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CSR can offer a strong role in poverty relief

CSR can offer a strong role in poverty relief

Poverty is an economic condition and applies to those whose income falls below the poverty line, which is the income needed to meet one’s basic needs such as food, water, shelter and clothing. Other factors can be taken into consideration, such as economic stability, income security, and the predictability of an individual’s continued means to meet basic needs. While poverty is something that crosses all borders, countries’ poverty rates can differ widely. The poverty rate is the percentage of adults in a country that fall below the poverty line. Once a country has a high percentage of its population that lives under the poverty line, it can be incredibly difficult to reduce it. To do so would require improving education, health care, and the economy, all of which require money poor countries often do not have. It is also necessary to stress that many nations with a high poverty rate are in conflict. To counter these difficulties, international organizations (such as the United Nations) have started programs to help countries with high poverty rates transition toward peace and pay for improving infrastructure.

Global poverty estimates were updated on March 29, 2023, on the Poverty and Inequality Platform (PIP). This update includes new regional poverty aggregates in 2020 and 2021 for Latin America and the Caribbean, and in 2020 for Europe and Central Asia, and the group of advanced countries. These are the regions for which we now have sufficient survey data available during the COVID-19 pandemic. In total, 113 new country years have been added, bringing the total number of surveys to more than 2,100.

According to World Bank, the countries with the highest poverty rates in the world are South Sudan – 82.30% Equatorial Guinea – 76.80% Madagascar – 70.70%.

Current scenario

Poverty alleviation is one of the most pressing issues in Pakistan too. According to the World Bank, almost a quarter of the country’s population lives below the poverty line. As of 2023, poverty in Pakistan is expected to reach 37.2 percent ($3.65 /day 2017ppp). The rate is slightly below the last observed measure in 2018, which stood at 39.8 percent; however, when accounting for population growth, there are almost 3 million more poor people in the country than in 2018. In Pakistan, the proportion of the employed population below $1.90 purchasing power parity a day in 2021 is 3.7%.

There are several ways in which poverty can be alleviated, including government policies, international aid, and corporate social responsibility (CSR). Poverty alleviation is a critical issue in Pakistan, where a significant portion of the population lives below the poverty line. Several approaches can be taken to address poverty in Pakistan, and corporate social responsibility (CSR) can play a crucial role in poverty alleviation efforts.

CSR refers to a company’s voluntary actions to improve its social and environmental impact. In Pakistan, CSR initiatives can play an important role in poverty alleviation by providing support for education, health, and livelihoods.

CSR leads to short-term costs that do not drive the business toward quick economic benefit, but rather it encourages and emphasizes social and environmental change. In Pakistan, over the next few years, many of the organizations who are already integrating the CSR reports in their annual results would appreciate that at the end of the year, any socially responsible organization can generate a standout CSR report. Nonetheless, it has been shown that most firms in Pakistan do not comply with these regulations and the responsibility of ensuring that these laws are followed and enforced in their true letter and spirit is assigned to the regulatory organizations responsible for their duties. The analysis of this research provides a theoretical framework that contributes meaningfully to the existing knowledge.

One way that CSR can contribute to poverty alleviation in Pakistan is by investing in community development programs. Companies can work with local organizations and communities to identify the specific needs and challenges faced by the community, and then develop programs to address those needs. For example, companies can support education and vocational training programs to help people acquire the skills they need to secure employment and improve their livelihoods.

Another way that CSR can contribute to poverty alleviation is by investing in infrastructure development. Companies can work with local and national governments to identify areas that require investment in infrastructure, such as roads, bridges, and water supply systems. By supporting the development of infrastructure, companies can help to create employment opportunities and improve the quality of life for people living in poverty.

Additionally, companies can support microfinance and entrepreneurship programs to help people start their own businesses and become self-sufficient. Microfinance programs provide small loans to entrepreneurs who might not qualify for traditional bank loans, enabling them to start or expand their businesses. By supporting entrepreneurship, companies can create jobs and help to boost economic

Now a company can contribute to different types of corporate social responsibility (CSR) to improve society ranging from donating money to nonprofits or charitable organizations or implementing environmentally-friendly policies in the workplace.

Corporate Social Investment can give you a competitive upper hand over your competitors and help you to build a reputation as a responsible business. Companies should maintain responsible and ethical policies because they will heavily influence the way customers are going to judge them. At present customers prefer to associate with responsible companies and insist businesses get involved in philanthropy.

Types of Corporate Social Responsibility (CSR)

Corporate social responsibility has been categorized into four types:

Environmental responsibility

Environmental responsibility is when organizations take active measures to promote sustainability and natural conservation. Customers often prefer companies that engage in sustainable packaging or dedicate a portion of profits from a sale to an environmental cause. Companies can implement environmental responsibility in several ways:

For example, an organization pledges to plant 10 trees every time someone purchases their product. They also provide some seeds to their customer with every purchase to encourage them to plant a tree. They speak about this activity through all their marketing channels to increase awareness. To stay accountable to the public, the organization updates its stakeholders with evidence of the woodland they’ve created or rejuvenated.

Ethical responsibility

Ethical responsibility helps the firm set operational policies that are fair. Companies ensure all employees get equal opportunities. The guidelines don’t discriminate against any leader, employee, investor, supplier or customer based on their gender, culture, heritage or religion. These policies help build an inclusive culture in the organization and reflect on the work it does. Some organizations may also set ethical codes to define how it does business and with whom it engages. Such policies help the organization make decisions holistically and invite diverse perspectives in problem-solving.

For example, an organization looking for supplies for its manufacturing unit may refrain from procuring them from an agent who employs child labor. Buying from such a supplier could be regarded as exploiting child labor, and rejecting them could help to reduce its incidence. Doing so also reflects on the company values and how the organization attempts to uphold them. Such values are present in the company policies and imparted to all employees.

Philanthropic responsibility

Philanthropy involves donating a portion of your wealth to an environmental or social cause. Businesses often do this by dedicating a part of their profits to charities and non-profit organizations that align with the company’s values. Some firms may also create charities that focus on a particular cause. Engaging in such activities can help improve society and the environment by aiding research, creating awareness or supporting specific sections of the community. Organizations that run charities or contribute to a particular cause also engage their employees in such activities.

For example, some scientists engaged in finding the cure for a long-term chronic disease don’t have the resources to progress their research. A firm may create a charitable trust and then systematically invest in research on a new vaccine, medication or treatment that may benefit people. They may not be a pharmaceutical company but still engage in activities that can improve the healthcare system.

Economic responsibility

Economic responsibility is an amalgamation of environmental, ethical and philanthropic social responsibilities. Companies engaging in economic responsibility take measures that benefit the business and society. Businesses often do this by merging their business values and financial decisions, keeping in mind the good of the community. Business decisions are more empathetic and go beyond just being focused on profits.

For example, a product manufacturing company may choose to use only sustainable packaging for its products. The company needs to evaluate costs and engage with suppliers who can make this a cost-effective process. It positions the company as environmentally conscious and helps connect with customers. These business decisions reflect the company values, engage the customer and showcase the company’s commitment to the environment.

Corporations, business houses, and entrepreneurs can improve their public image by supporting nonprofits through volunteerism and by making monetary or materialistic donations to build strong partnerships with their consumers and the community alike. When these philanthropic efforts make headlines and get good media coverage, companies increase their chances of becoming favorable in the eyes of their consumers.

Human Psychology says that consumers feel good and satisfied while shopping at institutions that help the community. It is important that CEOs take their companies’ image seriously and set out to incorporate CSR in their business strategies to improve a better relationships with consumers. Companies that demonstrate their commitment to society, humanity, and the environment are perceived as philanthropic and positive which ultimately boosts their long-term growth and profits. CSR ensures their business sustainability even in the future. Companies that are inattentive about their philanthropic responsibilities and have no CSR strategy will soon stand on the verge of becoming nonexistent.

We live in a globalized world where advanced technologies have made our social networking easier than ever. In today’s world, there is no place for selfishness and greed. In order to achieve long-term sustainability and success, we have to work mutually and look after each other’s needs and in this process, we will eventually benefit ourselves.

Overall, CSR initiatives have the potential to make a significant contribution to poverty alleviation in Pakistan by supporting education, health, and livelihoods. However, it is important to note that CSR should not be seen as a substitute for government policies and international aid, but rather as a complementary approach to addressing poverty.

In conclusion, CSR can play a vital role in poverty alleviation efforts in Pakistan by investing, which includes community development programs, infrastructure development, and microfinance and entrepreneurship programs. By working together with local organizations and communities, companies can help to create sustainable solutions to poverty and improve the lives of people living in impoverished areas.

Firms have to incorporate CSR in their operations to achieve a higher level of financial performance, financial stability, and financial inclusion. CSR includes fulfilling ethical, legal, and economic duties. Firms need to incorporate green practices, fulfill all regulatory requirements, take care of employees and society, work on employee and society wellbeing, avoid unethical as well as illegal activities and participate in philanthropic activities to fulfill the CSR aspects. The firms incorporating CSR have a competitive edge in terms of FP, FS as well as FI over firms that are neglecting CSR initiatives

The author, Mr. Nazir Ahmed Shaikh is freelance writer, columnist, blogger and motivational speaker. He write articles on diversified topics. Mr. Shaikh could be contacted at

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