Paying Back in Kind: CSR Activities in the Tobacco Sector

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CSR initiatives are implemented by most tobacco companies - at smaller or larger scales. Tobacco Asia inquires with two merchants at opposite ends of the spectrum.

By Thomas Schmid

Tobacco farmers and their families may be the lowest rung in the supply chain, but they are not forgotten by those whose livelihoods they enable and whose businesses they support through their back-breaking work: the merchants, traders, primary processors, and industry associations out there. The vast majority of them accordingly are maintaining CSR (community and social responsibility) programs to some extent or another. While these programs are entirely voluntary, tobacco firms have long ago recognized their enormous intrinsic value not only for those at the receiving end but also for organic business growth driven by community spirit.

PRESTIGE LEAF

Sending a Positive Message

“CSR projects are important as they send a positive message,” said Flora Lazar, CSR coordinator for internationally-active tobacco trading outfit, Prestige Leaf. “When we give people in our third-world supplier countries access to clean drinking water, basic toilet amenities, electricity, and other necessities that they have been lacking previously, they are overwhelmed that someone should care about them. Any CSR project rests on that pillar – caring.” Meanwhile, the company’s proprietor and managing director, Zafer Atici, presented an almost esoteric reasoning why Prestige Leaf would put such great emphasis on CSR: “In my mind, one of the purposes of life is to share some of the good fortune one has received. By that I mean giving back to the people, to the environment, to the universe, and to protect and improve [them] to the best of one’s abilities.” And that is exactly what charity and goodwill is all about. “It just feels good and gives us pleasure knowing that we are instrumental in changing livelihoods for the better,” concurred Flora Lazar.

Let there be light!

Two of the company’s latest activities, both launched in partnership with well-known Indian merchant firm VST, were the “Solar Street Project” in 2018 and “A Washroom for Every Home” in 2019. “We had the privilege of joining hands with VST in enhancing villages’ and grower families’ living environments through these two projects in parts of Andra Pradesh and Karnataka,” Lazar said. “For a start, we have so far installed 48 solar-powered street lights and 50 washroom facilities in coordination with our partner.” But the projects are ongoing and will gradually illuminate additional village roads and provide modern washrooms to even more village households across the two aforementioned Indian states’ tobacco-growing areas.

“But perhaps my favorite CSR projects are those in which we are involving children,” confessed Atici. “For instance, the company has for the past few years been annually presenting 1,000 tobacco farmer offspring in India with school bags, t-shirts, cricket caps, and other accessories that their parents otherwise could hardly afford for them.”

Modest in scale, yet large in Impact

“I am aware that our projects are modest in scale when compared to what major tobacco companies are pulling off, but they are within our small company’s means,” admitted Atici, adding that Prestige Leaf will “definitely strive to do a lot more in the years to come.” He said he aspired to eventually launch some educational programs of one sort or another, “in particular for youngsters, as well as empowerment programs for rural women.”

“In my view, education and empowerment almost automatically lead to a better future for the underprivileged,” he said. But, for the current year, a tree planting program is in the books for India. “We are going to start out with planting 2,020 tree saplings this year, increasing that to 2,021 saplings in 2021, then 2,022 saplings in 2022, and so forth,” Atici said, explaining the project was designed to not only make villages greener but also help counteract global warming. Lately, some CSR events in Thailand – another supplier country – were organized as well, but that happened on Prestige Leaf’s own accord and without the involvement of VST. For instance, in January 2020 the company sponsored a public running event and donated much-needed stationery supplies to impoverished schoolchildren in the northeastern province of Khon Kaen.

Being meaningful and making a difference

Prestige Leaf annually earmarks between 5-7% of its net profits for CSR projects, according to Lazar. Before deciding on a new initiative, she and her team “analyze what is most needed and has the largest positive impact, but also how relevant a project would be to Prestige Leaf’s positioning as a tobacco trading company.”

“We also study media articles and immerse ourselves in the annual reports by [the NGO] Global Reporting Initiative and UNICEF,” she said, “and the UN’s Sustainable Development Goals report likewise serves us as sort of a guideline.” But whichever projects may be launched, they invariably should be “meaningful and capable of making a difference,” added Lazar. Companies are not merely juristic constructs but consist of real people. “And I strongly believe that the desire to help and care for others is one of the most important traits that make us human.” Things hadn’t been so rosy for the company during its first few years, she admitted, but once the business situation had stabilized and improved steadily, “paying back in kind those who have had a considerable part in getting us where we are today was a natural progression and surely must be the right way to go about it.”

NICOS GLEOUDIS KAVEX

A much broader approach

CSR takes many forms and shapes and can be considerably larger and more complex than what Prestige Leaf accomplishes with its relatively limited funds. Major projects may be dedicated to building entire community schools or hospitals. Other initiatives concentrate on providing farmers with agricultural machinery or fertilizer. Yet others focus on setting up wholesome educational and schooling programs for adults and adolescents alike, or award prestigious scholarships to selected youngsters. CSR doesn’t always have to exclusively be targeted at the grassroots level, either. A wonderful example for a company that applies a much wider spectrum to its CSR activities is Nicos Gleoudis Kavex (NGK), one of Greece’s oldest and largest tobacco merchants, its business reaching to every corner of the globe. According to its managing director, Dora Gleoudis, the company takes a very structured approach, dividing its CSR initiatives into three principal categories: a) “Towards Farmer Communities”, b) “Towards Company Employees”, and c) “Towards City Communities and the Nation.”

“Towards Farmer Communities” comprises benefits like interest–free loans extended by NGK to its contracted farmers with the aim of supporting them in their labor costs and other expenditure associated with cultivating, harvesting, and processing tobacco crops. Further financial support is provided by the company to specific schools in remote mountain villages attended by farmer families’ offspring. “For instance, this year we are expediting these schools’ annual educational trip, the collective destination being Cyprus,” Gleoudis elaborated. The firm has taken out private health insurance for all of its oriental tobacco farmers and their families. As far as category b) is concerned, all NGK employees since 2005 have been enrolled in the company’s bonus fund, and staff facing unforeseeable financial bottlenecks are usually lent a helping hand by the company, too.

“Gifting back what we’ve received before”

Then there is NGK’s extensive engagement in city community as well as the national level. In 1996, the merchant firm was a founding member of the “Cultural Society of Entrepreneurs of Northern Greece” (CSENG), with company president Costas N. Gleoudis having served as a board member ever since. “CSENG was devised as a platform of dialogue concerning cultural aspects but also quality of daily life in northern Greece,” said Dora. “In this respect, the body organizes both national and international annual forums with renowned guest speakers from Greece and beyond.” Last year’s eighth international forum was held in coordination with Germany’s Konrad Adenauer Foundation, the symposium’s umbrella topic being “The World in 2020”.

Furthermore, CSENG in 2018 established an open university in Thessaloniki, where NGK is headquartered. In terms of community service, the society twice a year selects one of the city districts to remove unsightly graffiti from building walls so they can be “returned to the community clean and neat.” Then, since 1992, NGK also has been a member of the “Hellenic Society for the Environment and Civilization” (HSEC; www.ellinikietairia.gr), company president Costas N. Gleoudis having been a board member until very recently. “HSEC was established in 1972 and is active in safeguarding the tangible and intangible cultural heritage of Greece, as well as protecting the country’s terrestrial and maritime environment,” explained Dora Gleoudis. “NGK interprets the term ‘community’ in quite a broader sense that not only includes tobacco farmers and workers but also wider sectors of the community that we are living in,” reiterated Dora Gleoudis.

That approach, she added, was in line with what company founder Nicos Gleoudis had expressed in late 1929 when he said: “We are obliged to give back to society what it has gifted to us before, and that is the motto that we, the second and third generation of the Gleoudis family, have adhered to ever since and which forms the foundation of our CSR engagement,” asserted Dora Gleoudis.

Silencing the Naysayers

Whatever tobacco companies do, it’s almost guaranteed to rub somebody the wrong way. Regardless how selfless and beneficial their CSR engagement may factually be, like clockwork they’re subjected to negative criticism from anti-tobacco lobby ranks. “These programs are nothing but an expression of guilt for exploiting disenfranchised workers and exposing them and their children to that hazardous substance, tobacco,” they may bleat. Sometimes the rhetoric turns out less offensive, sometimes sterner. But it quintessentially always points an accusing finger. Those actively involved in CSR invariably reject the nagging chorus of compulsive naysayers, of course. “Why should we have a bad conscience? We run a legal business and it gives us immense satisfaction to be able to contribute to society within our financial capacity. We do not feel we are doing something extraordinary – nor bad,” remarked Nicos Gleoudis Kavex’s Dora Gleoudis. Prestige Leaf’s Zafer Atici rebutted critics even more outspokenly: “When happy farmers greet you with love and respect during your visit to their village because your company schools their children, reduces the impact of climate change, has provided street lighting or sanitary facilities, and has improved local families’ daily lives overall, there is no outside sound of negativity in the world that would dissuade me from continuing to help.”