His Excellency, The British High Commissioner

Mr Alan Collins

Distinguished guests,

Ladies and gentlemen,

Corporate Social Responsibility or CSR covers a wide spectrum of issues from business ethics, corporate governance and human rights to environmental sustainability and community investment. It also includes employers’ attitudes towards their workforce. Today, more and more companies are beginning to embrace CSR. Many progressive companies recognise that their success hinges on the welfare and stability of the communities they operate in. Such companies understand that caring for employees, for communities and for the environment is not only politically and ethically correct, but it also makes good business sense without which the sustainability of profits and competitiveness will be brought into question.

Companies that have embraced CSR have found real and significant competitive advantages in the form of improved financial performance, enhanced brand image, increased ability to attract and retain a quality workforce, more effective risk management, and reduced long term costs.

Companies that work with their employees and the local communities to improve quality of life adds buzz to the communities. A strengthened and more vibrant community in turn contributes to the sustained growth of their businesses. For example, the Ritz-Carlton Millenia Singapore, and many others in the hotel industry, kept the well-being of their employees as a priority even as the industry struggled due to the Iraq war and SARS outbreak last year. They adopted flexible work arrangements and trimmed other operating costs. Some took the opportunity of the lull period to train their staff. In return, they earned staff loyalty, and hence a motivated workforce that will benefit the organisations in the long term. They understand that in the service industry, it is not possible to have satisfied customers without motivated employees.

CSR efforts allow companies to differentiate themselves from the competition, and add value to their brand. A company’s "brand" is a key intangible asset. But brand value translates to better awareness and sales, especially in a world where consumers, employees and investors are becoming more discerning. Consumers today are increasingly drawn to brands and companies with good corporate reputations. Such reputations can be enhanced if the causes that such companies represent are ethically or socially laudable.

The community at large will also benefit from CSR. Many socially responsible companies embark on employee volunteer programmes and participate in community education programmes. Singapore Airlines, for example, provided funding for the establishment of the Lee Kuan Yew School of Public Policy which aims to train public officials in the region. It also sponsored the Yong Siew Toh Conservatory of Music in NUS to provide aspiring musicians with professional training opportunities.

There are also many benefits for the environment that can arise from CSR. Socially responsible companies take the efforts to ensure recyclability; better product durability, and greater use of renewable resources.

Such companies also integrate environmental management into their business processes. Some go beyond to actively protect the environment. In Singapore, our environment has benefited from such corporations as the Hong Kong Shanghai Banking Corporation (HSBC) which embarked on numerous Care-for-Nature programmes. These included funding for nature conservation activities and environment-related research. HSBC has also initiated educational programmes to bring about greater awareness and concern for our ecosystem.

Today, CSR has a somewhat patchy presence in Singapore. There are various stakeholders advocating different areas of CSR. For example, NTUC advocates CSR from a workers’ perspective while the Consumers Association of Singapore (CASE) promotes CSR from a consumer protection perspective. The Singapore national employers and business federations (SNEF and SBF) and other chambers actively promote various CSR-related programmes to their members. The Ministry of Finance and the Monetary Authority of Singapore advocate CSR from a corporate governance perspective.

SPRING Singapore has also been active in promoting CSR through its Singapore Quality Award programme. This award is the highest accolade given to organisations for business excellence. Part of the assessment criteria measures the degree of responsibility an organisation has to the community and the environment. Organisations which are actively involved in their community, and develop their employees systematically, will strengthen their internal capabilities. Let me highlight some of the initiatives on CSR by two of last year’s SQA winners.

The Civil Aviation Authority of Singapore (CAAS) seeks to be an organisation with a "heart" that contributes actively to the aviation industry, the environment and the community. In 2002, CAAS officially launched a Green Movement Campaign with the goal of being an environmentally friendly airport. In a joint initiative with the Ministry of Environment, colour-coded recycling bins were introduced in both Changi Airport passenger terminals. A recycling contractor was engaged to facilitate the collection and disposal of recycled waste materials. Subsequently, the "Green" movement was extended to include the Food and Beverage (F & B) operators, airport staff canteen operators and the ground-handlers in Changi Airport.

In 2002, CAAS formed a CAAS Community Involvement Committee (CCIC) to better promote and support staff participation in community service activities. The CCIC has adopted the Spastic Children’s Association of Singapore (SCAS) and organised an array of activities to raise funds for the association as well as for other charitable causes.

The second organisation I would like to highlight is 3M, a company renowned around the world for its innovations. 3M has undertaken several initiatives that are beneficial to the environment. These include initiatives to reduce energy use as well as to recycle manufacturing materials. 3M’s "Pollution Prevention Pays" programme helps to raise environmental awareness among employees and encourages everyone to be innovative in eliminating pollution at the source, either individually or in groups. Recently, its recycling of interleaver, a raw material, has effectively put a significant amount of waste each month to economic use. Such programmes has effectively reduced 3M’s waste disposal, which includes hazardous waste, by more than half as compared to that in 1999.

The world at large is also paying increasing emphasis on CSR. An advisory group within ISO has been set up to explore the need for an ISO voluntary standard on CSR. An international conference will be convened in June 04 in Stockholm to examine this issue. SPRING will help to ensure that Singapore-based enterprises are aligned to any CSR standard which is adopted internationally. This in turn will ensure that Singapore’s future trade flows are not hindered by technical barriers arising from international CSR standards.

The individual initiatives on CSR which I have briefly highlighted are beneficial. However, Singapore needs to embrace CSR as a co-ordinated national initiative – to view the issues holistically and address any gaps at the national level. The National Tripartite Committee chaired by Claire Chang, is being launched today. This Committee has an important role to play.

The initiative will provide a forum for collaboration, support and sharing of information among the key CSR stakeholders. It will facilitate the implementation and follow up of CSR through the establishment of sectoral networks or other appropriate groupings. Good CSR practices in Singapore will also be showcased to serve as models for other companies to follow. This tripartite initiative aims to also provide strategic direction and overall co-ordination of the various CSR programmes, such as helping SMEs to adopt good CSR practices.

With this initiative, we have sowed the seeds of a CSR culture in Singapore. I am confident that the Committee will cause Singapore enterprises to think of employees’ welfare, environmental protection and community relations as accretive to long-term shareholder value. This will make Singapore an even more attractive place to live, to work and to play in. All of us should give our fullest support to the CSR initiative.

Thank you.

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24 May 2004