Fundamental principles behind CSR, social and economic rationale, key themes that need to be considered by a manufacturing company in developing a policy and implementing CSR in South Africa. How CSR can be incorporated into the governance structures of your company.
According to Financial Times (2019), corporate social responsibility (CSR) is a business approach that contributes to sustainable development by delivering economic, social, and environmental benefits for all stakeholders.
Financial Times (2019) went on and stated that CSR is a concept with many definitions and practices. The way it is understood and implemented differs greatly for each company and country. Moreover, CSR is a very broad concept that addresses many and various topics such as human rights, corporate governance, health and safety, environmental effects, working conditions, and contribution to economic development. Whatever the definition is, the purpose of CSR is to drive change towards sustainability (Financial Times: 2019).
Financial Times (2019) further postulated that, although some companies may achieve remarkable efforts with unique CSR initiatives, it is difficult to be at the forefront of all aspects of CSR. According to Johannes (2016), The King IV Report on Governance for South Africa 2016 encapsulates the idiosyncratic South African context of CSR. In the African context these moral duties are manifested in the concept of Ubuntu which is captured in the expression ‘uMuntu ngumuntu ngabantu’, ‘I am because you are; you are because we are’.
This model is the premise upon which the CSR partnership is researched herein. Ever since the publication of the King Reports on Corporate Governance, South African businesses have sharpened their focus on their commitment to the ‘triple-bottom-line’. It is impossible for organizations to ignore the impact of social, ethical, and environmental issues on their business and the economy, and the cost of neglecting these issues will be high. CSR has gained increasing prominence as a result of increased stakeholder demands, limitations of government and civil society to address complex societal issues, and the realization by most businesses that their sustained success depends on their ability to address local sustainable development challenges.
Trialogue (2019) argued that corporate social investment has, erroneously, been practiced as a tick-box exercise based on the belief that once an investment has made, the company has discharged its duty to all three dimensions in which it operates, namely: economic, social and environmental.
Following the principles of integrated thinking and reporting, corporate social responsibility should be built into the business strategy of that organization. For example, if the organization is a beverage manufacturer, it should build the conservation of water into its business strategy, in order to ensure the long-term health of that organization. As a result, the themes around corporate social responsibility through integrated sustained reporting which various corporate organization might follow, include the following;
- stakeholder relations;
- ethical practices and organizational integrity;
- Social and transformation, including black economic empowerment, gender, and equity issues as matters of strategic significance for South African companies. the social aspect extends to all stakeholders;
- human capital;
- Safety, health, and the environment.
In addition to the above, the major issues of CSR that companies need to consider include:
- minimizing damage to the environment and promoting ‘sustainable’ business development, i.e. business growth that does not have adverse long-term consequences for the environment and the earth’s resources;
- having liberal employment policies, (e.g. employment equity);
- investing money in local communities;
- Helping in the fight against crime.
Based on the social, economic, political, and environmental challenges faced by the South African society, each and every company should consider the following five principles in regard to social responsibility;
- to treat employees fairly and with respect;
- to operate in an ethical way and with integrity;
- to respect basic human rights;
- to sustain the environment for future generations;
- to be a responsible neighbor in their communities.
According to Kneale (2012), the manufacturing formulation of a CSR policy should
- decide on its CSR values (and possibly publish a Code of Ethics);
- establish the company’s current position on these CSR values, and identify the gap between where we are’ and ‘where we want to be’;
- obtain board support for the policy and identify responsibilities: nominate board leaders and local ‘champions’;
- develop realistic strategies and targets; implement these on a local and global (company-wide) basis;
- identify key stakeholders whose views the company wishes to influence (employees, pressure groups, customers);
- communicate the company’s activities to the target audiences;
- Monitor achievements. The company should refer to a CSR index, such as ISO standard (2600) on social responsibility, the Global Reporting Initiative’s G3 Guidelines and the JSE Social Responsibility Index (or mention that the JSE has aligned its environmental, social, and governance (ESG) disclosure indicators and data collection methodology with FTSE Russell’s evolved ESG approach).
