Corporate Sustainability in South Africa

Corporate Sustainability in South Africa:

A Ten Year Review

Article by Wayne Visser

What have ten years of democracy meant for the corporate sustainability agenda? This section looks back at what have been the main catalysts for change since 1994, the trends where substantial progress has been made and the key areas where companies still lag international best practice.

Catalysts for Change

Legislative Reform

The wave of legislative reform initiated by the post-apartheid government fundamentally changed the landscape of corporate sustainability. Between 1994 and 2004, approximately 60 entirely new or substantively revised statutes were introduced which had direct implications for corporate management of safety, health, environment, socio-economic development, labour, governance and ethics issues. Some of these, such as employment equity and black economic empowerment, reflected the aspirations of the ANC’s pre-election Reconstruction and Development Programme (RDP) agenda, while others, like sustainable development and corporate governance, strongly echoed international trends.

Globalisation

At the same time, South Africa’s re-entry onto the international staged forced many companies to raise their sustainability standards to meet global market expectations. As a direct result, there was a substantial increase in environmental management certification and sustainability reporting, as companies like BHP Billiton, Anglo American and Old Mutual, which became Fortune 500 companies, and SABMiller, Lonmin and Dimension Data, which became FTSE 250 companies, quickly upped their game to conform to the corporate governance requirements of the New York and London stock exchanges and the corporate sustainability requirements of various social and environmental investment indexes.

Stakeholder Activism

Newly empowered by the law and supported by international NGOs, South African civil society also became visibly more active in challenging companies on the basis of the public’s social and environmental constitutional rights. Cases in which companies became the target of such stakeholder activism included the likes of Thor Chemicals, AECI, Caltex, Iscor, WasteTech-Enviroserv, Sasol Mining, Cape plc, Gencor, Anglo American, De Beers and GlaxoSmithKline. Not surprisingly, there has been a parallel trend among companies of improved public transparency, increased stakeholder involvement and active pursuit of public-private partnerships.

Codification

Given these pressures to demonstrate their corporate sustainability, South African companies have followed the international trend of codification, i.e. adopting standards and guidelines as a form of voluntary self-regulation on social, ethical and environmental issues. The codes which have had the most impact include ISO 14001 (for environmental management), the King Code (for corporate governance) and the Global Reporting Initiative (for sustainability reporting), while the influence of other frameworks like those on social accountability (e.g. AA 1000, SA 8000) and general corporate citizenship (e.g. the Global Compact, the OECD Guidelines for Multinationals) have been more limited.

Trends

Over the last decade, corporate sustainability has steadily broadened from an initial focus on philanthropy and environmental management towards including health, safety, labour, community and broader socio-economic issues. By the time Trialogue surveyed the top companies in 2004, 100% regarded corporate citizenship (reflecting the contemporary broad definition of corporate sustainability) as a priority, with 52% giving absolute priority status and 32% high priority.

Corporate Philanthropy

Trialogue estimates that the total expenditure on corporate social investment (CSI) in South Africa  …

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Visser, W. (2004) Corporate Sustainability in South Africa: A Ten Year Review. 2004 KPMG Survey on Integrated Sustainability Reporting in South Africa, KPMG: Johannesburg.

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Meaning, Work and Social Responsibility

Meaning, Work and Social Responsibility

Article by Wayne Visser

Surprisingly little has been written about the search for meaning in a workplace or business context, and nothing, in my knowledge, has made the explicit link to corporate social responsibility (CSR). It is surprising, partly because meaning has been a serious topic of research and application for at least fifty years now, following the seminal work of Viktor Frankl and others, as have the fields of industrial psychology and CSR. But it is more surprising still, simply because work is where we spend about a third of lives. If meaning cannot be found in the workplace, our ability to lead a fulfilling life is seriously impaired.

The importance of understanding how work can contribute to meaning in life seems more critical now than ever before. Anecdotal evidence is mounting that people in the West are increasingly feeling a sense of existential crisis in their working lives. On the one hand, they are expecting more from their work experience, including that it will nurture personal development and self actualisation. On the other hand, they are finding the capitalist, corporate model of work to be lacking in a meaningful higher purpose, or to put it another way, the modern workplace and economy is devoid of a sense of soul.

Some may argue that this growing frustration in the Western workplace is a vindication of Karl Marx’s (1975) concept of the alienation of labour through capitalism, whereby work “does not belong to his essential being; that he therefore does not confirm himself in his work, but denies himself, feels miserable and not happy, does not develop free mental and physical energy, but mortifies his flesh and ruins his mind”.

Modern social commentators like Charles Handy are less extreme, arguing for reformation rather than revolution. In his book, The Hungry Spirit, which is subtitled “Beyond Capitalism – A Quest for Purpose in the Modern World”, Handy calls for capitalism to embrace the notion of social capital (and I would add ecological capital as well) in addition to the more traditional economic capital. He also emphasises the need for citizen companies, which demonstrate greater accountability and a restored balance between the rights and responsibilities of business.

The question remains, however, whether these ideas have any grounding in the theory of meaning on the one hand, and management theory on the other hand. According to Frankl’s logopsychology and logophilosophy, work – doing, or as he referred to it, realising creative values – constitutes one of three paths to meaning. “As long as creative values are in the forefront of the life task,” he noted, “their actualisation generally coincides with a person’s work”. In fact, his other two paths to meaning may be equally applicable in the work situation, even if less common, namely being, or the experience of values (e.g. love, truth, beauty), and perceiving, or the adoption of constructive attitudes (especially in the face of suffering).

Frankl’s notions of work as ideally being an expression of a life task are not dissimilar to iconic industrial psychologist Abraham Maslow’s conclusions about self-actualising individuals. Writing …

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Visser, W. (2003) Meaning, Work and Social Responsibility. Positive Living E-Zine, International Network on Personal Meaning, September.

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Corporate Responsibility in a Developing Country Context

Corporate Responsibility in a Developing Country Context

Article by Wayne Visser

In this article, I want to explode a few myths about corporate responsibility in developing countries. Most of these myths exist as a result of the feeding frenzy that inevitably occurs every time the media has hunted down and sunk its teeth into one or other juicy story of corporate exploitation. The myths are also sustained, however, by whole legions of largely well-intentioned people in developed countries who have vested interests in promoting their particular brand of the truth about corporate responsibility.

Myth 1: Economic growth is not good

Over the past decade or more, there has been a growing backlash against the economic expansionist agenda of many developed countries and multinational corporations. And rightly so: Blind pursuit of GDP growth or market growth often fails to take into account many of its negative social and environmental impacts, as alternative indicators of progress, like the United Nations Human Development Index, the Index for Sustainable Economic Welfare (ISEW) and the Environmental Sustainability Index, have all amply demonstrated.

But it is a mistake to transpose this “growth is not good” argument into a developing country context. What the ISEW showed, in fact, was that GDP growth and quality of life in developed countries like the USA and UK moved in parallel until around 1970, when they began to diverge, with quality of life declining despite continued economic growth. Most developing countries have yet to reach that point of divergence. Economic growth and the expansion of business activities is still one of the most effective ways to achieve improved social development and environmental sustainability.

Myth 2: Multinationals are the biggest sinners

In today’s fishbowl world, when multinationals step out of line, they get slammed in the worldwide media. Typically, their reputations suffer collateral damage and they find themselves being targeted by consumer boycotts and liability suits. This is both appropriate and necessary as a counterbalancing force in today’s supra-territorial society, given the overwhelming size and power of global corporations and the still relatively poor institutional frameworks of regulation and governance to ensure proper accountability.

But on balance, these sensational cases are the exception, rather than the rule. On the ground in developing countries, multinationals are generally powerful forces for good, through their investment in local economies, creation of jobs, upgrading of infrastructure, provision of basic services and involvement in community development and environmental conservation. The cumulative social and environmental impacts of smaller companies, which operate below the radar of the media and out of reach of the arm of the law, are typically far larger than that of the high profile multinationals.

Myth 3: Multinationals are the biggest saviours

While multinationals are typically not the worst offenders in developing countries, neither do they have as much influence over national development as many critics seem to assume. Development is a complex phenomenon, which fifty years of multilateral frustration has proved beyond question. Adequate systems of governance and economic stability are probably two of the most critical enablers, a fact that countries in Africa have finally realised with the launch of the African Union and  …

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Visser, W. (2003) Corporate Responsibility in a Developing Country Context. Ethical Corporation, Issue 20, August.

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Can We Survive the Future

Can We Survive the Future:

Only if Business Shapeshifts from Lions into Elephants

Article by Wayne Visser

Rabbit Holes and Boiled Frogs

Being in business these days is a lot like falling down a rabbit hole. The latter, if you remember Lewis Carroll’s classic Alice’s Adventures in Wonderland, is a chaotic and confusing place to be. All the tried and tested rules of the past don’t seem to work so well anymore. The formerly familiar environment keeps transforming itself into new, unrecognisable landscapes. Strange, distracting characters have a habit of popping up randomly and then suddenly disappearing. And the clear, rational perspectives that used to spell out solutions keep getting stretched, warped and turned on their head, like the reflected images in a house of weird mirrors.

To illustrate what I mean, the demigod once known as the shareholder has mutated into a multi-headed beast called the stakeholder. Accounting, the time-honoured introspective discipline of counting beans (or gold or money or shares), has been turned inside out and become nerve-racking accountability to the big wide world out there. And profitability, which used to be a trustworthy financial measure, has multiplied into a triple bottom line by blurring together economic, social and environmental performance.

To survive in this whirlwind of chaotic change, companies have become adept at rapidly adapting to dramatic changes. What business has been less skilled at doing is recognizing or responding to long-term effects of gradual changes. In this sense, it displays the classic “boiled frog syndrome”. If a frog is placed in boiling water, it immediately jumps out providing it is free to do so. However, if the water temperature is cool to begin with and then gradually increased, the frog fails to register any threat to its well-being and consequently allows itself to be literally boiled alive.

There are many examples of threats that could boil the corporate toads: creeping income inequality; the spread of HIV/AIDS; marginalisation of certain regions in the world economy; the cancerous burden of Third World debt; alienation of people with low incomes or no jobs; accelerating biodiversity loss; global climate change; rising chemical concentrations in the Earth’s water systems; disintegration of cultural identities; and the spread of violent crime among the youth, to mention but a few.

Trading in Fangs for Tusks

At the heart of all of these challenges is one of the most profound drivers for step-change in business and the world – sustainability. Sustainability refers to improving human well-being by seeking a proper balance between social, economic and environmental change over the long term. The old ways, which have dominated for the past century or more, are no longer appropriate for a post-industrial, sustainability-driven society. Sustainability is not only a new scientific, political, social and legal concept, but an entirely new business philosophy based on a new mythology. It requires that business think differently about its role in society and how it goes about what it does.

The changes needed in order for business to survive and thrive in an age of sustainability are so fundamental that they are akin to changing its identity, its underlying nature. At the moment, we  …

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Visser, W. (2002) Can We Survive the Future? Only if Business Shapeshifts From Lions into Elephants. Namaste, Volume 19, October.

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Ten Predictions for a Sustainable Future for Business

Ten Predictions for a Sustainable Future for Business

Article by Wayne Visser

After the World Summit on Sustainable Development in Johannesburg, we should take care not to mistake this single event for the greater symphony of change that it heralds. Like fleas on an elephant, we need to jump back and see the greater whole – the challenge of creating a sustainable world. However you want to define it, in the end, it comes down to our ability to endure. Those that understand how social and environmental drivers will be shaping the landscape over the coming decades will be better placed to survive. This article ventures ten predictions about how the future will be different.

Prediction 1

In the future, the number of banned substances will increase exponentially

Many chemicals and metals (especially persistent compounds) that are commonly used today, and still more that have yet to be created, will be linked to serious human health impacts (birth defects, cancers, immune deficiencies) and ecosystem destruction (habitat decline, mutant species, collapsing populations). The speed of this trend is being driven by the rate at which synthetic chemical compounds are being created and the rapid build up of persistent substances in the ecosystem, versus the tolerance thresholds of our immune systems and the environment. Sustainable companies will apply the precautionary principle and actively seek substitutes for hazardous or persistent compounds.

Prediction 2

In the future, forensic sustainability will emerge as a new professional discipline

There will be groups of professionals, with a combination of legal, investigative, sociological, eco-toxicological and medical expertise, which will track down companies responsible for illegal, indiscriminate social and environmental violations. Using leading-edge forensic techniques, they will trace evidence from the crime scene (an illegal waste dump, contaminated land, a toxic spill, an afflicted community, a sick set of customers) back to the companies that can be in any way linked to the substance, process or product that caused the damage. Damage claims and sustainability insurance will grow exponentially. Sustainable companies will apply extensive internal and external investigative, auditing and assurance techniques to avoid being an unknowing accomplice to sustainability violations.

Prediction 3

In the future, governments and civil organisations will maintain and publicise corporate grey-lists

Any company that consistently violates sustainability principles (environmental integrity, community health, human rights, health and safety) will be “greylisted” by governments, multilateral agencies and civil organisations. Some governments will forbid the greylisted companies from operating in their countries. Activists will use the greylists to mount boycotts. Financial analysts and shareholders will use the greylists to inform their choice of investments. Sustainable companies will actively embrace a transparent, triple bottom line approach to their strategies and operations in order to avoid future greylisting.

Prediction 4

In the future, companies will employ sophisticated, real-time corporate stakeholder monitoring

Like professional athletes that monitor every aspect of their bodies’ performance, companies will be expected to have their finger on the pulse of each of their sets of stakeholders. Using a combination of new technologies and new industrial psychology techniques, companies will receive almost constant electronic feedback on the health, well being and level of satisfaction their stakeholders …

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[button size=”small” color=”blue” style=”tick” new_window=”false” link=”http://www.csrinternational.org”]Link[/button] CSR International (website)

[button size=”small” color=”blue” style=”info” new_window=”false” link=”http://www.waynevisser.com/books/corporate-citizenship-in-africa”]Page[/button] Business Frontier (book)

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Visser, W. (2002) Ten Predictions for a Sustainable Future for Business. Ethical Corporation, 6 September.

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