CSI and Responsible Business Concepts

In recent years Trialogue has broadened the focus of its knowledge-sharing platforms, including the Handbook and its annual conference, from corporate social investment to the more holistic role of business as an integral part of society. To some extent this shift mirrors the trajectory of a maturing approach to corporate social responsibility in South Africa, with many companies looking well beyond their CSI departments to affect meaningful change in society and some interrogating how their management strategies can address social issues.

Despite considerable advancement in the sector, questions remain about the parameters and overlaps of responsible business concepts. This article unpacks commonly used terms and is intended to help companies map their interventions and to support potential implementing partners to better understand the various responsible business touchpoints to which they can appeal.

Responsible business can propel societal development

Responsible business must permeate all aspects of a company, from ethical operations and value chains, to quality and accessible products and services, responsible marketing, taxpaying, fair employment practices (including diversity, equitable pay and working conditions), respect for human rights and sustainable environmental practice.

There are a plethora of frameworks, codes and standards that coerce business towards greater transparency and societal responsibility. The Global Reporting Initiative Standards, the International Integrated Reporting Council, the King IV Report on Corporate Governance for South Africa, and the FTSE4Good Index refer to concepts such as materiality, stakeholder centricity, and value addition via the six capitals (financial, manufactured, intellectual, human, social and relationship, and natural capital), etc. Despite significant annual effort and resource dedicated
to integrated reporting, we continue to see corporate failures, bloated executive pay, destruction of value and neglect of social and environmental responsibilities. In part, this could be attributed to short- term investor performance horizons, inappropriate reward structures, directors who do not hold executives to account and, at times, blatant fraud and greed that so often go unpunished. While the codes, standards and focus on responsible business are making a positive difference, the pace of change is too slow to make the necessary impact on the socioeconomic pressures faced.

Today’s societal challenges are complex – globally and most definitely in South Africa. Business recognises that a disruptive and unstable socioeconomic environment is not conducive to good business and while some companies are resigned to this situation, others are adopting a more outwardly-focused and visionary response. Such response can take on a number of forms. The most obvious and yet hugely significant contribution is realised when the core business exists or orientates itself to addressing societal needs.

The shared value proposition works well when the core business links neatly to societal benefit. However, this is not always the case and shared value alone will inevitably neglect certain developmental areas. As a result, there remains a critical role for business to address causes and issues that fall outside of their direct value chain or immediate interest. An effective way of doing this is through a ‘corporate voice’ (i.e. corporates advocating for a particular issue or cause). In the past, companies were reticent about being openly critical of government, but this is changing. In South Africa at present, the stakes for business to secure a stable political environment and policy certainty are so high that there is almost no choice but to speak out individually, through a sector body or through a big business grouping. Our CEOs, if they choose, can be powerful advocates for change.

Business can also act collectively and collaboratively with government and other stakeholders to effect change. Over the years we have seen the establishment of initiatives such as the Joint Education Trust and the Business Trust – collective business contributions to tackle difficult social challenges. The YES (Youth Employment Service) initiative is an example of a current collective business response, in partnership with government, to expose unemployed youth to the world of work. What is unique about this initiative is that structures exist that reward corporate participants for supporting the programme (for instance through a BBBEE incentive score). This is a form of collective shared value which shifts the response from one of societal obligation to mutual vested interest.

CSI resources BIS 2019


Striving for systemic change

The role of business in society is multifaceted, complex and evolving. As CSI becomes more integrated with other business in society programmes and the parameters and overlaps of corporate interventions and contributions to society are increasingly blurred, the achievement of greater social impact is in sight. Efforts to collaborate, with organisations bringing their unique competencies and resources together to achieve a common purpose, may be great in theory and difficult in practice, but is essential if we are to achieve systemic change.

Source: Trialogue Business in Society Handbook 2019