In this article you will get a better understanding of what is Corporate Social Responsibility (CSR) as well as Corporate Social Investments (CSI). Before we go deep, let’s start from the beginning.
From time immemorial, the notion of benefit sharing has always been part of society’s way of living. One-sided gains at the expense of a group will remain a contentious issue. Same concept is expected from publicly (Johannesburg Stock Exchange - JSE) listed conglomerates or multinationals that operates in our communities.
This article is intended to create awareness about community centred initiatives implemented in our country for the benefit of communities. A lot of South Africans have been sleeping on this opportunity that exist in companies when they are approached by a community or a not-for-profit organisation with a request.
It is against this backdrop that the Corporate Social Responsibility (CSR) was introduced to ensure that companies operate in a responsible way socially, economically and environmentally. The South African Companies Act (Act 71 of 2008) and Companies Regulations of 2011 are one of the key legal foundations for the establishment of Social and Ethics Committees to guide the day to day as well as strategic operations of businesses.
Regulation 43 requires that all JSE listed companies, and some state-owned companies establishes Social and Ethics Committees. This is also supported by the relevant and applicable legislations developed to guide operational processes in Corporates.
The aspect of CSR has over the years manifested itself through Corporate Social Investments (CSI) initiatives undertaken by companies in areas where they operate to advance their interests and that of interested and affected communities.
Implementing a fitting and an effective CSI has become a strategic move for companies to demonstrate their social responsibility aspect to government, investors and communities. This also improves brand positioning and showcase their commitment to sustainable development.
Companies develop short, medium and long-term plans to be implemented in identified communities to ensure that they are in line with their CSR and Environmental Social and Governance framework. According to the World Economic Forum (WEF): “ESG is CSR raised to a strategic priority, bringing transparency and accountability into the company’s environmental and social impacts.”
Corporates are expected to allocate at least 1% of their net profits after tax to implement CSI in communities or countries where they operate.
This practice is not restricted to JSE listed companies, any business operating in a community and making a profit, should be able to give back to communities in times of need especially to local non-governmental organisations (NGOs), cooperatives, community-based organisations (CBOs), non-profit organisations (NPOs), faith-based organisations etc.
It’s important that the not-for-profit organisations formalise themselves in terms of their legal standing. They should register with the Department of Social Development and get all the relevant certificates as well as with South African Revenue Services in order to get exemption from paying income tax.
To get the attention of the public listed companies, ensure that the core functions of your NPO aligns with the CSI focus areas of the companies you are approaching for help. For example, if a company is focusing on health care issues for their CSI programs, you may not be successful with them if you come with a request for funding to build a community library or a church. Always look for that alignment, failing which, put a written, well-motivated formal request for consideration by company leadership.
This blog will be publishing more content to provide guidance on which companies are investing in which areas, for instance, agricultural skills development and food production, removal of alien plants to save water, recycling/reuse of waste material, educational programmes, computer labs for schools, financial literacy etc.
Some companies are open to donating funds for public causes, which means that as a community or an NPO, you would want to see company’s short term or once off investments plans (building a park, building a library, a church, drilling a borehole etc.). The long-term plans would include providing bursaries, supporting local SMMEs on procurement strategies (security services, procurement of PPE, catering services, cleaning services, horticulture services etc.) based on the immediate needs of local communities. Companies are urged to source services and products needed for operations locally as much as possible and enhance their local skills development programmes. Communities or community groups should approach companies with request for assistance to take advantage of these opportunities.
Society needs to be alert, informed and monitor the day-to-day activities of the companies that operates in their communities, failing to do so may lead to the operations affecting their lives positively or negatively for generations to come as can be witnessed with the gold mining operations in Johannesburg. Companies need to ensure that their operations are based on responsible and ethical practices.
Communities need to participate in the company’s stakeholder engagement meetings, it is in these forums where formations like NPO or Cooperatives can get knowledge and insights to CSI programs of the companies and how can they benefit from it. In most cases, companies will plan CSI initiatives to be undertaken in communities. To flip the coin, we are saying, provided it’s feasible and within the company’s CSI budget, communities should also use these forums to suggest initiatives that are needed to resolve a social challenge.
Society should always remember that companies are there to make a profit through products sold or services rendered, and they have a responsibility to give back to communities. This is where you or organisation can slot in to take advantage of the opportunities provided by legislation and get assistance.
In the next couple of blogs, we will be profiling community-based formations that were assisted by the companies through in CSI and also profile corporate investments undertaken in communities with the hope that you will learn and duplicate in your community.
The days of one-sided gains where companies would extract commodities from our local areas and disappear at the end of the business’s lifespan should be denounced.
If you have any questions on CSR/CSI initiatives undertaken by various companies, write to us on Admin@csiforsustainability.org we will gladly respond to your query.
Written by Judith N. Mathebane
