CSR in Southern Africa

Africa CEO Roundtable and Conference on Corporate Social Responsibility (AR-CSR) CSR IN SOUTHERN AFRICA AN OVERVIEW AND INSIGHT INTO THE PRACTICE Reana Rossouw Next Generation Consultants

An industry at Cross Road or Tipping Point?

Cross Roads
Companies taking ownership for impact?
Companies trying to mitigate negative impact?
Mining / oil companies offsetting environmental damage through social responsibility (building schools and clinics)
Liquor / tobacco companies offsetting social damage through environmental responsibility (buying carbon credits and planting trees)

Tipping Points
Legislation – forced responsibility
Broad-based Black Economic Act – 1%NPAT
Reporting – forced comparability
Sustainability and Integrated Reporting – Listing Requirement
Pressure – advocacy groups – forced accountability
Wal-Mart Deal – R1 billion Entrepreneurs Fund + Rehiring retrenched workers
Globalisation – the value chain – forced transparency
Suppliers are being watched around the globe – human rights, labour rights, product responsibility rights, corruption and bribery

Misunderstanding about terminology
Corporate Social Investment (CSI)
Philanthropy: percentage of profit that a company donates to social causes
Key drivers: Legal and/or ethical obligations
Corporate Social Responsibility (CSR)
Largely concerned with managing business impacts
Key drivers: Corporate reputation, peer pressure (ratings) and/or ethical obligations
Sustainability
A business approach that seeks to build long-term competitiveness without unduly compromising short-term profitability and cash flows
Strongly informed by an appreciation of the radical transition presently underway across the triple bottom-line including governance & ethics
Key drivers: Enhanced profitability and long-term competitiveness
An approach to creating value that sustains or enhances the systems (e.g. social, environmental, financial and governance) on which that value depends)
Southern Africa context – we are lucky!
CSI/SED is clearly defined – we have bypassed the CSR definition debate and refer to Sustainability rather than CSR

Trends (1) - Regional
South to South exchange (vs. North to South)
Support regional integration (SADC) – cross boarder investment
Growing role of emerging economies (BRICSA) – global partnerships on government level (no trickle down to industry/practice yet)
Role of China in African Investment (Infrastructure)
Major growth in private philanthropy and its profile and birth of new champions /philanthropists/high net worth individuals
Growth in private , community and family foundations – working across borders
New market based approaches to Socio Economic Development

Trends (2) - Market Based Approaches - Innovation
Bottom of Pyramid – BOP - Models
Micro credit movement
Venture philanthropy – Seed Capital
Social entrepreneurs and entrepreneurship
Impact Investment
New players – outsourced, insourced, hybrid, intermediary solutions

Trends (3) – New Influences
Greater emphasis on measurement of impact
(Sustainability reporting – GRI G3.1)
Growth in volunteerism
Global networking, social networks/media
Recession – leverage and extend funds
New patterns in giving
Increasing focus on indigenous giving and community development patterns (poor philanthropist), growing diaspora giving
Quest for sustainability
Definition of sustainability in socio economic development context
Issue of stakeholder engagement
Social baseline studies, research – evidence based development models to clearly understand impact and requirements of stakeholders

Trends (4) - Legislation
Motivation has changed
Compliance with Broad Based Black Economic Empowerment – BBBEE Act
Compliance with industry based regulation
SLP, LED (Mining) & ED (BEE) , Financial Access (Financial Charter), Education
Impact of Johannesburg Stock Exchange Socially Responsible Investment Index (JSE-SRI)
Sustainability Reporting have become Integrated Reporting (King III)
Take Out – Southern Africa (all role-players) has become very sensitive to socio economic development – the value, expectations, requirements and impact

Trends (5) – Financial Crises
Good News
Debate about aid / development effectiveness
Focus more on trade and investment approaches
Policy implementation and systemic reform – focussing on specific issues - education, health, job creation
Multi sectoral partnerships
New developmental models - social impact investing, cause related marketing, industry based investments, large scale, new innovation in program design
More focus on measurement – impact and return

Trends (5) Financial Crises
Bad News
More pressure on developmental assistance
Donors not living up to pledges
Even though growth in community foundations numerous NGO’s closing doors
Project based no operational support
Fewer international donors and development agencies in Southern Africa
Realisation that development takes a long time – which might be a luxury for some
Realisation that development requires many players and includes many facets
More isolated development – less collaboration
More focus on sustainability

Trends (6) - Business
Movement by business into unconventional funding areas
Policy, advocacy, human rights, gender, climate change
Partnerships with government and civil society
Longer term investment and support
Increase in cross boarder giving and global philanthropy – as African companies became more global
Emphasis on ROI and impact
Challenges in enabling environment – compliance focus investment and giving

Trends (7) – Focus Areas
Job Creation
More for Enterprise Development, SME Development, Skills development
Environment
More funding – renewable energy, mitigate impact, carbon off setting/trading, water
Education
Less funding for ECD, Schools, Bursaries, FET and subject specific (Science, Maths, Technology)
Health
Less for HIV/Aids – government refocusing and business follows
Overall
Industry specific funding – Mines – Infrastructure (Schools, clinics), Pharmaceutical – Health/Primary health care, Petroleum – Environmental, FMCG – BOP

Issues
Impact of government funding – social grants
Greater dependency creation, less sustainability, less developmental approaches
Quest for impact and sustainability
How do we define sustainability in SED
Scalability and Collaboration
How do we move from less than $1 to self sufficiency and give hope to the youth
New issues – food security, water scarcity, impact of climate chance
How do we deal with future challenges if we are not meeting today’s requirements and issues

Towards the Future
Innovation and Creativity to solve Africa’s problems
Responsiveness and Responsibility of everyone to solve Africa’s problems
Scalability and Focus to solve particular problems endemic to the African Continent

Thank You Questions Please note: This presentation is part of a larger body of research and knowledge. For more information: www.nextgeneration.co.za [email_address]

CSR in Southern Africa

by Reana Rossouw

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