Corporates responsible to society

Unlike many countries, there is not much incentive in Nepal for the private sector to fund charities and non-profits. Donations and grants are not tax-deductible.

Yet there are corporate entities that have Corporate Social Responsibility (CSR) in their portfolio of activities through foundations that they have set up. Some do it loudly to gain public relations mileage, while others are quiet about their generous support.

The CSR outlay of factories and manufacturing companies is regulated by Industrial Enterprise Act (IEA), while the Nepal Rastra Bank oversees grants banks and financial institutions contribute and requires them to set aside 1% of their net profit for CSR activities.

The guideline requires banks and financial institutions to donate to activities covering education, health, environment and financial literacy, among others. Recently, the Supreme Court directed the government to formulate a Bill in the parliament to standardise and regulate the private sector’s CSR activities.

“We receive guidelines from Nepal Rastra Bank and follow them,” says Pranisha Shrestha who heads the CSR Department at NMB Bank. “We have got a notice about updates on those guidelines, and we will adapt accordingly.”

Environmental sustainability is one of the important components of CSR for Nepali companies, and there have been many initiatives aimed at urban renewal. One of the most visible is of the telecommunication company Ncell, which is among Nepal’s largest taxpayers.

Five years ago, Ncell adopted a 6km stretch of the Ring Road from Ekantakuna to Koteswor-Kalanki, planting 12,000 saplings. They have now grown into a thick forest along the embankment of the road.

Not only is the lush greenery in an overbuilt part of Lalitpur soothing to the eye, it also helps in reducing temperature within the urban heat bubble, and also contributes to reducing air pollution and traffic noise.

“We started a pilot project along 600m of the Ekantakuna section of the Ring Road during the pandemic,” recalls Bishakha Lakshmi Khadka, Director of Corporate Communications and Sustainability at Ncell. “It went really well, and after that we extended the tree planting and upkeep to Kalanki.”

Sustainability also means making younger Nepalis aware of the value of nature and environmental sustainability, which is why Ncell has also undertaken a Green School initiative in and around Kathmandu Valley. Besides its One-Tree-One-Youth and 1 Million Trees campaigns, the initiative also aims at behavior change about littering with its waste hackathon in schools.

“The young students can be catalysts with a multiplier effect beyond their schools to society at large, and it has inter-generational impact into the future,” explains Khadka.

Indeed, while Nepal has doubled its forest cover in the past 30 years to 46% of the country’s area, urban centres like Kathmandu do not have much open spaces and greenery left. And that is where companies like Ncell, Jawalakhel Group of Industries, and others have focused on CSRs.

NMB Bank also runs financial literacy programs for youth where they can learn more about social media safeguards, digital payment systems, with a focus on safety and security. Such training not only helps build skills for the future but also protects young Nepalis from online crime.

“Threats to young minds through social media use are growing as platforms feed algorithm-driven content,” says Shrestha. “We felt media and digital literacy are important in all seven provinces not just to protect young people, but also give them the confidence to use digital financial systems.”

The bank has a special focus on women in leadership programs, and provides scholarships provided in schools across Nepal on environment and sustainability in higher education. Health is another sector where private companies have worked with donating medical equipment, sponsoring health camps and conducting blood donation drives.

CSR or PR?

Other companies heavily involved in CSR include NIMB Bank which contributes to heritage conservation and education, Buddha Air helps farmers in Morang to increase productivity, VOITH with its motto ‘Little things We Do’ provides scholarships to students and has gifted  vehicles to hospitals and nature conservation groups, Dwarika’s Hotel promotes organic farming and zero waste initiatives, heritage conservation and helps revive traditional handicrafts.

Although some CSR activities have been criticised for masquerading as PR and for greenwashing, many Nepali companies are actually contributing to improve the situation for individuals in need and underserved communities.

It also brings a sense of accountability to the corporate sector so they look beyond shareholder profit with greater involvement in the public good. In Nepal, where government delivery mechanisms are not up to speed in the social sector and environmental sustainability, CSR is a vehicle for public-private partnerships.

Collaboration with the government is an important aspect of these initiatives since that allows localised campaigns to be scaled up by showing what is possible. For example, the three Metropolitan Cities of the Valley and other private companies are trying to emulate what Ncell has achieved on the Ring Road.

“The Ring Road plantation project has been massively successful,” says Khadka “We were recognised by the Lalitpur Metropolitan City and the Forestry Department for adding greenery to what would have been just an asphalt strip.”