As South Africans and as an industry generally, we may be missing the mark as to what exactly CSI is – or, as some refer to it, CSR. We’re talking here about corporate social investment or corporate social responsibility. Recently, a senior business editor and I were discussing the meanings of these terms and concluded that they imply a subtle difference in approach.
The CSI Council conducted an in-depth study on the foundations of CSI and CSR in the South African context, coming up with some interesting findings which we’ll highlight in subsequent articles. The bottom line is that we need to define what the terms mean in South Africa; we have our own unique history, realities and challenges which place CSI and CSR pretty much at the centre of all development discourse.
Every conversation I’ve ever had with a CSI manager reveals the incredible variety of ways that people understand the terms, and how their actions are based on the whim and personal understanding of the person in charge. There is clearly no standard for the practise of CSI/CSR – no rule, no policy and no principle holding the idea together.
To move forward into this next phase of development in our country, we in the private sector have to develop a common understanding or standard to which we all subscribe when it comes to corporate responsibility to our society. What are the rules that apply? What government enacted policies unite us? According to which principles do we operate – a general sense of good will, a sense of obligation, a desire to tick a box, or a commitment to effect concrete and lasting positive changes?
I see rules, policies and principles as the missing elements in CSI and CSR today.
Let’s explore the concept of CSI a little. Having worked in this sector for over fifteen years, I am still learning, and found Setlogane Manchidi’s book, Corporate Social Investment – a guide to creating a meaningful legacy somewhat of an eye opener. I had an ‘Aha’ moment when I read the line: ‘There is something about the use of the word “investment” in the term CSI which resonates with me: it implies an expected return on investment.’
So this is how CSI managers see CSI – as essentially a way of investing, of getting something in return for money. But investing has nothing to do with responsibility. These two words imply two different schools of thought, both in life and in business. Investors expect to get something in return. Responsibility proceeds from an awareness that one is in a position of privilege in the midst of poverty. It implies a moral sense; something that goes far deeper than investment.
And in terms of the rule, the rule for corporates in SA is that every one of the them benefitted from apartheid, was complicit in its injustices and was directly or indirectly responsible for the suffering and deaths of millions of South Africans. There is no getting away from this. It is for this reason that government enacted legislation compelling every BIG company – no exceptions – to invest 1% of its net after profits in social projects that directly benefit previously disadvantaged persons.
South African companies have a responsibility to comply with this rule, and yet we still find that many simply baulk at it. Ask many CEOs what they’re doing to fulfil their CSI responsibilities and you’ll get a vague answer. Some BIG organisations have gone as far as shutting down their CSI departments. Doing nothing in the area of social investment is breaking the law!
Clearly, businesses do what they do to get something in return. They have the right to engage in corporate social investment that will yield returns for them. But they also have the responsibility to engage in projects that go further – that give, uplift, develop and educate simply to address the ongoing legacies of apartheid.
How should we structure CSI and CSR?
At the CSI Council we do not yet have all the answers but there is clearly a strong need to develop a model that will enable CSI and CSR to work in symbiosis. For simplicity, we’ll use the term CSI to cover both ideas, as this is the term most commonly used and the one built into the name of the Council.
CSI needs a rule, a policy and a principle that will clearly define how businesses operate.
Most companies which bother to observe the law (and many do not) invest that 1% under the umbrella of investment, not responsibility. They do the bare minimum, and often with a component attached that will bring direct benefits to themselves.
They might, for example, offer scholarships to previously disadvantaged children who are then obliged to work for the company for a set period. Nothing wrong with that – but it’s corporate investment, not corporate responsibility.
Let’s get real. Sappi, a wood fibre company producing wood pulp and paper, cuts down trees in Ngodwana in Mpumalanga, affecting forest biodiversity, weather and local community livelihoods. Because of how they have affected the area, they have a responsibility to those who live there. Accordingly, they plant back into the community in the form of health, welfare, education and environmental programmes. However, their website gives little detail regarding the extent of these programmes; who benefits (employees or others?) how many they affect, and how much of their profits they spend on these programmes. We are not singling Sappi out for censure – they may well exceed their CSI and CSR obligations – but we are pointing out that the missing details give rise to questions.
For businesses, investment comes first, then responsibility. At the CSI Council we intend to see that
- corporate social investment (SED), as legislated by the government, is actually practised to the standard and monetary amounts required and;
- as businesses operating in a highly skewed society, we develop far more of a sense of corporate social responsibility for the people and environments in which we operate.
Perhaps, being South Africa, we may make use of a term that has long, extensive roots throughout society: ubuntu. Through complying with the law we will fulfil our corporate social investment obligation; through digging deep into ubuntu, we may take our businesses and personal lives to the next level, and actually live in a way that acknowledges the past and shows a sense of responsibility towards our neighbours. When we bring a deeper sense of responsibility to our work, we begin to practise corporate social ubuntu.
Corporate social ubuntu
Every South African company has a task to do in addition to making a profit. It has to contribute to addressing the deep fissures of inequality and hopelessness that run deep in our society. It is simply not enough to build the company and imagine that by employing people we are fulfilling our purpose. Corporate South Africa needs to look outward, be specific, be concrete and affect the community around it positively to fulfil it’s responsibilities.
CSI managers are not separate and optional extras to a business. They are integral to the purpose and tasks of the company. The very first task for a CSI manger is to ensure that the 1% rule, as legislated by government, is fulfilled. It does not end there. The next is to look further; to ask, ‘What am I as an individual and what are we as a company contributing to the community from which we draw a small number of workers compared to the size of the community? Where do we show our sense of responsibility as we join with others to develop a better future for us all?’
Or am I all about money?
In the next couple of articles we will further explore the idea of a standardised model that might form the basis of CSI and CSR operations for South African companies. Also consider booking a place at The Great Funders Conference scheduled for 17 to 19 September 2019 at Melrose Arch, Johannesburg, where we’ll delve into this topic from many points of view.
Bye for now and welcome to the second quarter – you might have noticed – we have changed.