Jorge Arlitt, Editor y Community Manager. Responsabilidad Corporativa y Sostenibilidad de Telefónica S.A.
Corporate Social Responsibility (CSR) is a force that is on the increase. Increasingly, companies are realising that investing in communities and institutions makes progress possible. Through education, CSR is beginning to make a difference in the lives of millions of people, because without the appropriate educational opportunities, children cannot develop their full potential, whichhas far-reaching consequences.
However, opportunities are not always adequately provided, due to the framework of the global market, which is in constant evolution, and the geopolitical struggle in which many businesses are involved.
The recent study Business Backs Education shows that overall CSR spendingof companies in the “2013 Global Fortune 500” is 20 billion dollars per year. The report has identified 218 companies that have education-related expenses, which amounted to 2.6 billion dollars, which equates to 13% of the total CSR budget of the Global Fortune 500″ list.
If Global Fortune 500 companies committed 20% of their CSR budgets on initiatives aimed at education, the total expenditure in this area would double to nearly 4 billion dollars. This would be very significant, as there are currently 58 million school-age children out of school. If properly aimed, the 20-per-cent increase in expenditure of the CSR budget on education would enable more than 3 million children per year throughout the world to go to primary school.
We need to focus on needs-based initiatives. The study shows that when companies spend outside their country, they tend to do so where their commercial interests are aligned with their corporate responsibilities, and not in those areas where it is really needed: only two out of every five dollars spent by the companies on the Global Fortune 500 list on CSR education is spent in the countries and groups that need it most. Most of the total expenditure is in “non-priority” areas within North America and Europe. Thus, for example, spending on education in priority areas such as Africa, where the need is by far the largest, is only 1 billion dollars. This may limit the extent to which we can benefit the most needy.
The largest proportion (62 %) of the world’s CSR expenditure comes, mainly, from in-kind donations of free software to universities and schools, and pharmaceutical products and free drugs from a handful of US companies. Just three Global Fortune 500 companies – Oracle, Halliburton and AstraZeneca – contribute more than 1 trillion dollars spending on CSR. However, only a few of the largest spenders contributed significantly to education: Banco Santander, IBM and Telefónica ranked top globally.
Given that educational needs are so urgent – particularly in priority areas and developing economies – it is more important than ever to ensure that we make better use of resources. Only efficient spending will promote a well-educated global citizenry and enable children in vulnerable situations to maximise their opportunities.
There are two trends that dominate when it comes to financing the education sector: American companies giving scholarships to its own higher education, and financial services companies offering financial education programs. These may not be priority areas from a global point of view. We should, then, integrate philanthropy more strategically into business models, ensuring that CSR activity is aligned with real needs, thinking long-term and coordinating with external organisations effectively.