Corporate social responsibility at a crossroads
From being a ‘mindset’ it must become a ‘heartset’
WITH A MULTITUDE of focus points suddenly starting to appear on the agendas of large companies, the broad South African landscape of corporate social responsibility has now reached a crossroads, says Professor Derick de Jongh, director of Unisa’s Centre for Corporate Citizenship.
Such items and issues come from various directions and currently have a particularly strong socio-political bias, especially if you consider the events earlier this year concerning the Public Investment Corporation and Barloworld, as well as Brian Molefe’s latest focus on the JD Group.
“You wouldn’t know what he has in his sights next, but there are serious speculations that the face of business in SA has already changed irreversibly,” De Jongh says.
All the issues SA companies are currently being confronted with are bringing them to a point where they’re trying even harder to comply mindlessly rather than trying to do so mindful of the broader legislation and trans- formation frameworks, De Jongh says. “The more pressure there is on companies from different directions the more issues concerning responsible organisations come to the fore, and the more they start getting a political colouring the harder mindless compliance will be driven, because it’s a form of risk and reputation management and a company’s licence to function is suddenly no longer legislation-bound. At least that’s currently the case.
“Whereas companies were formerly legally bound to comply they’re now confronted with aspects that aren’t necessarily covered by regulations, such as the entire issue surrounding climate change and global warming, and they find it very difficult to cope, because there’s no clear legal framework yet.”
However, a serious call has been sent to the business sector to become much more involved in debates concerning the problem and CEOs should take note of that, he emphasises.
Banks’ reactions to the entire issue concerning credit legislation and consumer protection against excessive credit extension by issuing a code of conduct are nothing but good corporate social responsibility.
“The question is why it took the bank sector so long to realise they had to do something. It looks as if this step isn’t morally motivated but purely a commercial decision. The bank sector realised that if they didn’t ‘protect’ the market by applying more responsible credit extension there might not be any market left for them to sell their products to.
“However, if other companies can see the relationship between their own corporate social responsibility and what the banks are doing then a business case of responsible corporate citizenship will indeed have been created. That’s important, and it immediately puts the moral debate in financial terms.”
Unfortunately, SA also lacks consumer activism, says De Jongh. The latest “poisoned spices” saga is a good example: there’s no evidence of a single SA consumer protesting at a shop or supermarket that stocks such products. However, the same incident in, say, Britain would have resulted in large-scale protests. But it’s encouraging to see the media increasingly playing a watchdog role concerning corporate responsibility, De Jongh says.
In response to the negative media exposure a spice manufacturer placed several newspaper advertisements emphasising that their products are “clean”. The company presumably paid thousands of rand to convey that message – which it was supposed to have done in the first place. That creates mistrust with consumers, De Jongh says.
“You mustn’t spend money to tell the consumer how good and ethical you are – just do it. However, companies often get away with murder and it’s not as if they now suddenly want to enter the moral high ground. They realise it’s a matter of survival.”
For example, concerning climatic change a bank should be responsible for determining a potential business client’s sense of responsibility regarding aspects such as waste management, pollution, recycling and fair wages before credit extension is granted, De Jongh says.
“In the retail sector, Woolworths is at the forefront in providing its customers with environmental information concerning its products and fair trade. If all the Woolworths of this world were informing and educating the consumer so that the latter puts his foot down it would be a great step for responsible corporate citizenship.”
In fact, De Jongh says a positive wave is already building up that will force companies to go beyond the crossroads and advance from mindless compliance to doing so in a sober and considered manner.
And instead of just a “mindset” it must become a “heartset”.
From mindless compliance to doing so in a sober and considered manner. Derick de Jongh