Wednesday, December 8, 2010

CSR in Malaysia

By Roger Haw Boon Hong

CSR is not a freshly minted idea to Malaysians; the term might be new to some, but not the concept. CSR principles epitomise the fundamental religious and social values that have held together the very fabric of Malaysian society for millennia.

There are some priorities issues have been covered in this context such as community and social welfare aspects, education, environment, workplace practices, culture and heritage. For instance, over 1,000 community and social welfare projects were implemented in 2008, compared to 350 projects in 1998. Studies have shown that the number of students who obtained scholarships for pursuing various levels of education has increased by 300% within the ten year period 1995–2005.

Since 2000, almost 55% of companies in Malaysia have prioritised environmental protection plans in their projects, as compared to only 10–15% in 1980. According to ASRIA’s studies carried out in 2008, 47% of companies in Malaysia are practising good workplace ethics to create a vibrant, healthy environment for their employees. In 1980, only 5% of corporations were willing to support cultural and heritage projects or events, compared to 35% today.

The Ansted Social Responsibility International Award (ASRIA) has helped to raise awareness about the need for business to be legitimate in the eyes of the public. It seems that the number of listed companies reporting environmental information has increased from 30 in 1999 to 138 in 2007. Disclosure of social performance has risen similarly, from 28 companies in 2002 to 43 in 2003. CSR is not only a large company phenomenon. In 2008, 58% of small companies contributed to society ‘in a big way’, as compared to 18% in 1998, a 40% increase within a ten-year period.

A series of prestigious awards such as ASRIA, MESRA, the Prime Minister’s CSR Awards and StarBiz-ICR Malaysia Corporate Responsibility Awards have been recognising companies that have made a difference to the communities in which they operate through their CSR programmes. The percentage of media reporting on CSR has increased from 35% to 45% between 1980 and 2003, and from 45% to 87% between 2004 and 2008.

In the 2007 budget, the government announced that all listed companies are required to disclose CSR activities in their annual financial reports, including their employment composition by race and gender, as well as programmes undertaken to develop domestic vendors. Recognising that the private sector has been successful in implementing CSR projects for the benefit of low-income groups, the government has established a CSR fund, with an initial sum of MYR50 million (USD15 million), to jointly finance selected CSR projects.

Businesses in Malaysia do not operate in a vacuum. They work with multiple suppliers and customers, who in turn have their own sets of suppliers and customers. The listed companies also have to answer to investors. These are parties who can persuade a company to buy into the concept of CSR. Nowadays, the majority of companies in Malaysia have started to put CSR into practice, while many NGOs have been supporting those responsible companies.


This blog is based on the Malaysia chapter in The World Guide to CSR (Greenleaf, 2010) by Roger Haw Boon Hong. Roger is Professor in Corporate Social Responsibility at Ansted University and Founder and Chairman of the Ansted Social Responsibility International Award (ASRIA).