.24

> 0

.05

No

(45.

5)(2

9.2)

(54.

2)(2

7.1)



LS 6

Non

-dis

crim

inat

ion

1510

0.0

7 >

0.0

5N

o19

320

.00

< 0

.05

Yes

0.2

9 >

0.0

5N

o0

.39

> 0

.05

No

(68.

2)(4

1.7)

(79.

2)(5

4.2)

LS 7

Hea

lth a

nd s

afet

y of

the

em

ploy

ees

17 9

0.0

1 <

0.0

5Ye

s20

310

.00

< 0

.05

Yes

0.2

5 >

0.0

5N

o0

.60

> 0

.05

No

(77.

3)(3

7.5)

(83.

3)(5

2.5)

LS 8

Info

rmat

ion

to t

he

wor

kers

on

HIV

/A

IDS

6 3

0.2

1 >

0.0

5N

o10

60

.00

< 0

.05

Yes

0.7

6 >

0.0

5N

o 0

.31

> 0

.05

No

(27.

3)(1

2.5)

(41.

7)(1

0.2

)

LS 9

Prov

isio

n of

hea

lth

faci

litie

s17

100

.01

< 0

.05

Yes

1930

0.0

0 <

0.0

5Ye

s0

.45

> 0

.05

No

0.8

8 >

0.0

5N

o(7

7.3)

(41.

7)(7

9.2)

(50

.8)

LS 1

0C

apac

ity b

uild

ing

of t

he

empl

oyee

s

17 9

0.0

1 <

0.0

5Ye

s20

310

.00

< 0

.05

Yes

0.0

3 <

0.0

5Ye

s0

.60

> 0

.05

No

(77.

3)(3

7.5)

(83.

3)(5

2.5)

LS 1

1M

onito

ring

m

echa

nism

to

addr

ess

wor

kpla

ce

hara

ssm

ent

15 8

0.0

2 <

0.0

5Ye

s20

310

.00

< 0

.05

Yes

0.2

1 >

0.0

5N

o 0

.23

> 0

.05

No

(68.

2)(3

3.3)

(83.

3)(5

2.5)

LS 1

2C

ompo

sitio

n of

se

nior

m

anag

emen

t w

ith r

easo

nabl

e fe

mal

e/m

ale

ratio

8 4

0.1

3 >

0.0

5N

o 2

00

.02

< 0

.05

Yes

0.0

0 <

0.0

5Ye

s0

.02

< 0

.05

Yes

(36.

4)(1

6.7)

(8.3

)(0

)

LS 1

3R

epor

ting

soci

al

perf

orm

ance

of

the

com

pany

10 2

0.2

5 >

0.0

5N

o 5

20

.01

< 0

.05

Yes

0.3

4 <

0.0

5N

o0

.08

> 0

.05

No

(45.

5)(8

.3)

(20

.8)

(3.4

)

Ave

rage

13.5

7.8

15.8

23(6

1.4)

(32.

5)(6

5.8)

(38.

9)

Tabl

e 5.

Com

pari

son

of M

NC

s an

d lis

ted

loca

l com

pani

es o

pera

ting

in B

angl

ades

h an

d Pa

kist

an in

ter

ms

of h

avin

g w

ritt

en p

olic

ies

on e

lem

ents

rel

ated

to

labo

r st

anda

rds



Ban

glad

esh

Paki

stan

Diff

eren

ce

betw

een

liste

d lo

cal c

ompa

nies

Diff

eren

ce

betw

een

MN

Cs









Yes

coun

t(%

)Ye

s C

ount

(%)

P-va

lue

Sig.

D

iff.

Yes

Cou

nt(%

)Ye

s C

ount

(%)

P-va

lue

Sig.

D

iff.

P-va

lue

Sig.

D

iff.

P-va

lue

Sig.

D

iff.

EP 1

Com

mitm

ent

to

envi

ronm

enta

l pr

otec

tion

with

in

the

oper

atio

ns o

f th

e or

gani

zatio

n its

elf

188

0.0

0 <

0.0

5Ye

s24

270

.00

< 0

.05

Yes

0.4

9 >

0.0

5N

o0

.00

< 0

.05

Yes

(81.

8)(3

3.3)

(10

0)

(45.

8)

EP 2

Mon

itori

ng t

he

envi

ronm

enta

l pr

otec

tion

prac

tices

in

supp

ly c

hain

of

the

orga

niza

tion

156

0.0

0 <

0.0

5Ye

s12

30

.00

< 0

.05

Yes

0.0

1 <

0.0

5Ye

s0

.21

> 0

.05

No

(68.

2)(2

5) (

50)

(5.

1)

EP 3

Envi

ronm

enta

l re

port

ing

prac

tice

185

0.0

0 <

0.0

5Ye

s11

60

.00

< 0

.05

Yes

0.1

9 >

0.0

5N

o0

.01

< 0

.05

Yes

(81.

8)(2

0.8

)(4

5.8)

(10

.2)

EP 4

Allo

catio

n of

re

sour

ces

for

rese

arch

and

de

velo

pmen

t re

late

d to

en

viro

nmen

tal

prot

ectio

n

104

0.0

3 >

0.0

5Ye

s10

40

.00

< 0

.05

Yes

0.1

7 >

0.0

5N

o0

.79

> 0

.05

No

(45.

5)(1

6.7)

(41

.7)

(6.

8)

Ave

rage

Cou

nt15

.35.

7514

.310

(%

)(6

9.5)

(23.

9) (

59.4

)(1

6.9)

Tabl

e 6.

Com

pari

son

of M

NC

s an

d lis

ted

loca

l com

pani

es o

pera

ting

in B

angl

ades

h an

d Pa

kist

an in

ter

ms

of h

avin

g w

ritt

en p

olic

ies

on e

lem

ents

rel

ated

to

envi

-ro

nmen

t pr

otec

tion



Anti-corruption

Table 7 indicates that on average, 70.5% of MNCs in Bangladesh and 64.6% of those in Pakistan in contrast to

12.5% and 16.1% of listed local fi rms in the two countries have written policies on the two GRI elements related

to anti-corruption. The chi-square test results also point out signifi cant differences between the MNCs and the

listed local fi rms of the two countries.

The fi gures in Table 7 indicate that each element of anti-corruption has been integrated into written policies by

more companies in Pakistan as compared to those in Bangladesh. However, the results of chi-square test of inde-

pendence show that there is no signifi cant difference between listed local fi rms of two countries. Similarly, there

is also no signifi cant difference between MNCs of the two countries in terms of having written policies on the two

elements.

The fi rst element of anti-corruption; AC 1, commitment to anti-corruption practices within the operations of the

organization, has been integrated into written policies comparatively by more listed as well as by the MNCs in the

two countries, compared to the second element (AC 2).

Discussion

The comparison of the listed local fi rms of Bangladesh and Pakistan indicates that there is little signifi cant differ-

ence between the fi rms of the two countries in terms of having written policies on the four CSR areas. Multinational

fi rms in Bangladesh as well as in Pakistan are signifi cantly ahead of the listed local fi rms in each country in terms

of having written CSR policies.

A number of commonalities have been observed among the listed local fi rms in Bangladesh and Pakistan. It

has been found that the area of labor standards has been included in the written policies by the largest number

of fi rms of each category, followed by the area of environmental protection. The area of human rights protection

is third while; the area of anti-corruption is last on the list.

The increased sensitivity of the local fi rms to labor standards may be because of the labor laws of the two coun-

tries that cover a number of aspects related to labor issues and make it mandatory for the fi rms to observe those

laws. There are established labor departments for the enforcement of labor laws. There are also labor courts in the

two countries in order to deal with labor disputes. Similarly, the efforts of international intermediaries like the

ILO and NGOs may be one of the reasons for increased sensitivity to labor standards.

However, the labor standards elements that have been given low attention by the fi rms include monitoring and

ensuring the abolition of child labor along the supply chain (L 5), providing information to the workers about

HIV/AIDS (LS 8), a reasonable female/male ratio in senior management (LS 12) and social performance reporting

(LS 13). These elements have largely been ignored, not only by the listed local companies, but also by the MNCs

operating in the two countries.

Other than labor standards, the area of environmental protection has also been included into written policies

by a number of fi rms in the two countries. Some of the possible factors for increased sensitivity to environmental

protection might be related to widespread environmental campaigns at the global level and the dramatic and

unprecedented climatic changes occurring at the globe level (particularly in Bangladesh). Moreover, the existence

of environmental protection laws that require compulsory compliance with environmental standards and increased

pressure from regulatory authorities in the two countries may also explain the increased sensitivity of businesses

to the area of environment in the two countries. Most of the companies have written policies on the fi rst element

related to protection of the environment within the operations of the fi rms (EP 1). The other three equally impor-

tant elements related to monitoring the environmental protection along the supply chain (EP 2), environmental

reporting practice (EP 3) and allocation of resources for environment protection related research and development

(EP 4) are part of written policies of only a small number of local listed fi rms. Moreover, the same elements have

also been ignored by many of the MNCs of the two countries. One of the possible reasons is that the last three

elements are not part of the environmental protection law of the two countries. This again may indicate that busi-

nesses are reactive to laws.



Ban

glad

esh

Paki

stan

Diff

eren

ce

betw

een

liste

d lo

cal c

ompa

nies

Diff

eren

ce

betw

een

MN

Cs









Yes

coun

t(%

)Ye

s C

ount

(%)

P-va

lue

Sig.

D

iff.

Yes

Cou

nt(%

)Ye

s C

ount

(%)

P-va

lue

Sig.

D

iff.

P-va

lue

Sig.

D

iff.

P-va

lue

Sig.

D

iff.

AC

1C

omm

itmen

t to

an

ti-co

rrup

tion

prac

tices

with

in

the

oper

atio

ns o

f th

e or

gani

zatio

n its

elf

184

0.0

1 <

0.0

5Ye

s18

120

.01

< 0

.05

Yes

0.7

0 >

0.0

5N

o0

.58

> 0

.05

No

(81.

8)(1

6.7)

(75)

(20

.3)

AC

2C

omm

itmen

t to

m

onito

ring

and

pr

omot

e an

ti-co

rrup

tion

prac

tices

alo

ng

the

supp

ly c

hain

132

0.0

4 <

0.0

5Ye

s13

70

.04

< 0

.05

Yes

0.6

4 >

0.0

5N

o0

.74

> 0

.05

No

(59.

1)(8

.3)

(54.

2)(1

1.9)

Ave

rage

Cou

nt15

.53

15.5

9.5

(%

)(7

0.5

)(1

2.5)

(64.

6)(1

6.1)

Tabl

e 7.

Com

pari

son

of M

Ns

and

liste

d lo

cal

com

pani

es o

pera

ting

in B

angl

ades

h an

d Pa

kist

an i

n te

rms

of h

avin

g w

ritt

en p

olic

ies

on e

lem

ents

rel

ated

to

anti-

corr

uptio

n



The elements related to human rights protection rarely fi nd a place in the policies of fi rms surveyed. One of the

possible reasons also brought up by Welford (2004, 2005), is that the issue of human rights is underdeveloped

in companies in Asia as well as in Europe. The other possible explanation may be that the areas of human rights

protection and labor standards overlap. Therefore, a comprehensive labor policy may cover a number of aspects

related to human rights protection. Another possible explanation can be found in the perception that it is the state

and not the business sector that should be concerned with human rights.

Anti-corruption measures have been integrated into written policies by very few listed local fi rms in Bangladesh

and Pakistan. This indicates that businesses do not seem interested in anti-corruption measures although cor-

ruption and a lack of transparency are among the most critical issues in the two countries in terms of holding

back a fully functioning market economy. In comparison, a large number of MNCs have written policies on

anti-corruption.

Conclusion

In this study we fi nd very little difference between Bangladesh and Pakistan in terms of the sensitivity of busi-

nesses to CSR. In both countries MNCs have signifi cantly more policies in the four areas examined than the local

listed companies. In most cases (with the possible exception of labor standards in Pakistan) a majority of local

companies do not have policies on the issues examined in this research.

Although MNCs have more policies overall, there still exist areas in which few of them have engaged. Indeed,

few seem to have policies covering gender issues, the formal representation of workers, revenue distribution to

local communities, and eliminating child labor along supply chains. These are very much part of the global

sustainable development agenda but seem to be ignored by many of the MNCs represented in this survey.

Any research based on the type of methodology used here is likely to be prone to survey bias. Companies engag-

ing in CSR are more likely to complete questionnaires about CSR than those companies unaware or disinterested

in the concept. The results produced here almost certainly over-represent our defi nition of sensitivity to CSR in

Bangladesh and Pakistan. On the other hand we must recognize that just because a company does not have a

written policy on certain element of CSR does not mean it is not practised. Anecdotal evidence does suggest that

many companies are responsible and do make efforts to engage with the issues mentioned here even though they

may not say as much.

Whatever, the true picture, our research does tend to suggest that CSR is underdeveloped as a concept in

Pakistan and Bangladesh. This may not be surprising but it is unfortunate in countries where we are seeing

some of the most unsustainable forms of development. Human rights abuses continue, the environment is

being degraded, labor is often subject to abuse and exploitation and anti-corruption is pervasive. This region of

the world has particular problems relating to child labor, yet we see very few companies (even MNCs) taking

a stance on children in their supply chains, for example.

The power of business to contribute to sustainable development through good CSR practices is signifi cant. Yet

in Pakistan and Bangladesh we are seeing only sporadic attempts to drive CSR through written policies. Moreover,

policies are not always enacted and we are left with signifi cant doubt as to whether the business sector is com-

mitted to playing its part in sustainable development. Business has the potential to be the biggest alleviator of

poverty and underdevelopment in countries such as Bangladesh and Pakistan, but whether the companies to be

found in such countries are willing to take on such a role is uncertain given the results of this research.

Convincing companies to adopt CSR policies and practices can be diffi cult, even in the developed world. The

challenge in countries such as Bangladesh and Pakistan is to convince them of the need to do so in very diffi cult

economic context. Companies surveyed for this research seem to be reactive to regulations and legislation and it

may well be that along with encouragement, companies may also need a degree of coercion. Hence a concerted

effort on the part of government to push business into taking on CSR practices may be required. But there must

also be a role for the NGO sector in promoting partnerships with businesses and helping them to deliver a more

sustainable development. NGOs cooperating with this research often demonstrated a better knowledge of CSR

than the private sector.



As ever, different actors have different roles to play in facilitating sustainable development. But our fi nding of

a lack of sensitivity to CSR in Bangladesh and Pakistan points to a lack of ability and/or willingness on the part

of businesses to engage with the developing country challenges to be found in South Asian region.

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a comparative study of corporate social responsibility in bangladesh and pakistan

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