Over the last several years, North American companies have made corporate social responsibility (CSR) a big part of their business. A Harvard study found corporations spent more than US$15 billion on corporate philanthropy in 2016 and employees donated countless volunteer hours to various causes. Corporate giving in North America will only grow from here, especially as more socially-conscious Millennials start climbing the corporate ladder, but it's not the only area that's embracing CSR. Businesses in Asia are starting to consider it, too.

According to the 2016 Ethical Corporation's State of Responsible Business Report in Asia, 79 percent of executives polled stated their CEO is convinced of the value of sustainability, while 65 percent said sustainability is driving revenue for their business.

Commissioned by RBC Wealth Management, The Economist Intelligence Unit (EIU) undertook a study of 1,051 high-net-worth individuals (HNWIs), including 220 respondents in parts of Asia (China, Hong Kong, and Singapore), from March to May, 2018. The survey explores how the meanings of legacy and wealth are being redefined across regions, genders and generations.

The new face of wealth and legacy survey reveals 54 percent of respondents in Asia believe the ability to create change through charitable giving is more important now, than it was two generations ago. That compares to 44 percent in the West.

Cleary, companies in Asia are taking CSR seriously, but there's still a lot of work to do, says Elsie Lau, director and relationship manager at RBC Wealth Management in Singapore.

Asia, she says, is still “two steps" behind Europe and the U.S. when it comes to CSR, which she defines as donating money and time to causes a company or business owner might support. Many of the businesses in mainland China, Singapore, Hong Kong and other nations are first-generation operations, where the owner has been more focused on building the business than giving back.

As the second generation takes over – the entrepreneur's 20-to-40-something children – more focus will likely be put on CSR-related initiatives. “Most of the second generation is being educated in Western countries, so they're definitely more conscious of giving back," she says. “It will still take a few years, but they're definitely more aware."

In fact, The EIU research supports this belief, with the majority of younger respondents (86 percent) saying they have more opportunity to tackle societal issues, specifically through investing.

Measuring the ROI of CSR adoption

There's good reason for companies around the globe to embrace CSR: It keeps staff happy and it can boost bottom lines. According to research conducted by Project ROI, a group put together to measure the impact of CSR programs, being socially responsible, which includes being environmentally responsible, can increase an organization's market value six fold and shareholder value by US$1.28 billion over 15 years. The organization also found engaging in CSR can reduce employee turnover by 50 percent.

It's these kinds of results that will drive more Asian countries toward CSR adoption, says Brian Li, director and investment advisor at RBC Wealth Management in Hong Kong. “People care about it as long as they get something out of it," he says. Part of that is financial, of course – if CEOs can make the connection between profits and giving back, like many North American executives have, then they'll be quicker to implement a program in their company. However, there's more to it than money, Li says. Employees want to feel good about giving back, too.

Lau agrees. If employees are happy then they'll work harder for their company. One of her clients has an internal scholarship program that pays for staff to study overseas. When they finish their classes, he brings them back to the company where they often work harder than they did before. Some of his employees also want to start their own businesses, which he helps set up. "They know he takes care of them and that builds loyalty," says Lau. "And then they give back to their communities in a similar way."

Changing company culture

One thing companies struggle with is how to implement CSR in a sustainable way, says Li. It's easy enough to do a one-off initiative, like a fundraising drive, but if a business owner wants to see financial and employee benefits, they'll have to change their company's culture, which is easier said than done. “It really has to come from the top," says Li. “And there has to be a culture of giving back, but culture is not easy to change."

If anyone's going to change company culture in Asia, though, it may be the next generation of women leaders. According to The EIU study, 83 percent of Millennial women in Asia, compared to 73 percent of men, believe embracing societal causes have become more important than wealth accumulation in defining a legacy. "I do see more women looking after the CSR aspect of the business," says Lau.

Develop a CSR Plan

What companies can do when it comes to CSR runs the gamut. One of Lau's timber company clients, which operates in Indonesia, has made a point of replanting trees on the land it deforests. It also builds homes, schools and other infrastructure in the area and it assists locals in setting up businesses that might compliment what the company is doing. Li was recently introduced to a children's hospital in Cambodia that raises around US$6 million a year – its entire budget – from corporations, many of which are located in Asia.

Companies that want to give back will need to come up with a plan that accounts for regular giving, says Li. It's not good enough to just cut a one-time check. Money should be earmarked for charity and then be invested in the market so those funds can continue to grow – and then be used year after year. “Set aside some money so it gets reinvested and you can use the interest to donate in a sustainable way and to various causes," says Li. “That's something a bank can help with."

While Asia may not be as far along as other countries, there will be a time when companies of all sizes have a CSR program. “Thanks to the internet, and more access to information, younger generations are more open to different ways of giving back to society," says Lau. “There will be a change as time goes by."

The margin of error on the total Asia sample is 6.6 percent with a 95 percent confidence level.

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