The Importance of Corporate Social Responsibility

A 2005 profile of the working poor released in 2007 by the U.S. Department of Labor,
shows that 37 Million people in the United States, or approximately 12.6 percent of the
U.S. population, lived at or below the official poverty threshold.1 Of this amount,
approximately 20 percent were actually classified as working poor: those who spent 27
weeks or more in the labor force.2 When this number is expanded to include a
worldview, it is estimated that almost half the world’s total global population, a total of
over 3 billion people, live on less than $2.50 a day.3 Many times, the poor are
underprivileged due to lack of education, job opportunities, depressed economies and
underdeveloped infrastructure in their country.

Personal Responsibility
What can we, or should we do about these statistics, these people? The leaders at
Tulong LLC believe we must act, and we must act now. Why? Because, for-profit and
not-for-profit businesses have the ability to make a positive impact on the lives of the
working poor, by helping to improve working and living conditions for people around the
world. As the proverbial pebble is dropped into the water, the ripple effect will not only
help people, but will work to positively protect our global resources.

Business Philosophy in Action

How can we help to change the face of the earth? Corporate Social Responsibility
(CSR) has worked its way into the fabric of business and society today. Transparency
and accountability as tenets of a business should aid conscious consumers. There is a
large gulf however, between companies that only use CSR as a catch phrase in today’s
green washing world, and those who implement the expectations around CSR as a
business culture.

Taken as a business philosophy, CSR becomes a reality when a company actually

implements self-regulation and monitoring processes to ensure adherence to ethical
standards. These standards would then normally be governed by written and audited
codes of conduct and social compliance by companies who take the commitment to
CSR seriously. It is especially important for businesses to adopt these CSR practices
throughout the entire organization and all processes, or from “cradle to grave.”
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Corporate Social Responsibility

For those unfamiliar with the meaning of CSR, organizations such as International
Finance Corporation (IFC), a member of the World Bank Group, defines CSR as a
business commitment to contribute to sustainable economic development through work
with a company’s employees, their families, the local community and society to improve
lives in ways that are good for business and development.4 Companies can make a
difference by adopting a socially responsible culture.

Global South
Experiences of people from countries such as the United States and Guatemala, for
example, shows what can be referred to as the development gap, or the divide between
North and South. While the United States had it’s own divide between the North and
South some time ago, the common divide today is world-based and focuses on a much
different matter.

There is an old adage that says people or employees do what is measured. More
specifically, H. James Harrington said "measurement is the first step that leads to
control, and eventually to improvement.” With global measures now in place called the
Human Development Index and the Human Poverty Index, it has become more difficult
for people and businesses to turn a blind eye to the working conditions of those in “far
off places.” These measurement indices focus on human development and standard of
living. The measurement itself is not a means to an end. What we do with the
measurement finding is what’s important.

Tulong
Recently, Tulong LLC CEO Mark Heiman met Alan and Christie Brown and discovered
similar values, interests and aspirations. Working together, the concept of creating a
company guided by CSR norms to repair the world began to take shape.

A holocaust survivor and refugee, Mr. Heiman’s grandfather instilled in him that those
who do good, would have a return double in size. His father taught him that it’s not
enough to do well; we have the responsibility to do good. With those long held
generational values, and newfound associates for collaboration, Mr. Heiman and the
Browns began the task of creating a business that could give back to the world, and
possibly even help to repair it.

In this business effort, it made sense for Mr. Heiman to rely on his passion for and
expertise in textiles. Not only is Mr. Heiman a patent-holder and textile innovator in the
field of high-performance sustainable apparel products, he has over 30 years of
executive experience in the textile and apparel industry. He has held senior roles in
operations, manufacturing and product development, and lived and worked in numerous
countries around the globe. Building a business from the ground up has been a
challenge, but not an impossible task; especially when built with the intention of
improving the lives of people in communities around the world.
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The company name chosen by the owners is Tulong, which is the Filipino word for
“help.” The partners were drawn to this simple word to represent their commitment to
help the world by reinvesting a portion of their profits into developing communities. The
hope is that these investments will support and build grassroots, sustainable,
community-based infrastructural projects in addition to creating employment
opportunities in the communities where their products are made.

The vehicle for this effort is the engineering of differentiated apparel that provides
“extreme comfort” for socially responsible consumers who will appreciate fabrics made
from sustainable materials. To create this “apparel with a conscience,” many advanced
fiber, fabric, and associated technologies have been used.

Tulong chose to produce apparel from sustainable fibers and fabrics for the many
advantages they provide versus alternative products in terms of water, chemical, and
energy usage. The manufacturing process is focused on the support of a sustainable
environment. Tulong continues this journey by focusing on improvement opportunities -
identifying technology improvements and using best practices in their business model
and in their business processes.

Examples of Social Entrepreneurship

The desire to give back through the creation of product and service businesses exists in
many parts of the world. For example, Nobel Peace Prize winner, Muhammad Yunus
suggests that poor people are not asking for charity, as it is not a solution for poverty.5
Mr. Yunus notes that the ultimate goal of acting as a hub for social business and action
is creating an end to poverty, so that “poverty museums” would be created by the year
2030 to demonstrate something that had been existence in the past.5 The Yunus Centre
has started with a focus on Bangladesh.

Grameen Bank, also founded by Muhammad Yunus, focuses on microfinancing. By

standing conventional banking practice on its head, Grameen provides credit to the
poorest of the poor in rural Bangladesh, without requiring any collateral. An astounding
97 percent of its almost 8 million borrowers are women, some of whom are now
“formerly” poor.6

Unitus is another organization created to do good in the world. An international nonprofit

organization, Unitus makes efforts to fight global poverty by accelerating the growth of
microfinancing: providing small loans and other financial tools to those in need to
support self-empowerment. Unitus feels that microfinance is most effective when loans
are supported with a range of products and services such as business skills training,
savings programs, and basic insurance plans.7 This type of CSR practice speaks to
“triple bottom line” results which positively affect people, profits and the planet.
Perhaps closer to the Tulong textile products model, Egypt-focused Sekem, which
means “vitality,” is focused on working for sustainable local development. Sekem
produces a variety of consumer products in areas such as natural pharmaceuticals,
organic food, and information technology. Sekem products are made from ingredients
created through biodynamic farming.8
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Business with Conscience

All of these efforts to make incremental change in the world have a basis of
commonality. While some companies may make efforts toward local or global
improvement, without a commitment of a greater level, intentions could fall short. For
example, if an organization produces products whose profits support just causes, but
the process of making those products is not sustainable, or employees suffer from poor
working conditions, then the end does not justify the means.

Social entrepreneurs and businesses wishing to operate within a set of established

guidelines while making a difference, have a law of sorts to live by when espousing the
rules of Social Compliance and employing a clear code of conduct.

Social Compliance agencies are available to provide certification programs, quality

auditing services and plans with corrective actions to help companies comply with
responsibilities of proper practices. In its efforts to set up its business focused on social
action and justice, Tulong looked at best practices in codes of conduct of the World
Bank, Joint Initiative in Corporate Accountability, Workers Rights as well as others.
Tulong is retaining the services of a social compliance agency.

The hiring of Social Compliance Agencies may take aim at such assessments as factory
evaluation, and compliance against benchmarks such as Occupational Safety and
Health Administration (OSHA), International Labor Organization (ILO), Universal
Declaration of Human Rights (UDHR) and other international labor and human rights
standards and conventions. Codes of Conduct should also be established by which to
measure the organization’s or its partner’s and licensees practices. In Tulong’s case,
their code of conduct holds licensees accountable in areas such as non-use of child
labor, non-use of involuntary labor, nondiscrimination, health and safety standards, fair
compensation, hours of work, overtime compensation, disciplinary practices and
environmental impact. In the case where a company has documented codes of conduct,
a social compliance agency can monitor for compliance with local communities in areas
such as labor law on child labor, wages and benefits, hours and overtime, and assess
against the code.

The End Result

So what does it mean to craft a company with a strong social business model, and why
is it important? With the global crises of the working poor and world resource
sustainability, it is Tulong’s position that every company can and must act responsibly.
Corporations can infuse corporate social responsibility into their practices as a way of
doing business. The end result of these actions can lead to global life improvements
and resource sustainability. In the end, there’s one world. We live in it together, and
we’re all finally affected by what happens here. We must repair the world, together.

References
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1. U.S. Department of Labor, U.S. Bureau of Labor Statistics, A profile of the working poor.
http://www.bls.gov/cps/cpswp2005.pdf. Accessed August 24, 2009.
2. U.S. Department of Labor, U.S. Bureau of Labor Statistics, A profile of the working poor.
http://www.bls.gov/cps/cpswp2005.pdf. Accessed August 24, 2009.
3. Poverty Facts and Stats, by Anup Shah, http://www.globalissues.org/article/26/poverty-facts-and-
stats. Accessed on December 16, 2009.
4. International Finance Corporation, World Bank Group member, Corporate Social Responsibility.
http://www.ifc.org/ifcext/economics.nsf/content/csr-intropage. Accessed August 26, 2009.
5. The Yunus Centre, http://www.muhammadyunus.org/. Accessed August 31, 2009.
6. Grameen Bank, http://www.grameen-
info.org/index.php?option=com_content&task=view&id=16&Itemid=112.
7. Unitus, http://www.unitus.com/about-us/mission. Accessed August 31, 2009.
8. Sekem, http://www.sekem.com/english/about/default.aspx?PageID=1. Accessed September 2,
2009.