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Corporate social responsibility under fire

Updated: 2009-07-03 07:34

(HK Edition)

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 Corporate social responsibility under fire

Bernard Chan says the financial tsunami has seriously affected the middle class and businesses have donated less money to charities.

The first wave of the global financial tsunami has struck the financial sector badly, says Hong Kong Council of Social Service chairman Bernard Chan, who also runs family businesses in the banking and insurance industries.

As a result of the huge financial pressures and falling demand for investment products, investment banks have offloaded a large number of staff, leaving many unemployed, including a high proportion of middle class people. Among those being laid off are many professionals who specialize in capital financing and mergers and acquisitions since such activities are dwindling.

Two new problems have arisen from the current economic downturn that are having an impact on the sociall welfare sector, Chan told China Daily in an exclusive interview. In the past, only the grassroots needed social service, but this time around, the middle class are also require help from social service.

"We must reach out to the middle class and help them. We provide counseling service to soothe their emotion and there are also middle-class people obtaining food bank service," he said. "Social welfare agencies need to be very proactive in approaching them because they may not know where or lack the initiative to obtain social service."

In addition, many enterprises have streamlined their corporate structure and cut expenditure. As a result, companies have donated less money to charities and social welfare agencies are finding it harder to raise money than before. "It will not be surprising if donations dropped by 10-20 percent this year," Chan said.

Normally, middle-class people have high, stable income to invest, buy properties or send their children to study abroad. But if their stable income is suddenly lost, they will encounter financial problems.

"If they have only short-term problems, they can hold on for some time with their savings. But if they are out of work for a long period, they may be forced to sell their houses or ask their children to come back to Hong Kong," he said. "For middle-class people who have problems, it is really a 'psychological barrier' because they may feel ashamed of obtaining social service."

(HK Edition 07/03/2009 page4)

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