Dig deep to make an impact
COMPANIES: A GUIDE FOR CORPORATES TO ADDRESS SOCIAL ISSUES MEANINGFULLY
Corporate social investments critical to successfully doing business in SA.
When it comes to Corporate Social Investment (CSI), Socio-Economic Development (SED) or Broad-based Black Economic Empowerment (B-BBEE), businesses need to dig deeper if they want to make a meaningful, sustainable impact.
Too often, CSI/SED/B-BBEE strategies are set without gaining a full understanding of the real needs of the communities they will directly impact.
As a result, the opportunity to dramatically change lives and add value is lost.
These investments are critical to successfully doing business in South Africa.
B-BBEE compliance can count for 20% to 30% of overall point scoring when it comes to assessing government requests for proposals (RFPs), while in industries such as renewable energy or mining the lack of compliance can cost companies penalties or result in the revocation of their license to operate.
But for many companies, SED investments and achieving BBBEE compliance remains a “tickbox” exercise – a grudge spend that eats into business profits. These companies repeatedly do not reach beyond first-tier discovery to inform their implementation strategies.
What drives the disjunct?
Well-meaning business executives may decide on a theme for CSI or SED investment (let’s build a library or focus on housing) or investments may be driven by Industry Transformation Charters (Supplier Development) or Generic B-BBEE requirements.
While these efforts may be relevant, it may not directly be in line with the needs of the community.
Consequently, the targeted community does not only lose out, but the company will not achieve the expected returns – the growth of local skills and the development of local suppliers to more costeffectively drive the business, and the buy-in of the community.
Want an example?
Consultation with relevant authorities such as municipal structures, community leaders or labour leaders, may identify areas of need or opportunities for valueadding programmes.
Through the engagement with the community, real challenges and opportunities for mutually beneficial improvements or gains may be identified.
For one of Economic Development Solutions’ (EDS’) mining clients the focus of its Social and Labour Plan (SLP) investment strategy seemed straightforward: the rural Limpopo community where it aimed to invest a large portion of its CSI aspect of the SLP budget, had been struggling with intermittent access to water for years. This was also where the local municipality desperately wanted assistance. However, the company radically rethought its investment strategy once it had consulted with the community.
With the closest high school 60km away and no money to pay for transport, a large percentage of the children were not progressing beyond a primary education. The community felt its water struggles could be resolved over time by the municipality; building a school could not wait.
Today, with the construction of two-classrooms, ablutions facilities and an administration room being planned in conjunction with the local municipal structures and the provincial department of education things are looking more positive. The municipality has allocated land, the department has committed to allocating teachers for 2019, the education of a generation of children in this community is secured. The value of this investment is huge for this community – so is the goodwill it secures for the company.
There are numerous examples of misaligned CSI/SED efforts, some of them so misdirected they have led to worker and community protests.
So, how can companies address this potential misalignment and optimise the sustainability and impact of initiatives? It starts with the engagement of all stakeholders.
Conduct an on-the-ground assessment
Do a walkabout and go see what is happening in the community. Speak to people – ask them what they are experiencing, the good and the bad.
Meet with local stakeholders such as church and school leaders, to discuss challenges.
Engage with the municipality’s local economic development (LED) team to understand hot topics and investment is required.
Formal engagement
Have a public meeting with the community – explain your proposal, get inputs and set up a platform for ongoing communication.
Be transparent
Communities are increasingly savvy about economic development investments and want to maximise the benefits. They want to know what the budget is and where the opportunity is for the people in the community – jobs, skills acquisition, local spend. Be transparent about the opportunities and follow through on delivery of any promises.