The Covid-19 pandemic has resulted in the ­decline of many economic sectors in Malaysia, including small and medium enterprises (SMEs). The Department of Statistics, Malaysia revealed that SMEs’ contribution to the nation’s gross domestic product in 2021 increased by 1.0%, slower than Malaysia’s GDP, which grew by 3.1%.

The pandemic has also raised global concerns about the ability of governments to continue funding the United Nations’ Sustainable Development Goals (SDGs), thus paving the way for the private sector to play a larger role in the development of SDG-related outcomes.

One effort that can be undertaken is the reframing of the SDGs through a Culture of Health (CoH). Introduced by the Robert Wood Johnson Foundation in 2013, the CoH involves a 4-pillar framework: employee health, consumer health, community health, and environmental health. The CoH is an action framework that improves societal health, well-being, and equity in a diverse society through four action areas: making health a shared value, fostering cross-sector collaboration, creating healthier and more equitable communities, and strengthening the integration of health systems and services. In the framework, businesses and enterprises must collaborate with local health departments and community organisations to align CoH and SDG initiatives.

Awareness of community health is continuously emerging among Malaysian SMEs, with companies identifying the three primary drivers for creating a healthier community as the built environment and physical living conditions; the social and economic environment; and policy and governance. To achieve these drivers, longer-term planning, a larger investment, knowledge, and the right timing are required for effective execution.

Not all SMEs possess the specific resources, technical knowledge, and know-how to implement it. Nevertheless, as a start, these companies can champion community health by undertaking corporate social responsibility (CSR) projects in their business operations. Examples of CSR engagement activities include charitable giving and volunteering, natural disaster relief, refugee upskilling, establishing food banks for marginalised and underprivileged communities, and many more.

When organising CSR engagement activities, it is crucial to consider the actions, policies, and expectations of stakeholders and to align economic, social, and environmental performance to achieve SDG goals. Based on the nature of their businesses and enterprises, SMEs may curate their CSR activities in relation to industries.

In Malaysia, businesses can benefit from tax deductions by donating to registered charitable organisations as announced in Budget 2020. Bursa Malaysia has also mandated all publicly listed companies to disclose their CSR initiatives in their annual reports. Indirectly, CSR projects and initiatives can help companies project a positive image and reputation, enhance brand image and increase their ability to attract and retain the best employees, thus increasing the value proposition of the organisation.

It is also an effective way to help their employees develop people skills and a community-based outreach that can benefit job performance, from enhanced project management and communication skills to employee relations and engagement. Many SMEs have increased their investment in CSR activities to fulfill their vision as well as develop successful business strategies.

Businesses and enterprises are aware that the pandemic has severely affected business activities and resulted in financial instability and business closure, to name a few issues. Furthermore, the Movement Control Orders also restricted movement and volunteering activities to those in need. As a result, SMEs have reduced or even withdrawn their CSR activities due to a shortage of resources and pressure to survive for business continuity.

Reports reveal that many welfare-based and not-for-profit organisations were forced to terminate their volunteer programmes and fundraising events due to public health and safety concerns. Thus, many organisations are running low on funds to alleviate the burden on the poor and underprivileged communities. Nevertheless, many SMEs have continued to reach out to the community and still play a role in helping many in need to overcome this difficult time.

The road to economic and social recovery following the Covid-19 pandemic is not easy. As highlighted by the recently concluded United Nations General Assembly 2022, the world is facing new social, economic, and geopolitical challenges. This is the time for businesses to seize the opportunities emerging from the recovery and the uncertainties. Businesses must consider their enterprise priorities and strategic direction when formulating and implementing CSR initiatives. In the long run, SMEs are encouraged to curate their CSR strategies to be aligned with their business strategies. There is a need to set a clear CSR vision and direction in companies, which will contribute to their achieving market growth and sustainable business.

Ng Siew Cheng
School of Hospitality and Service Management
Email: @email

This article was first published in The Edge Markets, 14 November 2022.