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Corporate Social Investment – Can Companies Do Well by Doing Good?

Metrosmag,SA

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South African businesses invested R8.1billion in corporate social investment (CSI) during the 2014/15 financial year, an important financial quantum on the triple bottom line that continues to grow.  Typically, SA’s largest JSE firms approach CSI as well-engineered, strategic and sustainable initiatives that tie back strongly to the business objectives, BBBEE and community stakeholder relationships.

“But for a huge mid-section of firms, CSI is often knee-jerk, unsustainable, non-aligned to the strategic imperatives of the business and the important touch points of the local communities, customers and employees.  As a result, the real grass roots impact of such CSI projects are lost and unrealised, despite significant investments of money, time and resources,” says Michelle Govender, Director: Strategic Marketing at B-Cause, SA’s only dedicated consultancy focused on cause-related marketing.

Whilst the aim of commercial marketing is financial and the aim of social marketing is ‘social good’, the two are not mutually exclusive. The reality is that if correctly deployed and entrenched throughout the business, CSI provides an opportunity for improved profitability, growth, employee engagement, consumer loyalty and competitive advantage.

“The pressure is on all businesses – and especially given South Africa’s massive social challenges and economic disparities – for well-managed CSI strategies that deliver social currency, uplift and empower beneficiaries on a sustainable basis, and support business objectives by enhancing relationships with key stakeholders and customers.  There is an opportunity to do good that has real impact and effect, and at the same time, provides the business with a distinct competitive advantage in a parity market,” explains Michelle.

Is CSI investment realising tangible, grass roots results?

According to the CSI Handbook 18th Edition (Published by Trialogue) total CSI in South Africa in 2014/15 was R8.1 billion.  This only measures the CSI spend of Enterprise organisations, but when you factor in tier two and three companies, it’s likely that this figure is well over R10billion. And yet it’s very hard to track the impact that this investment is having and the kudos the companies are receiving for the hard-earned money they are spending. So where is the cause and effect?  This massive disconnect means that those still in need and brands are missing out on the opportunity to “do well by doing good”.

“In many companies, we see initiatives that are dispersed throughout the company with no over-arching, sustainable plan for ongoing engagement.  Each year, we see hastily coordinated staff field trips on Mandela Day or a ‘global day of service’ to paint, garden or spend time with CSI beneficiaries, only to pack up again and head back to the office until the next year.  What real impact, if any, is this having for the firm, the beneficiaries, communities and employees? Surely, collectively if we all do our part, we should achieve more than simply painting a wall or building a fence once-off?” says Michelle.

In embarking on a sustainable CSI strategy, B-Cause helps companies to identify NPOs that align with the strategic imperatives and nature of the business, and ensure that there is a good fit for the cause and beneficiaries that would be best served by the partnership. “We focus on creating and sustaining mutually beneficial relationships between corporates and NGOs, relationships that will last and become deeply ingrained in the mind of the organisation, the employees as well as the public,” she adds.

Strategic Philanthropy is more important than ever for employees and customers

The CSI strategy needs to be an entrenched part of the business, headed by a senior management person who can ensure that it receives corporate oversight, a role that is typically headed by the head of Human Resources or Operations.  Strong leadership and support for CSI initiatives at c-suite level is crucial, not only from a commitment perspective, but from a budget allocation too.  Top-level support is fundamental to reinforce the intrinsic value of CSI programs for the business, and to ensure that both short term and long term goals are achieved in achieving a partnership where true transformation can occur for South Africa’s most disadvantaged citizens.

Within the South African context, B-BBEE ties in strongly with corporate social investment.  CSI initiatives that assist Black beneficiaries can favourably affect your BEE Scorecard. CSI spend is regulated at a target of 1% of net profit after tax as part of the revised Broad-Based Black Economic Empowerment Codes (BBBEE).  It is important to note that CSI and SED (Socio-economic development) are 2 different elements of the scorecard. Socio-economic development is more than just assisting the disadvantaged with a meal or a warm bed. It refers to access to the economy. CSR departments need to bear this in mind when developing programmes with their scorecard in mind.

Companies can continue to earn points through charitable giving as before, but there is additional emphasis on developing skills, preferential procurement, enterprise development and socio-economic development.  In fact, research by Trialogue shows that the growth in CSI development is linked to three main reasons – moral imperative, reputation and the Department of Trade and Industry’s (DTI’s) Broad-based Black Economic Empowerment (BBBEE) codes.

“It’s also an important factor in employee engagement and positioning the company as an employer of choice.  According to a 2015 Cone communications study, millennials are more engaged with social causes than their older counterparts and they will easily hop online to condemn a brand that they felt was behaving socially irresponsibly.   Millennials are also more likely to work for a company based on its corporate social responsibility commitments, and will even be willing to take a drop in salary in order to work for a socially responsible company that they admire when deciding where to work.  Millennials are also the generation that easily migrate to social media in order for their voices to be heard,” says Michelle.

“Consumers are equally demanding more accountability from brands for their social impact.  Consumers increasingly expect brands to integrate sustainable and responsible practices into all that they do. For example, many companies are starting to make procurement decisions around socially responsible behaviour and corporate values.  Strategic social responsibility and cause-related marketing are very effective marketing tools that help to grow your social impact as well as your business. Brands are embracing CSI as a business-imperative strategy, not only because it’s the right thing to do, but because it’s also the profitable thing to do. When done right, with integrity and commitment to actually making a difference, brands tend to receive a greater share of the consumers wallet,” she adds.

With the growing trend in cause-related marketing, companies will do well to bridge the gap between growing their reputations by aligning and committing to the charities that would make a good fit. By positioning the right products and services with the right cause and designing, developing and deploying strategic corporate social responsibility (CSR) and cause related marketing (CRM) efforts, B-Cause helps achieve the brand’s reputation growth and broaden the positive social impact.

“CSI is here to stay and when one considers the social and economic landscape South Africa currently finds itself in, the need for cohesive, integrated CSI strategies from SA’s corporate sector has never been more crucial.  By strategically managing what is essentially a philanthropic venture, every business can maximize its purpose and benefits to society, create real, grass roots societal value where it is needed most, and fulfil on all its stakeholder mandates,” concludes Michelle.

About B-Cause

Michelle Govender is the Director of Strategic Marketing at B-Cause, the only specialist agency in South Africa that focuses specifically on cause related marketing, social responsibility and sustainability issues. The company was established in 2015 in response to growing international expectations for brands to become increasingly socially responsible.

B-Cause is a division of the Gallimaufry Group which operates at the confluence of cause, commerce and community and collectively shares over 20 years of experience providing consulting, brand-marketing and digital services to both the corporate and not-for-profit sectors.  The agency supports forward-thinking brands that are helping to move the world towards a more sustainable future.

Metrosmag,sa ( inspired by Mzansi Lifestyle ) Mzansi is rich in Lifestyle, a nation diverse in race and culture. Mzansi Magazine explores the rich heritage , versitile culture and the celebrations of Life in Mzansi. Metros Magazine, SA is South Africa's informative Metropolitan lifestlye magazine with all the fresh and important news in Mzansi.

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Sim Tshabalala becomes first Standard Bank black CEO

Metrosmag,SA

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Sim Tshabalala has become the first black person to lead Africa’s largest bank by assets without sharing power, after his co-CEO stood down, South Africa’s Standard Bank said on Tuesday.

Tshabalala, a 49-year old company veteran who describes himself as “a Zulu boy from Soweto”, joins only a handful of black executives at the helm of one of the country’s top-40 blue-chip companies.

He is the second black person to run one of the top five South African banks after Sizwe Nxasana took the reins for five years in 2009 at rival FirstRand in a sector often criticised by politicians for a lack of diversity more than two decades after the end of apartheid.

In an unusual statement from the government on company executive appointments, Finance Minister Malusi Gigaba called the appointment an affirmation of the capacity of black professionals.

“Along with the work that is currently ongoing in parliament to address the slow pace of transformation in the financial sector, Mr Tshabalala’s appointment comes as a step in the right direction,” Gigaba said.

Tshabalala, a lawyer, was appointed alongside Ben Kruger in 2013 to sharpen the company’s Africa focus and clean up a costly blunder by then chief executive Jacko Maree to try to turn Standard Bank into a major emerging markets lender.

“The board is satisfied that the structure, which was necessary in 2013, has met and in many respects exceeded expectations,” Standard Bank Chairman Thulani Gcabashe said in a statement.

“Good momentum has been achieved in the implementation of the group’s refreshed strategy.”

In their joint 4 1/2-year tenure, Standard Bank has added branches across Africa while selling assets in Russia, Turkey, the United Kingdom and Argentina under a revamped strategy that scaled back its ambitions outside the continent.

Kruger will stay on as an executive director, and will report to Tshabalala, Standard Bank said.

Black executives’ lobby group, Black Management Forum (BMF), welcomed Tshabalala’s appointment, saying it showed Standard Bank had respect for black talent.

“The BMF trusts that this announcement will mark an end to the joint CEO appointments phenomena that we have come to see,” the group said.

BMF generally criticises the appointment of two bosses, saying it is often done when “the most deserving candidate is a black person.” It also says it stifles accountability and adds costs to a company payroll.

Synthetics fuels giant Sasol is another high profile company with two bosses. The company is led by Bongani Nqwababa and Stephen Cornell.

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Direct selling providing more opportunities for more women

Metrosmag,SA

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Johannesburg, 16 August 2017 – Figures just released indicate that unlike many other sectors in the economy direct selling is growing, providing more micro-entrepreneurial and income generating opportunities for women.
Currently some 1 333 223 South Africans benefit from direct selling and have the opportunity to build their own small business, of which 72% are women.
Despite the flagging economy, direct sales in 2016 were 18 percent up on 2015, totalling nearly R12.9 billion
According to Cornelle van Graan, chairperson of South Africa’s Direct Selling Association (DSASA), direct selling attracts female entrepreneurs because it offers opportunity, flexible working hours, training and the ability to work from home.
The number of women who make a full-time living from direct selling has grown by almost 30% with the majority operating in the health and wellness, personal care or household good sectors.
Van Graan says that the sector also provides opportunities for women who have an existing full-time job, but want to supplement their income.
“Direct selling is also a good way for stay-at-home mothers to make a living, while being actively involved in the lives of their children. Getting started is generally easy, low cost and low risk.”
“Mothers usually have an existing network of other moms, giving them excellent access to a market with similar needs and interests. Their personal relationships and endorsement gives buyers confidence, so these women can be very effective sales people.”
About three-quarters of all direct sales people in South Africa are involved part-time.
Besides flexibility and access, part of the appeal of direct selling may be that money can be earned immediately the sale is made. There’s no waiting until the end of the month or the next payment cycle.
Van Graan says while motivation can vary from paying for a child’s education to saving for a dream holiday, most women get involved in direct sales to provide for their families.
There are 34 direct selling companies who are members of the DSASA. There are more than a million independent business owners associated with DSASA member companies. They make sales totalling nearly R13 billion a year. Everything from financial services to beauty products and skin care, from fragrances and fashion accessories to nutrition and health supplements, from dinner services and a host of other tableware and kitchenware to household cleaning supplies are sold.
What you need to know about direct selling:
If you are thinking of becoming a direct seller here’s what you need to consider to help decide what direction you want to pursue.
1. Product selection
The direct selling industry offers a range of products within sectors such as health, beauty, homeware, financial and investment products, nutritional supplements and weight-loss management. Although it is preferable to choose products which you are familiar with or interested in, you will receive training on all products being offered by the DSA member company that you choose to join. Believing in your product is vital to effectively market and sell your product, as well as personal fulfilment.
2. Choosing which company
Visit www.dsasa.co.za for a full list of member companies and scroll down and identify the companies offering the type of product or service of interest to you or the business opportunity that appeals to you. Attend a demonstration or visit the website of the company to help decide which company you feel best suits your needs and ideals.
3. Research appealing companies
Read through all their marketing collateral and agreements to get a good understanding of the stability and history of business and of your responsibilities.
4. Investigate the start-up costs
All DSASA member companies are obliged to keep start-up costs low. Your initial investment will typically cover a sales kit with all company information, product samples and training materials. Avoid companies expecting a large investment or who push overzealous inventories, you should be allowed to grow at your own pace and affordability.
5. Study the return policy
All DSASA member companies are obligated to buy back any unsold, re-saleable product inventory, promotional materials, sales aids and kits purchased within the previous 12 months at the selling price less an administration fee of up to 10% of the selling price.
6. Fully understand the compensation
Check the member companies’ compensation plans as they all differ. Make sure you understand details of earnings and the overall business model.
Ends.

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Veolia signs landmark B-BBEE deal with Ceracue

Metrosmag,SA

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“Veolia was looking for a local development partner with strong project experience in the water treatment markets,” explains Gunter Rencken, Managing Director, Veolia Water Technologies South Africa. “In Ceracure, with whom we’ve had a less formalised working partnership for about four years, Veolia has a hands-on, active B-BBEE partner with a thorough understanding of our core business and the water treatment market.”

This close alignment in corporate vision lays the basis for a synergistic approach to increased business development in both South Africa and Africa. “With this partnership in place, Veolia can confidently amplify business development avenues and enhance our project reach in the municipal and industrial markets,” Rencken continues.

“In addition to demonstrating Veolia’s seriousness to transformation and social development, it also means we’ll be able to supply water treatment solutions encompassing a broader scope of works,” explains Langa Nxumalo, Managing Director, Ceracure. “Together, we can advance our technical and business capabilities, offering a superior and integrated solution for water treatment projects. This ‘one plus one is equal to three’ strategy will allow better project execution in line with clients requirements, all thanks to a good balance sheet and technical experience by Veolia.”

The partnership will also see Veolia South Africa taking an active approach to expanding Ceracure’s business capabilities. “We are assisting Ceracure with achieving a higher CIDB grading, and have planned for a structured transfer of technology and skills of Veolia’s water treatment expertise to Ceracure,” Rencken explains.

Veolia’s shareholding arrangement with Ceracure represents an important pillar of the company’s new vision that is enhancing the water solutions specialist’s delivery of highly efficient, low-footprint water treatment technologies in South Africa and Africa. Alongside the B-BBEE deal are a range of recent organisational and technological innovations that have streamlined the company’s manufacturing, distribution and service networks across the region. Veolia South Africa is now positioned as a key technology and manufacturing hub for Veolia’s new range of standard engineered products and systems as well the company’s range of Hydrex™ speciality chemicals.

“We are excited to welcome Ceracure on board, and look forward to a fruitful synergy with them as we continue to tackle Africa’s water treatment challenges,” Rencken concludes.

Veolia group is the global leader in optimized resource management. With over 163 000 employees worldwide, the Group designs and provides water, waste and energy management solutions that contribute to the sustainable development of communities and industries. Through its three complementary business activities, Veolia helps to develop access to resources, preserve available resources, and to replenish them.In 2016, the Veolia group supplied 100 million people with drinking water and 61 million people with wastewater service, produced 54 million megawatt hours of energy and converted 31 million metric tons of waste into new materials and energy. Veolia Environnement (listed on Paris Euronext: VIE) recorded consolidated revenue of €24.39 billion in 2016.

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