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CSR in Southern Africa


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Presentation Delivered at AR-CSR in Nigeria to share the progress of Corporate Responsibility and Sustainbility in Southern Africa

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CSR in Southern Africa

  1. 1. 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
  2. 2. An industry at Cross Road or Tipping Point?
  3. 3. Cross Roads <ul><li>Companies taking ownership for impact? </li></ul><ul><li>Companies trying to mitigate negative impact? </li></ul><ul><ul><li>Mining / oil companies offsetting environmental damage through social responsibility (building schools and clinics) </li></ul></ul><ul><ul><li>Liquor / tobacco companies offsetting social damage through environmental responsibility (buying carbon credits and planting trees) </li></ul></ul>
  4. 4. Tipping Points <ul><li>Legislation – forced responsibility </li></ul><ul><ul><li>Broad-based Black Economic Act – 1%NPAT </li></ul></ul><ul><li>Reporting – forced comparability </li></ul><ul><ul><li>Sustainability and Integrated Reporting – Listing Requirement </li></ul></ul><ul><li>Pressure – advocacy groups – forced accountability </li></ul><ul><ul><li>Wal-Mart Deal – R1 billion Entrepreneurs Fund + Rehiring retrenched workers </li></ul></ul><ul><li>Globalisation – the value chain – forced transparency </li></ul><ul><ul><li>Suppliers are being watched around the globe – human rights, labour rights, product responsibility rights, corruption and bribery </li></ul></ul>
  5. 5. Misunderstanding about terminology <ul><li>Corporate Social Investment (CSI) </li></ul><ul><ul><li>Philanthropy: percentage of profit that a company donates to social causes </li></ul></ul><ul><ul><li>Key drivers: Legal and/or ethical obligations </li></ul></ul><ul><li>Corporate Social Responsibility (CSR) </li></ul><ul><ul><li>Largely concerned with managing business impacts </li></ul></ul><ul><ul><li>Key drivers: Corporate reputation, peer pressure (ratings) and/or ethical obligations </li></ul></ul><ul><li>Sustainability </li></ul><ul><ul><li>A business approach that seeks to build long-term competitiveness without unduly compromising short-term profitability and cash flows </li></ul></ul><ul><ul><li>Strongly informed by an appreciation of the radical transition presently underway across the triple bottom-line including governance & ethics </li></ul></ul><ul><ul><li>Key drivers: Enhanced profitability and long-term competitiveness </li></ul></ul><ul><ul><li>An approach to creating value that sustains or enhances the systems (e.g. social, environmental, financial and governance) on which that value depends) </li></ul></ul><ul><li>Southern Africa context – we are lucky! </li></ul><ul><ul><li>CSI/SED is clearly defined – we have bypassed the CSR definition debate and refer to Sustainability rather than CSR </li></ul></ul>
  6. 6. Trends (1) - Regional <ul><li>South to South exchange (vs. North to South) </li></ul><ul><li>Support regional integration (SADC) – cross boarder investment </li></ul><ul><li>Growing role of emerging economies (BRICSA) – global partnerships on government level (no trickle down to industry/practice yet) </li></ul><ul><li>Role of China in African Investment (Infrastructure) </li></ul><ul><li>Major growth in private philanthropy and its profile and birth of new champions /philanthropists/high net worth individuals </li></ul><ul><li>Growth in private , community and family foundations – working across borders </li></ul><ul><li>New market based approaches to Socio Economic Development </li></ul>
  7. 7. Trends (2) - Market Based Approaches - Innovation <ul><li>Bottom of Pyramid – BOP - Models </li></ul><ul><li>Micro credit movement </li></ul><ul><li>Venture philanthropy – Seed Capital </li></ul><ul><li>Social entrepreneurs and entrepreneurship </li></ul><ul><li>Impact Investment </li></ul><ul><li>New players – outsourced, insourced, hybrid, intermediary solutions </li></ul>
  8. 8. Trends (3) – New Influences <ul><li>Greater emphasis on measurement of impact </li></ul><ul><ul><li>(Sustainability reporting – GRI G3.1) </li></ul></ul><ul><li>Growth in volunteerism </li></ul><ul><ul><li>Global networking, social networks/media </li></ul></ul><ul><ul><li>Recession – leverage and extend funds </li></ul></ul><ul><li>New patterns in giving </li></ul><ul><ul><li>Increasing focus on indigenous giving and community development patterns (poor philanthropist), growing diaspora giving </li></ul></ul><ul><li>Quest for sustainability </li></ul><ul><ul><li>Definition of sustainability in socio economic development context </li></ul></ul><ul><li>Issue of stakeholder engagement </li></ul><ul><ul><li>Social baseline studies, research – evidence based development models to clearly understand impact and requirements of stakeholders </li></ul></ul>
  9. 9. Trends (4) - Legislation <ul><li>Motivation has changed </li></ul><ul><ul><li>Compliance with Broad Based Black Economic Empowerment – BBBEE Act </li></ul></ul><ul><ul><li>Compliance with industry based regulation </li></ul></ul><ul><ul><ul><li>SLP, LED (Mining) & ED (BEE) , Financial Access (Financial Charter), Education </li></ul></ul></ul><ul><ul><li>Impact of Johannesburg Stock Exchange Socially Responsible Investment Index (JSE-SRI) </li></ul></ul><ul><ul><li>Sustainability Reporting have become Integrated Reporting (King III) </li></ul></ul><ul><li>Take Out – Southern Africa (all role-players) has become very sensitive to socio economic development – the value, expectations, requirements and impact </li></ul>
  10. 10. Trends (5) – Financial Crises <ul><li>Good News </li></ul><ul><ul><li>Debate about aid / development effectiveness </li></ul></ul><ul><ul><li>Focus more on trade and investment approaches </li></ul></ul><ul><ul><li>Policy implementation and systemic reform – focussing on specific issues - education, health, job creation </li></ul></ul><ul><ul><li>Multi sectoral partnerships </li></ul></ul><ul><ul><li>New developmental models - social impact investing, cause related marketing, industry based investments, large scale, new innovation in program design </li></ul></ul><ul><ul><li>More focus on measurement – impact and return </li></ul></ul>
  11. 11. Trends (5) Financial Crises <ul><li>Bad News </li></ul><ul><ul><li>More pressure on developmental assistance </li></ul></ul><ul><ul><li>Donors not living up to pledges </li></ul></ul><ul><ul><li>Even though growth in community foundations numerous NGO’s closing doors </li></ul></ul><ul><ul><li>Project based no operational support </li></ul></ul><ul><ul><li>Fewer international donors and development agencies in Southern Africa </li></ul></ul><ul><ul><li>Realisation that development takes a long time – which might be a luxury for some </li></ul></ul><ul><ul><li>Realisation that development requires many players and includes many facets </li></ul></ul><ul><ul><li>More isolated development – less collaboration </li></ul></ul><ul><ul><li>More focus on sustainability </li></ul></ul>
  12. 12. Trends (6) - Business <ul><li>Movement by business into unconventional funding areas </li></ul><ul><ul><li>Policy, advocacy, human rights, gender, climate change </li></ul></ul><ul><ul><li>Partnerships with government and civil society </li></ul></ul><ul><ul><li>Longer term investment and support </li></ul></ul><ul><ul><li>Increase in cross boarder giving and global philanthropy – as African companies became more global </li></ul></ul><ul><ul><li>Emphasis on ROI and impact </li></ul></ul><ul><ul><li>Challenges in enabling environment – compliance focus investment and giving </li></ul></ul>
  13. 13. Trends (7) – Focus Areas <ul><li>Job Creation </li></ul><ul><ul><li>More for Enterprise Development, SME Development, Skills development </li></ul></ul><ul><li>Environment </li></ul><ul><ul><li>More funding – renewable energy, mitigate impact, carbon off setting/trading, water </li></ul></ul><ul><li>Education </li></ul><ul><ul><li>Less funding for ECD, Schools, Bursaries, FET and subject specific (Science, Maths, Technology) </li></ul></ul><ul><li>Health </li></ul><ul><ul><li>Less for HIV/Aids – government refocusing and business follows </li></ul></ul><ul><li>Overall </li></ul><ul><ul><li>Industry specific funding – Mines – Infrastructure (Schools, clinics), Pharmaceutical – Health/Primary health care, Petroleum – Environmental, FMCG – BOP </li></ul></ul>
  14. 14. Issues <ul><li>Impact of government funding – social grants </li></ul><ul><ul><li>Greater dependency creation, less sustainability, less developmental approaches </li></ul></ul><ul><li>Quest for impact and sustainability </li></ul><ul><ul><li>How do we define sustainability in SED </li></ul></ul><ul><li>Scalability and Collaboration </li></ul><ul><ul><li>How do we move from less than $1 to self sufficiency and give hope to the youth </li></ul></ul><ul><li>New issues – food security, water scarcity, impact of climate chance </li></ul><ul><ul><li>How do we deal with future challenges if we are not meeting today’s requirements and issues </li></ul></ul>
  15. 15. Towards the Future <ul><li>Innovation and Creativity to solve Africa’s problems </li></ul><ul><li>Responsiveness and Responsibility of everyone to solve Africa’s problems </li></ul><ul><li>Scalability and Focus to solve particular problems endemic to the African Continent </li></ul>
  16. 16. Thank You Questions Please note: This presentation is part of a larger body of research and knowledge. For more information: [email_address]