There’s room for improvement in CSR

Melissa Javan

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Skills development should be linked to corporate social investment programmes, Brand South Africa board chairperson Khanyisile Kweyama tells business leaders at the 2016 In Good Company Conference on 30 August. (Image: Brand South Africa)

Engaging with people involved with corporate social investment (CSI) to understand their needs and expectations is one of the guidelines mentioned in a new research report.

The report, The Case for Social Investment in South Africa, suggests that if CSI budgets are spent wisely, it could generate R25-billion worth of the country’s economic activity. Undertaken by the University of Stellenbosch, the report was commissioned by the Nation Builder Trust. The trust found that the South African private sector CSI budget for 2015 amounted to R8,1-billion.

The report suggests that if CSI is done effectively, it has the potential to support 63 000 jobs. It also says effective CSI could generate another R7,7-billion in labour remuneration.

ABOUT THE REPORT

The Case for Social Investment in South Africa was released internally in June 2016, but handed out to delegates at the In Good Company Conference on 30 August 2016. In Good Company is part of an ongoing initiative run by Nation Builder, the conference organisers. Nation Builder is an initiative founded by Muthobi Foundation. It helps companies channel their CSI into initiatives to help build sustainable change in South Africa.

Corporate social responsibility (CSR) reporting in the country still has room for development, according to the report. Its findings are to assist initiatives such as Nation Builder to help businesses to achieve the best possible impact for their CSI programmes.

For example, the report found that in 2014, 72 local companies listed on the JSE’s 2013 Socially Responsible Investment Index were assessed. Based on its latest reporting on CSI, none of these were rated as “excellent” for the overall quality of their reporting. Only 12 of the 72 (17%) achieved a “good rating”.

One of the challenges highlighted was that the companies found it difficult to meet reporting requirements within the limited space allocated to CSI in their annual reports. “An understanding in the business of rationale for CSI is therefore is crucial,” reads the report.

The assessment further shows that only 39% of companies reported on impact assessments.

Apparently the companies acknowledged that it was difficult and expensive to measure and report on the effects of CSI projects and that their budgets often did not allow for this. As a result, many companies relied on anecdotal evidence of the impact of their CSI projects.

THE GUIDELINES

Each company’s strategy will depend on factors such as industry, resources, complexity, core business and location, says the report. “There is no one size fits all approach for successful CSI activities… What works for one community won’t necessarily work for another.”

Brand South Africa board chairperson Khanyisile Kweyama challenged business leaders to go above and beyond to change society for the better. Speaking at the 2016 In Good Company conference, she said: “It’s only when we create sustainable, durable solutions that we overcome challenges.”

She urged corporate leaders to show the way forward by being courageous, tenacious and resilient, reported SouthAfrica.info reported. “Let’s improve the social conditions and build a strong nation brand.”

She suggested that skills development should be linked to CSI and CSR programmes.

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Corporate social responsibility programmes increase employee morale and motivation, according to a Canadian study. (Image: Brand South Africa)

BENEFITS OF DOING GOOD

A survey of Canadian companies, included in the report, Corporate Social Responsibility: Lessons Learned, Natural Resources Canada, found that respectively 70% and 40% of respondents cited “cost savings” and “reduced business risk” as business benefits of CSR.

The authors found more than 50% of respondents noted that their CSR programmes contributed to increased employee morale and motivation, which, in turn, led to higher productivity.

Policies may therefore decrease costs related to employee turnover and performance evaluation, as well as increase worker productivity through better motivation, according to the report.

It said more consumers were taking CSR performance into account and tended to be loyal to companies with a good record. Thus, CSR may entice consumers to buy the company’s products or services.

CSR can also aid to capital. In South Africa, for example, the JSE’s Responsible Investment Index assesses CSI activities and allows investors to invest in companies with good CSR records.

COMPANIES DOING IT RIGHT

While companies in South Africa are already making a positive impact, more can be achieved by strategic and effective spending, according to the local report.

It suggests companies that engage in CSI programmes should make what they are doing as effective and impactful as possible. Best practice principles include engaging with stakeholders, building partnerships, and measuring and communicating outcomes properly.

South African companies putting best practice into action, according to the report, include:

Virgin Active’s Future Crew Programme: It initially donated gym equipment to schools, but expanded to include training learners and adults in underdeveloped communities to become accredited coaches and trainers. Once qualified, they are either employed by schools or absorbed into the business. Community members can also train to become qualified dance instructors, and start their own income-generating studios.

Discovery’s programme to train healthcare workers: It is expected to create 40 000 new jobs by the end of 2016. Discovery has partnered with Umthombo Youth Development Foundation to support youth from rural areas to pursue a health care qualification. A benefit of this programme is that it alleviates the shortage of health care workers and the unemployment problem in the country.