Impact matters - Serious Social Investing 2013
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Impact matters - Serious Social Investing 2013

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Social investment is no longer just about what funders spend.

Social investment is no longer just about what funders spend.

The FirstRand Group's Sizwe Nxasana speaks at the Tshikululu Social Investments Serious Social Investing 2013 workshop.

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  • Brazil ~ 52% (2012)Russia ~ 42% (2010)India ~ 39% (2011)China ~ 47% (2012)
  • Jobs FundAnnounced in Feb 2011 by Pres. Zuma R9 billion fund managed by DBSAAims to address SA’s unemployment More collaboration could increase impact of the fund.Education2013/14 budget for Education – R234 billionPrivate sector contributes less than R2 billion (<1%)Stands to benefit the most from a good quality education systemGlobally private sectors in total contribute less than 0.1% of the profits of the two biggest oil companies, Exxon and Shell.Collaboration between Government and Private Sector would ensure the budget goes further.

Impact matters - Serious Social Investing 2013 Impact matters - Serious Social Investing 2013 Presentation Transcript

  • FirstRand Limited SSI 2013 Sizwe Nxasana
  • Agenda 1. Structural Challenges 2. Corporate Governance 3. Business and Community Development 4. Partnership and Collaboration 5. Conclusion
  • South Africas structural challenges POVERTY SA is still one of the world’s most unequal middle income countries UNEMPLOYMENT EDUCATION one of the world‟s highest gini coefficientsSource: Development Indicators, SA Govt.
  • South Africas structural challenges • Unemployment rate in Q4 2012 was 24.9% (35.9% expanded) POVERTY • Approx 61% of job seekers do not have matric • SAs labour force participation rate is 54.6% UNEMPLOYMENT • World average ~ 64.1%. • Youth unemployment rate ~ 48% EDUCATION • Brazil ~ 18%% • Sub-Saharan Africa ~ 12% • World average ~ 13% • By 2015 more than half of the working age adults will still be out of workSource: StatsSA ; ILO
  • South Africas structural challenges POVERTY Lower unemployment rates associated with higher levels of UNEMPLOYMENT education EDUCATION The rate of unemployment is worse in Free State, Mpumalanga and Eastern CapeSource: Stats SA, Q1 2012 Survey
  • South Africas structural challenges POVERTY 30 37 15 UNEMPLOYMENT EDUCATION % CSI SpendGP 23.3%WC 11.4%EC 7.6%KZN 6.4%MP 4.2%NW 4.2%LP 4.1%FS 2.3%NC 2.0%National 34.6%Source: JET Source : StatsSA
  • South Africas structural challenges POVERTY • Adult literacy rate ~ 89% • While 76% of whites over 20 years old and 62% of IndiansUNEMPLOYMENT have a high school or higher qualification, this figure is only 35% among blacks and 33% among the coloured population EDUCATION • Student participation rate is almost 20% (proportion of 18- to 24-year olds in higher education • Whites 59% • Indians 46% • Coloureds 15% • Blacks 14% Source : StatsSA
  • Agenda 1. Structural Challenges 2. Corporate Governance 3. Business and Community Development 4. Partnership and Collaboration 5. Conclusion
  • Future of Capitalism• Impact of the global financial meltdown • Desperate need for business community • Increased social isolation to • Civic alienation • Repair image • Re-examine value system• Flaw of “Everyman for himself” mindset exposed • Give a “human face” to capitalism• Image of business fraternity damaged • Investors • Customers • Government • General public
  • Significant shift in relationship between privateenterprise and society Ethical Financial Environmental Social imperative Performance Performance Performance towards investors only
  • Proper governance and management focus on social and ethical matters Responsible business Financial Environmental Social conduct and Performance Performance Performance good corporate citizenship• New Companies Act 71 of 2008 • Company acting in a responsible and ethical manner leads to • Came into force May 2011 • Good financial performance in long • Approach sourced from King III Report on run Corporate Governance • Maintaining productive relationships • Shift from „shareowner compact‟ to with government and regulators „stakeholder compact‟ • Requirement to establish • States that reputation is a company‟s most • Social and Ethics Committee significant asset • Social and Advisory Panel to assist • Management and effective stakeholder committee engagement crucial • Ensures proper governance and management focus on social and ethical matters
  • Agenda 1. Structural Challenges 2. Corporate Governance 3. Business and Community Development 4. Partnership and Collaboration 5. Conclusion
  • Why get involved in community development Planet People Profit Customer Employees Society Shareholders Profit / People / Planet (Triple bottom line view) What is good for one is good for the others
  • Why get involved in community development • Meet customer needs • Establish strong customer relationship • Maintain strong consumer value • Sustainability Customer Employees Society Shareholders Profit / People / Planet (Triple bottom line view) What is good for one is good for the others
  • Why get involved in community development • Working conditions • Employee engagement • Reciprocity • Volunteerism Customer Employees Society Shareholders Profit / People / Planet (Triple bottom line view) What is good for one is good for the others
  • Why get involved in community development Customer Employees Society Shareholders • Sustainability • Corporate Citizenship • Brand image Profit / People / Planet (Triple bottom line view) What is good for one is good for the others
  • Why get involved in community development Customer Employees Society Shareholders • Accountability • CSI / Partnerships • Private • NGOs • Government • Society Profit / People / Planet (Triple bottom line view) What is good for one is good for the others
  • Agenda 1. Structural Challenges 2. Corporate Governance 3. Business and Community Development 4. Partnership and Collaboration 5. Conclusion
  • PlanetRationale for collaboration People Profit• Responding to national need to address structural challenges• Taking advantage of the national plans and commitments by key stakeholders i.e. NDP Vision 2030 • Fresh vision for SA future • Useful beacons for guidance • Active Citizenry • Importance of stakeholder consensus and willingness to work together
  • PlanetRationale for collaboration People Profit• Working on increasing value for money • Increasing focus of interventions on priority areas • Eliminate duplication of activities • Increasing collaboration between non-governmental and government interventions • Jobs fund • Education spend • Improving sustainability of the interventions• Promoting integration between reform, transformation and improvement initiatives• Capitalising on the gains of the past 18 years• Addressing systemic challenges in the country
  • Partnership and Collaboration Planet People• Corporate-to-Corporate level Profit • Not much has happened • CSI viewed as competitive • Failure to distinguish between • sponsorship to benefit business • “right thing to do”• Corporate-to-Government level • Trust, a major factor • Foundation to build trust • Value importance of relationship • Develop shared and common vision together • Invest in relationship and nurture it • Honesty is vital • Differences must be understood • Focus on commonalities
  • Partnership with Communities Planet People• Consultative manner Profit • Greater involvement from company • More sustainable solutions for beneficiaries• Need to talk and listen to communities • Understand intricacies of initiatives • Design solutions for the communities • Avoid imposing company/NGO-created solutions• Takes more time to set up, implement and follow through• Benefits of approach • Ensures beneficiaries receive most suitable and sustainable benefits • Easier to gain deeper understanding of involvement areas • Focus through fewer areas of specialisation
  • Agenda 1. Structural Challenges 2. Corporate Governance 3. Business and Community Development 4. Partnership and Collaboration 5. Conclusion
  • Conclusion• Perception of CSI • Hard-earned reputation for flakiness • Today‟s leadership has evolved past this perception • Difficulty linking to concrete tangible outcome• Measurement is key • Measure to understand • Understand to control / monitor • Control / monitor to improve• Impact of CSI • Social value is inseparable from its business value • Business value of initiatives need to be rigorously quantified • Partnership and collaboration on initiatives • Collaboration framework
  • FirstRand Limited SSI 2013 Sizwe Nxasana