Corporate social responsibility in Cambodia
Frontier and emerging economies such as Cambodia present companies with a specific set of challenges and risk, both real and perceived, beyond those found in more developed markets. A risk category getting ever- increasing attention is that of “social risk”, roughly defined as the risk of waking up one morning to find your company’s name in the media for the wrong reasons. Such unhappy media events present risk to the investor’s reputation or a company’s brand as a result of investment or operations in a given market. These risks are why all of the tuna sold in North America and Europe is marked as “Dolphin Safe”. Unlike traditional business risk, where high risk results in a higher required rate of return, social risk tends to be a bipolar event, wherein a company will simply deem a market too risky to consider investment, even at high rates of financial returns. Multinational branded firms and institutional investors including pension funds, insurance companies and university endowments are particularly sensitive to these issues, and for good reasons. As has been demonstrated in case after case involving household brand names, how a company shows up in the media matters a great deal. …
