Corporate Social Responsibility (CSR) was never meant to be a government initiative. It should be a voluntary endeavour. A company recognises a social or environmental challenge relevant to its business, stakeholders, or local communities, and chooses to allocate resources to tackle it. This action is driven not by legal obligation but by the understanding that responsible companies see their role in society as more than just profit-making. This is the ideal situation.
Bangladesh, however, faces a practical problem. Voluntary CSR has not yet become strong or widespread enough to address the scale of our social and environmental challenges. Many companies do good work, but many others do little, do so irregularly, or do so only when an opportunity for visibility arises.
Against that backdrop, the proposed National Corporate Social Responsibility Policy 2026 is understandable. The draft requires certain companies, including listed ones, banks, financial institutions, insurers and others, to allocate at least one per cent of their previous year's pre-tax profit to CSR. It also introduces reporting requirements, board-level responsibility, CSR committees for larger companies, and restrictions on expenditures that should not qualify as CSR.
This is a good move -- but only if the relevant companies are careful about their objectives. The objective should not be to make companies spend money. It should be to encourage more companies to take responsibility. That distinction will determine whether the policy becomes a meaningful one or simply another compliance exercise.
Not a substitute for voluntary responsibility: Ideally, CSR should remain voluntary. Once the government sets a minimum spending requirement, there is a clear risk that companies will treat CSR as another regulatory obligation. The question in the boardroom could become, "How much do we have to spend?" rather than, "What can we do that will genuinely make a difference?"
That would be an unfortunate outcome.
Yet there is little point in defending an entirely voluntary model when voluntary action has not delivered the level of corporate contribution that society needs. If we have not been sufficiently good at doing good voluntarily, a minimum requirement can provide a useful nudge.
The proposed 1 per cent should therefore be seen as a floor, not as the definition of responsible business.
A company that spends exactly one per cent and treats the exercise as a compliance requirement should not necessarily be considered more responsible than one that voluntarily invests substantially more in well-designed, high-impact programmes. The policy should set a minimum expectation while preserving companies' motivation to go beyond it.
But why pre-tax profit: There is also an important question regarding the proposed calculation. The draft uses pre-tax profit as the basis for the one per cent contribution. It may be worth considering net profit after tax (NPAT) instead.
Tax is already a statutory contribution a company makes to the state. CSR is intended to represent an additional corporate commitment to society. Calculating the CSR obligation after tax would therefore create a clearer conceptual distinction between the two.
If CSR is treated as an allocation from corporate profit, NPAT is the more logical basis: the company first fulfils its statutory obligation to the state, then allocates a portion of the remaining profit to social and environmental priorities.
There is also a practical consideration for banks and financial institutions, which have traditionally operated under Bangladesh Bank's CSR guidelines. Greater consistency in the calculation basis would make the overall regulatory environment easier for companies to navigate.
The question, therefore, is not simply whether companies should spend more. It is also whether the policy has chosen the most appropriate basis for determining contributions.
Not every company should do everything: The draft CSR policy identifies 19 priority areas, including education, healthcare, poverty reduction, support for women and children, support for persons with disabilities, environmental protection, climate change, disaster management, entrepreneurship, agriculture, research and innovation, culture, and road safety.
These are all critical areas of national need. But that does not mean every company should be required to work in all of them. In fact, doing so could weaken CSR.
A bank may be uniquely positioned to support financial inclusion, women entrepreneurs, financial literacy, or access to finance. A pharmaceutical company may have greater expertise in healthcare. A technology company can make a stronger contribution to digital inclusion. An agricultural company may be better equipped to support farmers' livelihoods and climate resilience. A manufacturing company may have a natural opportunity to improve the lives of communities around its operations.
The policy should, therefore, provide an open field within broad national priorities. Companies should be encouraged to identify the areas where their expertise, resources, networks, and business footprint enable them to have the greatest impact -- not everyone should do everything.
Everyone should contribute, but companies should be allowed to choose where they can contribute most effectively.
This is particularly important because meaningful CSR is usually built on depth, not breadth. A company that spreads its CSR budget across 15 different areas may be able to claim that it has "covered" many issues while creating little lasting change in any of them.
A company that spends the same amount on a single, carefully designed, multi-year intervention may create considerably greater social value.
Don't make companies abandon what already works: There is another risk that policymakers should consider: discontinuity. Many companies have worked with communities for years. They may have scholarship programmes, livelihood initiatives, environmental programmes, disability-inclusion projects, or disaster-response mechanisms that have taken considerable time to build.
A new policy should not inadvertently encourage them to abandon these engagements simply because their existing programmes do not fit neatly into a newly designed framework.
The policy should, therefore, recognise continuity and long-term commitment as strengths. Existing credible programmes should be permitted to continue, provided they meet the policy's principles of transparency, relevance and accountability.
Measure what changes, not what is spent: The biggest opportunity in the proposed policy is to improve the quality of CSR reporting. A CSR report should not become a catalogue of cheques, events, photographs and beneficiary numbers. "Ten thousand people reached" tells us very little.
How many of those people are better off? How many students improved their learning? How many entrepreneurs increased their income? How many persons with disabilities obtained meaningful employment? How many trees survived? How much water was saved? How did household resilience improve?
The policy should encourage companies to move from activity reporting to outcome reporting. At the same time, we should be realistic. Not every social intervention can demonstrate a precise financial return or an immediate measurable outcome. CSR should not become so bureaucratic that smaller, innovative initiatives are discouraged.
The answer is proportionate accountability: greater scrutiny for larger spenders and larger companies, while keeping the system practical enough to encourage experimentation.
CSR is not a substitute for responsible business: There is one principle that should take precedence over the entire policy. CSR cannot compensate for irresponsible business practices.
A company cannot pollute a river and then claim responsibility for doing so simply because it planted thousands of trees or met its CSR spending target. It cannot mistreat workers and compensate by funding scholarships. It cannot sell an unsuitable product and call itself socially responsible simply because it donated to a hospital.
How a company earns its revenue is as important as how it spends its CSR budget.
Let the government set the floor: Bangladesh now has an opportunity to advance CSR to a more mature stage. The government can require a minimum contribution. It can establish transparency standards. It can prevent companies from disguising advertising, routine business expenditure or legally mandated obligations as CSR. It can require credible reporting. It can discourage greenwashing. It can ask boards to take responsibility for the quality of corporate social investment.
But beyond that, it should leave room for companies to innovate. The government should not decide that every company must solve every social problem. It should not make a corporate foundation the default mechanism. It should not encourage companies to abandon long-standing programmes to meet a new template.
And it should not confuse expenditure with impact. Perhaps the most useful test of the policy is therefore not "Did the company spend 1 per cent?" It is "Why did the company spend it, what did it achieve, and will it continue?"
CSR should have remained voluntary. But if Bangladesh needs a regulatory push to make corporate responsibility more widespread, there is nothing inherently wrong with that.
The challenge is to ensure that the push does not become a straightjacket. Let the government set the floor. Let companies choose their purpose. Let partners help deliver the work. Let successful programmes continue. And let society judge the impact.
