The financial crisis has no doubt put many companies' budgets for corporate social responsibility (CSR) under pressure. Revenues of major international corporations have been hit hard by the tightening of credit and falling consumer demand. The International Monetary Fund expects the global economy to improve and recently revised its forecast of growth next year from 1.9 per cent to 2.5 per cent. But most companies are still taking a wait-and-see approach over allocating more cash to fund CSR projects, according to Hong Kong-based Stephen Frost, executive director at CSR Asia, a consultancy on sustainable business practices. While potential projects have been put on hold, some companies that have started CSR initiatives have chosen to cut back on spending. Despite the uncertain economic outlook, Mr Frost said some companies were keen to go ahead with projects. It is probably a good time for these companies to question where CSR is heading and whether it is time to bring in some changes on how the money can be spent. 'Certainly some companies have viewed CSR as a marketing ploy,' Mr Frost said. 'But I believe spending money on CSR initiatives only makes a marginal change in raising the profile of their brand or promoting an image.' Mr Frost believes, other than marketing a company, there are many aspects of CSR. Product safety, for example, is a burning issue on the mainland and CSR can definitely help to change it. Last year's tainted-milk scandal is only the tip of the iceberg. Mr Frost attributes many of the mainland's product safety problems to an oversight in supply chain management. 'With the best retailers, you can always trace back where the products were produced,' Mr Frost said. 'There are fundamental problems in China. There's a tendency to focus entirely on shortcuts and profit margins.' Many of these scandals were reported only on the mainland. Mr Frost cites pharmaceutical products as an example. Although a health and safety system has been put in place by the mainland authorities, the problem persists due to a lack of governance and transparency. But some companies have been working to ensure that products are safe within the supply chain. Mr Frost has also seen some companies attempting to become more socially responsible by allocating more resources to investigate and evaluate the impact its production will have on local communities. Many improvements in CSR are driven by export demand. Customers in North America and Europe are increasingly concerned about sustainable development and have been asking manufacturers to provide evidence. In the case of manufacturing timber products, for example, many mainland companies have been asked by customers to prove that they are managing plantations in a socially responsible way. Despite the good initiatives, Mr Frost is wary of the impact that the financial crisis will have on CSR in the long term. In particular, the financial services industry might choose to cut spending. However, some mainland enterprises have chosen to continue to meet their CSR targets. Bank of China (BOC), for example, met its obligation set last year by donating HK$313 million from sales of the Beijing 2008 Olympic Games Hong Kong Dollar Commemorative Banknote to charities. A BOC spokeswoman said it would give a total of HK$50 million to the Community Chest for assisting beneficiaries of its member agencies. The bank also made a commitment in 2007 to support this year's East Asian Games in Hong Kong. For some multinational corporations, the financial crisis has had a major impact on meeting CSR targets. 'There has definitely been a complete change in attitude towards allocating resources to CSR in Europe and in the United States,' Mr Frost said. 'Many Chinese companies are either cutting their budget CSR budget or putting projects on hold. It is going to be a tough financial year.'