The impact of Covid-19 has brought far greater demands on companies to help address social and socio-economic challenges — particularly in African countries, where public finances were already under severe pressure. Lately though, even the most socially conscious business leaders may have turned away from what can be considered purely philanthropic activities.
However, increased demands on your business do not need to conjure up negatives such as increased costs with no return. They can provide opportunities to redefine your role in society, confirm your space in your community and enhance your reputation. They can also contribute to delivering on your commercial objectives.
In this context, a well-thought-through and clearly defined Corporate Social Investment (CSI) strategy is critical. This means treating CSI just as you would a core business investment or operational decision. So here are some practical steps to help you along the journey. Let’s also use the example of a company processing and packaging fresh fruit from local farmers for sale in-country and for export — let’s call it Aduane Pa (meaning ‘Good Food’ in Twi — a Ghanaian language): -
1. Know where you want to go — and what it will take
The first step is to define the core strategic objectives and drivers of your business, such as greater market share, reduced operating costs or reputation growth. Then list the internal and external risks to achieving each of these goals. Aduane Pa’s core strategic objective is to increase its market share by producing high-quality, affordable packaged fresh fruit. Risks to achieving this objective include the varying quality of fresh fruit grown and supplied by local farmers and assurance that these are produced without adverse environmental and social impacts.
2. Know where you are
Now, look at the latest emerging global and local environmental, social and governance (ESG) themes. The UN Sustainable Development Goals (SDGs) are an excellent starting point. Speak to your shareholders, your employees, your customers, and people in communities impacted by your business to understand their views and their expectations of the role your business will play. List the most significant development priorities of your local community or, depending on your size and reach, the country in which you operate. Aduane Pa has identified skills development for local farmers, and job creation.
3. Know what you want
Now, decide which primary business-aligned social or socio-economic outcomes you want to achieve through your CSI strategy. It’s fine to think about adding value to your business. After all, the success of your business enhances your ability to contribute. What matters is that these outcomes are aligned to your business objectives and value drivers. Aduane Pa wants its supplier farmers to grow and produce high-quality fruit in a way that minimises adverse environmental impact and can help increase its market share, brand loyalty and visibility.
4. Identify your choices
Now, identify the CSI themes best aligned with these results. Try to stick to one or two key themes to avoid the risk of diluting impact for your business and the community. Also, think about what you want to be known for. Keep it simple and consistent, ensuring reputational coherence internally and externally. For example, a financial services company looking to lower rates of loan default might look at education as a general theme, with a focus on financial literacy. Aduane Pa might decide on enterprise development as a theme — focused on its supplier farmers — and aligned to SDG 8, Decent Work and Economic Growth.
5. Define the way forward
Finally, you need to decide which CSI model to use. In my CSI Masterclass© for business leaders, we discuss the pros and cons of different models, including philanthropy, socio-economic development and Shared Value. It’s important to take into account the size and resources of your business and the themes you have chosen. This will determine the sort of programmes you develop or support, and whether you can implement in-house, or need some external support.
Aduane Pa might decide to develop supplier training programmes to improve farming techniques or create a fund to enable more local people to start farming, providing fruit to the company as its business expands. The best initiatives and projects I have seen fall within the ‘sweet spot’ of supporting your corporate objectives and value drivers (including mitigating your business risks), helping to address national and local priorities and having demonstrable and measurable social or socio-economic benefits.
African companies have been among the most likely to step up to the challenge of addressing the wide range of social and socio-economic issues in their local communities. They do it because Africans are used to helping those who are less fortunate, and because it is expected. As a result, social investment is not always strategic or structured and may have very little demonstrable impact or value to the business. The framework I have outlined here will ensure that your strategy hits the sweet spot.
As always, I would love to hear your thoughts, ideas and success stories, and in my next post, to be published on 25th March, I will provide some more detail on different CSI models for your business.