Is CSR still relevant in the era of sustainability? — Dalilawati Zainal

Malay Mail

28-07-2025

JULY 28 — As the global business landscape shifts towards sustainability, the role of Corporate Social Responsibility (CSR) is being reassessed in the context of evolving frameworks such as Sustainable Development Goals (SDGs) and Environmental, Social and Governance (ESG). CSR, once viewed as a voluntary business practice primarily focused on charity and community support, is now at a crossroads. With growing pressure on businesses to address climate change, social inequality and governance issues, the question arises: Is CSR still relevant?
In the Malaysian context, where businesses face increasing demands from stakeholders for greater accountability and transparency, the relevance of CSR has never been more critical. As the country works toward its sustainability targets, businesses are seeking ways to align with global frameworks while meeting local stakeholder expectations.
From philanthropy to core strategy
Historically, CSR was viewed as corporate philanthropy focused on donations, volunteerism and supporting local causes. Over time, this narrow view has expanded as businesses recognised the broader economic, environmental and social impacts of their operations. Today, CSR is no longer just a voluntary afterthought, but it is a key element of long-term business strategy.
In Malaysia, the shift from charity-driven CSR to a more integrated and sustainable approach is crucial. Companies are now expected to manage their environmental impact, promote employee wellbeing and support community development and inclusivity. This broader understanding of CSR aligns with the SDGs, urging businesses to contribute to a more sustainable future.
Setting the global sustainability agenda
The SDGs, introduced by the United Nations in 2015, consist of 17 global goals aimed at addressing critical challenges such as poverty, inequality, climate change and environmental degradation. These goals provide a clear and measurable framework for governments, businesses and society to work together towards sustainable development.
With growing pressure on businesses to address climate change, social inequality and governance issues, the question arises: Is CSR still relevant? — Picture by Hari Anggara.
Similarly, ESG reporting has become an important tool for assessing a company's sustainability, focusing on three pillars: environmental, social and governance. With investors prioritising companies with strong ESG performance, businesses are pressured to report their ESG performance transparently. In Malaysia, the Securities Commission and Bursa Malaysia have mandated sustainability reporting for public listed companies, encouraging businesses to align with the SDGs and comply with global standards.
Is CSR still relevant in the era of SDGs and ESG?
CSR has become increasingly relevant in the era of SDGs and ESG, serving as the foundation upon which companies can build their sustainability strategies. By integrating CSR into ESG reporting, businesses enhance transparency and gain the ability to measure their environmental and social impact.
One of the key advantages of CSR is its flexibility. While SDGs and ESG provide structured frameworks, CSR enables businesses to tailor their efforts to suit their unique operations and stakeholder needs. For example, a Malaysian palm oil company might focus on reducing deforestation (SDG 15), while a manufacturing company could prioritise worker welfare (SDG 8).
CSR effectively bridges the gap between global sustainability goals and local business practices, allowing companies to align with international standards while addressing specific regional challenges. This makes CSR an important tool for businesses aiming to contribute to both global and local sustainable development.
The business case for CSR in the sustainability era
Adopting CSR practices that align with SDGs and ESG is not only a moral or regulatory obligation but also a strategic business decision. Studies show that companies with strong CSR and ESG initiatives perform better financially in the long term. By prioritising sustainability, businesses can save costs, improve brand reputation, attract investment and build stronger relationships with stakeholders.
In Malaysia, CSR is increasingly vital for attracting both local and international investors. The government's push for greater transparency, combined with global sustainability trends, means businesses with robust CSR initiatives are more likely to secure investment and consumer loyalty. For example, companies like Nestle, Sime Darby and Maybank have strengthened their market positions through their CSR efforts. Additionally, CSR plays a crucial role in risk management. Companies that neglect environmental, social and governance issues face reputational damage, regulatory penalties and operational disruptions. Proactively adopting CSR strategies helps businesses mitigate these risks and ensure long-term resilience.
Integrating CSR, SDGs and ESG
Despite growing recognition of CSR's importance, many businesses face challenges in integrating CSR with SDGs and ESG. A key obstacle is the complexity of measuring and reporting sustainability efforts. While SDGs provide clear targets, their implementation and tracking at the company level can be difficult. Similarly, ESG reporting standards, such as the Global Reporting Initiative (GRI) and the Task Force on Climate-related Financial Disclosures (TCFD) can be resource-intensive and require specialised expertise.
For small and medium-sized enterprises (SMEs) in Malaysia, limited resources and knowledge may hinder their ability to fully embrace CSR and sustainability reporting. However, with proper support and training, SMEs can gradually integrate CSR principles and report on sustainability efforts to fulfil stakeholders' demand. To support this, the government and private sector must collaborate to provide relevant tools, resources and incentives, making it easier for businesses of all sizes to adopt CSR and align with SDGs and ESG. This includes offering training, guidance and fostering industry collaboration.
Shaping Malaysia's sustainable tomorrow
As Malaysia pursues sustainability goals, CSR is crucial to business strategies. In the SDGs and ESG era, it is a strategic priority. Companies aligning CSR with global standards enhance their reputation and lead responsibly. For Malaysian businesses, integrating CSR with SDGs and ESG unlocks opportunities, fosters innovation and strengthens stakeholder relationships. Adapting CSR strategies ensures long-term success and helps maintain competitiveness in a global market focused on responsible practices.
* Dr Dalilawati Zainal is a senior lecturer at the Department of Accounting, Faculty of Business and Economics, Universiti Malaya, and may be reached at [email protected]
** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.