CSRFiles Edition 4

promoting discussions on corporate sustainability and responsibility across the african continent Vol1, issue 4, 2012

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DOING GOOD:Beyond Corporate Philanthrophy

Doing Good: Going Beyong Corporate Philanthrophy

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SUSTAINABLE CONVERSATIONS II

9 Questions 48Osayi Alile Oruene – WEF YGL

contentsfaqs

cover story

in print

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Understanding Venture Philanthropy and Impact Investing

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The Rise of the Corporate Citizen

The Price of Civilization & Subsidizing Sustainable Development: The Nigerian Case Study

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Publisher’s note

in Africa, we seem to have moved, albeit very slowly, from understanding Philanthropy and its many benefits to appreciating and adopting CSR as a business concept.

For us at ThistlePraxis, CSR means Corporate Sustainability & Responsibility. We have adopted this refined concept and dropped ‘social’ because we see businesses as active members of society. ‘Social’ in CSR suggests that a business entity exists as an externality, whilst considering the society in her activities. Philanthropy and CSR are two different, beneficial and independent concepts. Whilst the two can work best together, the practice of juxtaposing both activities is no longer acceptable for organizations who want to stay competitive, relevant and sustainable.

This edition seeks to distinguish and clarify the relationship and/or differences between CSR and Philanthropy. We intend to define and redefine the concepts and associated terminologies as well as ensure organizations have a better grasp of the importance of philanthropy and greater need to draft a CSR policy and/or strategy. The debate goes way beyond the nomenclature and understanding the concepts of CSR and Philanthropy as there is no doubt that there has been a significant shift in the way that companies – of all sizes, of all sectors and in all locations – view Corporate Responsibility. However, it is pertinent to extend this discourse to the tangible effects/benefits of both activities as well as the Sustainability of each.

Philanthropy, whilst beneficial for obtaining and retaining of social licenses to operate amongst many other benefits, has proven to be a mere stopgap measure to risk management and aversion of crises. It also generates goodwill for donor organizations amongst beneficiaries and serves as a functional ‘give back’ activity for a worthy cause; albeit, inadequately. For instance, a few posers to ascertain how far-reaching philanthropy goes for business entities would include: how sustainable is giving a particular sum of money or amount in resources to a cause, non-profit organisation or community? Who measures? What exactly is the impact of this gesture? How sustainable is this activity? Does it increase or decrease with the bottom line of the company every year? Is there an alignment with the business model of the organization? There is no doubt that leading organizations no longer view stakeholder

challenges, demands and expectations narrowly in terms of risk mitigation or brand enhancement.

On the flip side, what we, at ThistlePraxis, encourage and assist organizations to achieve; is to see the complexities as providing opportunities for innovation as well as enhancing consumer, investor and wider public relationships which, in turn, if well managed certainly will contribute directly to the overall Sustainability of the business.

The linkage between CSR and philanthropy remains obvious and inevitable. CSR started as a purely philanthropic gesture in response to gaping societal needs. This is by no means a compelling argument for us to remain in that phase. As Dr. Wayne Visser of CSR International puts it, that form of CSR, CSR 1.0 is dead and a befitting funeral had long been staged to celebrate its little impact on the African business environment.

Nestle’s ‘creating shared value’ model is a good case study of a well thought-out move from Philanthropy to CSR. In Nigeria, Nestle partners with the International Institute of Tropical Agriculture, IITA, Ibadan; MATNA Foods, Akure; Nigeria Starch Mills, Uli, Anambra State (two large-scale cassava processing industries) and other cassava farmers. Under this scheme, small scale farmers in target communities are supported to increase production per unit area while effective markets are developed for the product. IITA develops clusters of farmers; supplying them with cassava varieties that are high yielding (i.e. high in starch content), disease resistant and commercially viable. In turn, the farmers would provide a constant supply of tubers to the processing industries to enable them satisfy Nestlé’s demands. The large-scale processors will be responsible for marketing the tubers produced by the farmers; thereby raising production at the grassroots. Through this project, the farmers are exposed to beneficial management practices. This cassava initiative is in tandem with Nestlé’s policy of procuring raw materials for its business from local suppliers whilst the partnership is aimed at the long-term and sustainable commercial production of high quality cassava starch in Nigeria with a view to increasing its commercial value. It also reduces poverty and generates employment among rural dwellers while ensuring food security in the long run. This is a sustainable approach and a CSR initiative rather a philanthropic gesture of annual donations of fertilizer, cassava varieties and other agricultural products or resources to farmers in the host communities where Nestle operates periodically and shows a model, which organizations can adopt.

Dr. Ite’s cover story sums up the case we are putting forward at this time and we cannot agree more than urging organizations to combine philanthropy and CSR rather than practicing philanthropy in the name of CSR. We are also impressed by his passion for the discipline and consistency in contributing to every edition of CSR Files™ so far. We wish him a sterling career of impact and multiple success stories.

I hope you will find it engaging and worth your time and money, as always. Do keep in touch.

Substainably yours,

Ini Onuk,Publisher

At BrainBox Resource & Research, our commitment is sacrosanct: Bringing the Best Results Rapidly.

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PUBLISHERIni Onuk

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CONTRIBUTORSChris Jarvis, Uwem E. Ite, Dimeji Belo, Ivor Hopkins, Olawole

Shojibi, Feso Bright, Ini Onuk and Micheal Rosen

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Copyright © 2012 by ThistlePraxis Consulting Limited.

Volume 1, Issue 4april, 2012

Published in the Federal Republic of Nigeria............................................................................................................................

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editorial

as we countdown to our flagship event, the Africa CEO Round-table & Conference on Corporate

Sustainability & Responsibility (AR-CSR™), we also count down to the United Nations Conference on Sustainable Development tagged, Rio +20. These two events will, no doubt, elevate discussions on CSR in Africa and the world. They will also set the agenda on Sustainability issues for the next few years or decade. In May, 2012, we will conduct a poll on these two events. Our aim is to find out how much people believe in the continued discourse on Sustainable Development. Are these events really significant? Are they just talk shops and great networking platforms? Are all the action points followed up? Please visit: http://www.thistlepraxisconsulting.com to participate in the poll.

For those who have followed CSR Files™, we started off with Demystifying CSR and then got readers to move From Thought to Action. After these, we considered the need to discuss Sustainability: the S of Business. In that edition, we discussed, in detail, how Sustainability means the Survival, Success, Succour, Strength, Strategy and Solution to any business enterprise.

Our fourth offering seeks to critically examine the respective alternative concepts, which have long confused the perception and understanding as well as hindered the development and practice of CSR in the African business environment. We will seek to find out what makes our business climate peculiar and why business leaders are still somewhat divided on CSR. In addition, the respective roles that concepts such as Philanthro-capitalism, Impact Investing, Venture Philanthropy etc. play in CSR will be highlighted.

Not only does Dr. Uwem Ite make a good case for the debate between CSR and Philanthropy in his frank cover story, he gives a good grasp

of the reason the African business environment has moved slowly from Corporate Philanthropy. At ThistlePraxis, our argument has been similar on certain reporting standards and guides. Without the ability to tweak them to fit the reality in these climes, certain strategies may never work in Africa.

The trio of Oladimeji Belo, Ivor Hopkins and Olawole Shojibi of CESC Consulting share insight on CSR and Sino-Africa Relations while Feso Bright of the THGIRB Company talks about Stakeholder Engagement. Our event report features the second edition of our Thought Leadership Series on Sustainable Development, Sustainable Conversations™ with the theme: ‘Driving Sustainable Agriculture for National Development’.

Frequently Asked Questions (FAQs) answers many questions we have often heard about Philanthropy. More interesting is that this edition brings you more than definitions; there is a comparative analysis of the various concepts, which have emerged as well as schematic diagrams on models of philanthropy practised by many global institutions and professional networks.

I did promise in my last editorial that 9 Questions will return in this edition. Osayi Alile Oruene, the Executive Director of FATE Foundation takes

the hot seat. Her views about Sustainable Development through strengthening SMEs and developing entrepreneurial capacity in emerging business leaders are apt. Verbatim, In Print and Glossary – our regular pages are here with even more interesting views and information while Executive Education returns with a piece we are certain is difficult to ignore.

In response to many requests, we have commenced work on making these conversations virtual so that many more people can engage one another at the same time wherever they may be. Our commitment remains unwavering as this platform remains open and available for discussions on the development of CSR practice within the African business environment and beyond. We will be very pleased to publish your rebuttals as we will certainly not achieve an open, unending conversation without your opinion. This project will be fully unveiled in the next edition. Do send all comments, inquiries, requests and reviews to the Editorial team: [email protected]

or to me directly: [email protected].

A better grasp of the concepts, their applications and challenges will in no small way enrich the discourse. Let’s understand the concept before we engage in a more robust conversation, shall we?

RETRACTION: Elaine Cohen’s review of the Global Reporting Initiative (GRI) G4 Guidelines was wrongly attributed. The article was first published on her blog, CSR Reporting (http://www.csr-reporting.blogspot.com)and not on the CSRWire portal as credited. We apologise for any inconvenience this mix up may have caused.

Our commitment remains unwavering as this platform remains open and available for discussions on the development of CSR practice within the African business environment and beyond

THE CONCEPTS & THE DISCOURSE

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WHAT IS IMPACT INVESTING?

Impact investing is an investment strategy whereby an investor proactively seeks to place capital in businesses that can generate financial returns as well as an intentional social and/or environmental goal. This concept of combined financial and other benefits is known as Triple bottom line or Blended value.

WHAT IS THE DIFFERENCE BETWEEN IMPACT INVESTING AND SOCIALLY RESPONSIBLE INVESTING?

Impact investing is differentiated from socially responsible investing in that an investor will proactively seek investments that generate both financial as well as specific social

and/or environmental returns. These businesses can thus provide social or environmental impact at a scale that purely philanthropic interventions usually cannot reach. Paul Sullivan of the New York Times characterized Impact investing as an “emerging hybrid of philanthropy and private equity.”The investor may take an active role mentoring or leading the growth of the company.

This is similar to the way a Venture capital firm will assist in the growth of an early-stage company. Impact investing has its roots in the Venture capital community, where funds like Acumen Fund, Grassroots Business Fund, Small Enterprise Assistance Funds and Bridges Ventures have pioneered the practice.

Many Development finance institutions such as the FMO, Proparco, Grofin, E.Co, Africa Development Bank (AfDB), International Finance Corporation (IFC), DEG, British Commonwealth Development Corporation or Norwegian Norfund can also be considered impact investors, because they allocate a portion of

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Understanding Venture Philanthropy and Impact Investing

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These businesses can, thus, provide social or environmental impact at a scale that purely philanthropic interventions usually cannot reach.

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their portfolio to investments that deliver financial as well as social or environmental benefits. The services offered include angel networks, online lending services, over-the-counter or private investment opportunities and regulated market places.

WHAT THEN, IS VENTURE PHILANTHROPY?

Venture Philanthropy works to build stronger social purpose organisations by providing them with both financial and non-financial support in order to increase their societal impact. The word ‘societal’ is purposely used because the impact may be social, environmental, medical or cultural. The Venture Philanthropy approach includes both the use of social investment and grants.

As Venture Philanthropy spreads globally, specific practices may be adapted to local conditions yet it maintains a set of widely accepted key characteristics. These are: high engagement, tailored financing, multi-year support, non-financial support, involvement of networks, organisational capacity-building and performance measurement.

WHY USE VENTURE PHILANTHROPY?

VP is one tool in the social investment and philanthropy toolkit. It has emerged in Europe during the present decade as a high engagement approach to

social investment and grant making across a range of organisations with a societal purpose (SPOs), from charities and non-profit organisations through to socially driven businesses. Social investment refers to funding that may generate a financial return, but where the societal impact comes first; so-called Impact First strategies. Grant funding on the other hand is the provision of non-repayable donations to the social purpose organization supported; an Impact Only strategy.

Finance first strategies, where the financial return is maximized and the societal impact is secondary, are not included in the definition of venture philanthropy. The relatively newer term “Impact Investment” includes both impact first and finance first strategies. The following diagram aims

to clarify the differences and overlaps of this terminology.

IS IMPACT INVESTING AN EFFECTIVE TOOL FOR LONG-TERM DEVELOPMENT?

Impact investing targets regions and sectors where traditional direct investment does not. Also, impact investments target sectors that have had difficulty attracting investment in the past, such as renewable energy, rural development, Agriculture and health. These sectors have a huge impact on the long-term development of any nation.

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Impact investments target sectors that have had difficulty attracting investment in the past, such as renewable energy, rural development, Agriculture and health.

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Chris Jarvis

a neW iDea

John F. Kennedy was exhausted. It had been a long day and now, at 2 a.m. Kennedy was just arriving at the University of Michigan. The upcoming Presidential election was just three short weeks away and Senator Kennedy had been travelling across the country in a last ditch effort to secure every last possible vote.

Kennedy stepped to the podium. A cheering crowd of some 10,000 students filled the auditorium in front of him. His speech began weakly with a joke that he had come to Ann Arbor to go to bed. The students cheered, their energy filling the air. Kennedy’s exhaustion was replaced by their enthusiasm and as he stood in front of the future of the nation, something magical happened.

an iDea Was born

Kennedy set aside his prepared notes and spoke from his heart: “How many of you, who are going to be doctors, are willing to spend your days in Ghana? Technicians or engineers, how many of you are willing to work in the Foreign Service

and spend your lives, travelling around the world?”

A couple of nights later the students wrote out a call to action on a napkin. Within a few days, 1,000 students had signed the petition to create Kennedy’s Peace Corps. Six months later, having won the election, President Kennedy signed an executive order and the Peace Corps began. Since then, more than 200,000 citizens have participated in the Peace Corps serving in 139 countries around the world.

an iDea With a riCh traDition

The Peace Corps may have been born that night in Ann Arbor, but the idea itself had been around for awhile. In 1951, Kennedy, as the Representative of Massachusetts, proposed the following:

“Young college graduates would find a full life in bringing technical advice and assistance to the underprivileged and backward Middle East ... In that calling, these men would follow the constructive work done by the religious missionaries in these countries over the past 100 years.”

This idea of mobilizing American citizens to assist nations and communities around the world had been considered by Kennedy and other members of Congress since the conclusion of Second World War. Yet, Kennedy’s comments revealed an idea with a much richer tradition. The Peace Corps was rooted in missionary work that had been carried out by churches and other religious bodies for hundreds of years.

When asked where the idea for the Peace Corps came from, Kennedy answered that he had based much of his thinking on the example of Operation Crossroads Africa founded by Rev. James H. Robinson.

How many of you, who are going to be doctors, are willing to spend your days in Ghana? Technicians or engineers, how many of you are willing to work in the Foreign Service and spend your lives travelling around the world?.

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a traDition Continues

Just a few weeks ago on October 14, PepsiCorps landed in Ghana. An 8 member team, drawn from around the world and across PepsiCo’s business units, was tasked with addressing the acute issue of access to clean water, sanitation and hygiene in the Ketu South District.PepsiCorps is a month-long project in partnership with CDC Development Solutions. Each member of the team is expected to draw on work-related skills to help the host community and achieve the goals of the project. The team will be living and working alongside members of the Ketu South District community. The hope is that they will become “more attuned to on-the-ground realities and develop deep insights into the connections between business and social needs.”

Ghana was the first country in the world to receive Peace Corps Volunteers on August 30, 1961. Inspired by the best qualities of missionary work around the world, the United States government mobilized citizens for the benefit of other nations, facing seemingly insurmountable social and environmental crisis. The Peace Corps was established for the following purpose: “To promote world peace and friendship through

a Peace Corps, which shall make available to interested countries and areas men and women of the United States qualified for service abroad and willing to serve under conditions of hardship if necessary, to help the peoples of such countries and areas in meeting their needs for trained manpower.”

Now, 50 years later, PepsiCorps has landed on the beaches of Ghana. Inspired by the best qualities of the Peace Corps tradition, PepsiCo has mobilized its employees with similar aspirations: “PepsiCorps is about more than volunteering; it speaks to the responsibilities of businesses to the communities and the larger world in which they are embedded. This theme of prospering at the intersection of what’s good for business and what’s good for society derives from PepsiCo’s mission – Performance with Purpose.”

RealizedWorth works with companies to design and implement highly engaging employee volunteering and workplace giving programs that help create better companies, better communities, and a better world. RealizedWorth is a partnership of Angela Parker and Chris Jarvis.

You can read their blog at www.realizedworth.blogspot.com

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Ellie Williams, Journalist, ehow.com contributor

Sarah A. Altschuller, associate in the CSR practice of Foley Hoag LLP in Washington, D.C. Vice-chair of the CSR Committee of the ABA Section of International Law

“Ultimately, CSR is about how companies are managed, not about the ways in which they choose to allocate profits. CSR is about the core business functions of a company, and about the increasing demands of company stakeholders that companies be held accountable for the social and environmental impacts of their operations.”

Maurizo Zollo, Associate Professor of Strategy and Management at INSEAD

“Even though they might be working on similar initiatives, such as tackling the health crisis in Africa, they would be doing so for different reasons and treating their investments in very different ways. In the case of CP, the initiative would be an ad-hoc project aimed at short-term social impact and long-term financial gain. In the case of a fully embedded CSR model, the initiative would be part of a company’s routine operations, with its economic profit serving the long-term goal of contributing to social welfare”

“A company’s philanthropic commitments are often aligned with its strategic vision and values and provide critical support to a range of external stakeholders. That said, effective implementation of CSR requires a level of internal, and external, commitment and engagement that goes beyond what is required for corporate giving programmes.”

Kevin R. Webb,Director of Mitsubishi Electric America Foundation.

“A year ago, I had the pleasure of visiting Mitsubishi Electric corporate headquarters in Tokyo, where I learned about our overall company Corporate Social Responsibility (CSR) activities. It was a real education, as I learned that CSR goes far beyond being a good cor-porate citizen through philanthropic giving. Good CSR includes developing high-quality products, implementing sustainable production processes, operating with integrity, and being a company where people want to work.”

Trade and Investment Division (TID), United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP)

Gordon Brown Fmr. Prime MinisterGreat Britain

“Today, Corporate Social Responsibility goes far beyond the old philanthropy of the past – donating money to good causes at the end of the financial year – and is instead an all year round responsibility that companies accept for the environment around them.”

Tracey Keys, Director of Strategy Dynamics Global Limited and also works with the International Institute for Management Development

“Many businesses pursue CSR activities that can best be termed pet projects, as they reflect the personal interests of individual senior executives. While these activities may be presented with much noise and fanfare, they usually offer minimal benefits to either business or society. In the middle are efforts that can make both sides feel good, but that generate limited and often one-sided benefits. With philanthropy, for example, corporate donations confer the majority of benefits on society, with potential but often questionable reputational benefits to the business.”

David Ronnegard Post doctoral fellow at INSEAD Centre for Executive Education and Research in Abu Dhabi

“Companies in the GCC that have started to engage in CSR activities have, primarily, done so though corporate philanthropy. In other words they have aimed to satisfy the interests of a broader group of stakeholders through donations to local charities and interest groups. This is an “easy” form of CSR engagement in the sense that it requires little managerial effort beyond the signing and posting of a cheque.”

“But, while philanthropy can be seen as one (fairly basic) component of CSR, it is certainly not the case that CSR is limited to philanthropy alone.”

“Both corporate philanthropy and Corporate Social Responsibility help define a company’s reputation and image and create both goodwill with the community and prospective customers. They’re also growing trends in the business community, with many corporations setting up departments dedicated to philanthropy or integrating social responsibility into their overall operating strategies. However, the two strategies differ in everything from what’s required to the way they impact the company and the public.”

Sarah A. Altschuller, associate in the CSR practice of Foley Hoag LLP in Washington, D.C. Vice-chair of the CSR Committee of the ABA Section of International Law

verbatim

hoW does csr differ from philanthro-capitalism?

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Stakeholder analysis often requires a lot of painstaking work in identifying the many

parties to a process or an outcome. However, many decision-makers tend to pay little attention to this most important step towards Sustainability in strategic outcomes and, for the purpose of this article, practical Nigerian (content supply) chain sustainability.

WhY staKeholDer analYsis?

Outcomes and processes matter (Whittington ’91) and these days pluralistic, socially embedded outcomes matter a lot more. Today’s companies largely struggle between the fashion or regulatory requirements to report outcomes that demonstrate compliance to a minimum level of social responsibility and only the discerning few realize the strategic imperative of pursuing socially embedded outcomes.

A typical example is the contrast between outcomes in Norway and Nigeria. Corporate outcomes from oil and gas activity in Norway result in an overall improvement in the quality of life and significant stakeholder alignment. In contrast, for Nigeria, over the years corporate outcomes suggest varied levels of progress in achieving stakeholder alignment. In actual fact, the consensus position will probably hold that corporate oil and gas activity has led to significant gaps between stakeholder requirements and corporate social responsibility.

Many companies opt to turn profits subject to the “constraint” of meeting other stakeholder requirements rather than as a result of a deeply embedded corporate value and belief system that makes it possible for stakeholder requirements to be embedded in the strategic fabric of the organizations. The fact is that corporate “speak” is different from

corporate “action”. Let us go back to one of my favourite tools for analysing theories of action- the Whittington matrix. The matrix classifies any room-full of companies into four (4) separate categories based on the processes and outcomes that their corporate actions (not corporate speak) reveal.

Box A companies believe that they should pursue the outcome of profit maximization to the highest height; they adopt a rational planning process to ensuring that they

achieve their desired outcome and the shareholder is “the stakeholder” which must be satisfied at all costs. Corporate speak may attempt to portray that other stakeholders are important but corporate action reveals that the other stakeholders may largely be treated as a constraint factor. Box B companies prefer to focus on the outcome of profit maximization but do not believe in long term planning as survival is perceived to be short-term and market-determined. Efficiency is the watch-word and though corporate speak may attempt to portray that stakeholders are important the company’s focus is on short-term survival and profits.

Stakeholder relationships are not considered significant for this group of companies; evidence of this is the apparent lack of commitment to a “process” of any sort of engagement whatsoever. Box D companies believe in some form of stakeholder engagement but this is largely limited

Stakeholder Alignment: Towards practical Nigerian Content in Achieving Supply Chain Sustainability

Feso Bright

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One of the most meaningful ways you can give your employees a sense that their contributions are valued and their voices heard is by involving them in decision-making.

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to internal stakeholders within the organization.

The focus is on pluralistic outcomes aimed at satisficing and based on internal bargaining. However, there is no belief in a deliberate process as there is the conception of bounded rationality. External stakeholders are not highly regarded but internal resources are given a high premium. Corporate speak my attempt to portray that all stakeholders are engaged but the actions show that internal stakeholders are the primary focus of all action. Finally, we have the Box C companies which focus on pluralistic outcomes as well. These outcomes such as length of service, community development and other actions which take into cognisance the social embedded nature of business aim to attain stakeholder alignment. Corporate speak is also in tandem with corporate actions as these two positions feed into corporate strategy and ensure improved quality of life for the community.

This ultimately leads to supply chains with a greater chance of success than those riddled with unsatisfied stakeholders with enough interest and power to hinder the long sustainability of business operations. My position is not to lay a claim to re-inventing the wheel on stakeholder engagement but to cause a re-think of corporate strategy and a renewed commitment to a “structured approach” to achieving stakeholder alignment through corporate actions and outcomes pursued. In order

to do this we have to analyse the concept of stakeholder a little more closely.

the ConCePt of staKeholDer:

The concept of stakeholder deals with two powerful questions which every business operation must consider: “who has the power to influence” and “who is interested” in your activities?”

David Needle (2009) will tell you that every business has an environmental context. But the power-interest matrix by Gardner et al actually alerts us to the fact that not only do our businesses have the internal/ external contexts but there are actors (called stakeholders) who have some certain levels of interest in our business activities and some who have the power to influence those activities. The power-interest matrix allows us to understand how to treat the various stakeholders by classifying them according to their different combinations of power and interest.

The stakeholders with low power and low interest require minimal effort by a business; this outlook allows the company to apportion its resources such that waste is not created in trying to engage certain stakeholders who do not require as much resources as those with more power or interest. The Stakeholders with low power and high interest must be kept informed about the operations of a business. Processes and outcomes of the business matter

to this set of stakeholders even though they may not have high levels of power to influence the company’s operations.

The stakeholders with high power and low interest must be kept satisfied otherwise they become a problem while the high power- high interest stakeholders should be treated as key players and involved in outcomes and processes of the business. Some might ask: how practical is this? Look at the supply chain - Why is Nigeria’s oil and gas supply chain riddled with so much anomaly? I reckon that most companies that have contributed to this situation have adopted the position that a structured approach to stakeholder alignment is unrealistic and impractical. How do you factor-in “forced payments” to rogues in government agencies, the Navy, Armed forces, rogue-leaders and members in the host communities and deal with daily security and infrastructure challenges? How do you balance your yearly budgetary constraints with the need to achieve “alignment”.

Let us face the facts; businesses in Norway have achieved socially embedded outcomes that have improved the general quality of life in their host communities through a consistent commitment to structured processes and strong levels of stakeholder alignment relative to those in Nigeria. This is not to say that the commitment to profit-making by businesses is any less important; but sustainable profits are obtained on the back of a thorough sense of responsibility to all stakeholders involved. But first a business must dimension its stakeholder space appropriately; this process is known as stakeholder mapping.

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the Whittington matrix

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The model below represents an adaptation of the power-interest matrix and a needs assessment of sorts. What this entails is the careful listing of as many significant stakeholders as can be determined by a business. The next step is a careful detailing of the requirements of the stakeholders and the contributions expected of the stakeholders. This gives off a notion of give and take- establishing a form of relationship between the parties.

For example, if a host community is a beneficiary of a local community content programme or a party to a GMOU (Global Memorandum Of Understanding) with an oil company, there is some level of give and take from both parties.

I think that two most significant lessons we can learn from this model are:(1) Stakeholder engagement goes beyond the “Oil Company – Host Community” relationship(2) Stakeholder engagement can be understood, measured and accountability can be apportioned

Many corporate teams assume that stakeholder engagement begins and ends with the host communities; but what about the government agencies, regulators, trade associations et al? Is there an integrated strategy with a holistic, proactive approach to the subject or do we find ourselves in the administrative or reactive side of the decision-making isles?

Yes, it is possible to engage the government and regulators in order to achieve real stakeholder alignment. Certain corporate unofficial, off-the-record actions may postpone a disruption to supply chain but they will not give a lasting solution. Once we are able to measure the level of stakeholder engagement of a business we can then determine what the current level of corporate social responsibility is.

The ultimate objective of stakeholder engagement is stakeholder alignment. Stakeholder alignment is a situation in which the quality of life as a result of business activities is greatly enhanced; stakeholder alignment allows for a win-win situation, advantageous compromise, competitive advantage, Business Sustainability, Supply Chain Sustainability and much more. In today’s Nigeria, local content is embedded as one of the pluralistic, socially embedded outcomes, which every oil and gas corporate must strive to promote and this goes down the whole value chain. More importantly the supply chain must attain a level of sustainability with this new perspective.

Do we find companies struggling to meet the “requirements” of the Nigerian Content Monitoring & Development (NCDMB) as a legal requirement? Perhaps, yes. These are the level two companies. Do we

have companies that meet these requirements as a result of a deep-seated corporate system? Perhaps yes. The third set of companies are those that believe in the principle of avoiding harm; doing just enough to be right and fair within the context of the country where they operate.

They may not improve the quality of life of their stakeholders as long as they are able to meet the ethical responsibilities benchmark; these are the level three companies. The level four companies are in the most favourable position. These companies are able to meet their philanthropic responsibilities not just in terms of speak but action as well; these companies are able to improve the quality of life of the community and offer substantial resources. This would mean that a level four company is able to reach out to all its stakeholders and offer tangible value for their partnership.

In the final analysis, for a company to achieve practical Nigerian content and supply Chain Sustainability, it must attain stakeholder alignment by initially separating its corporate speak from its corporate actions.

Feso Bright is the Director of Strategy and Energy Consulting with the Thgirb Company. He is also the proprietor and community moderator of themixoilandwater.com

Column


18

Poly-Crystalline solar Cellsa form of Photovoltaic cells that use wafers made from multiple small silicon crystals to absorb sunlight for conversion into electricity.

reCyClingrecycling turns materials that would otherwise become waste into valuable resources. Collecting used bottles, cans, and newspapers and taking them to the curb or to a collection facility is just the first in a series of steps that generates a host of financial, environmental, and social returns. some of these benefits accrue locally as well as globally.

Photosynthesisthe process of converting light energy to chemical energy and storing it in bonds of sugar.

reforestationthe action of renewing forest cover, by natural seeding or by the artificial planting of seeds or young trees.

QuillingQuilling is an economic craft which involves economic craft rolling, folding, twisting or otherwise shaping narrow strips of paper and arranging them to create beautiful designs.

smokeless fuelsolid fuel, such as charcoal, that does not release smoke when it is burned.

solar thermal energysolar thermal energy technologies use mirrors or lenses to concentrate the sun’s heat to a level sufficient to boil water and create steam, which can then be used to produce electricity by driving a turbine.

solar radiation managementsolar radiation management (srm) projects are a type of geo-engineering which seek to reflect sunlight and thus reduce global warming.

GlossarY

q

s

p

r

19

un global ComPaCtthe united nations global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption.

GlossarY

u

triPle bottom-linethe triple bottom-line consist ethical criteria for business success, environmental sustainability and social responsibility used as criteria when judging the overall performance of a company, in addition to purely financial considerations.

Voluntary emission reduCtionVoluntary emission reductions (Vers) are carbon credits provided by emission reduction projects that have attained voluntary third party approval but have not been certified by official un-backed offsetting schemes such as the Clean development mechanism.

Waste managementthe management of waste collection, handling, processing, storage and transport from where it is produced to where it is finally disposed. see waste prevention.

traffiC managementthe direction, control, and supervision of all functions incident to the procurement and use of freight and passenger transportation services.

Voluntary Carbon standardthe Voluntary Carbon standard is a quality standard for providers of carbon offsets from projects that operate outside of official un-backed offsetting schemes such as the Clean development mechanism (Cdm.

Waste PreVentionan aspect of waste management that involves reducing the amount of waste we produce and minimising the potential harm to human health or the environment from packaging or ingredients in products.

t

v

w

source:1. http://www.businessgreen.com/glossary/corporate-social-responsibility-csr2. http://biology.clc.uc.edu/Courses/bio104/photosyn.htm3. www.handmade-craft-ideas.com/what-is-quilling.html4. www.merriam-webster.com/dictionary/reforestation 5. http://www.businessgreen.com/bg/glossary/1805503/solar-thermal-energy-ste

6. http://en.wikipedia.org/wiki/solar_radiation_management7. http://www.bing.com/dictionary/search?q=define+triple+bottom+line&qpvt=triple+bottom+line+definition&form=dtPdia8. http://www.thefreedictionary.com/traffic+management9. http://www.unglobalcompact.org/

10. http://www.businessgreen.com/bg/glossary/1803024/voluntary-emission-reduction-ver11. http://www.businessgreen.com/bg/glossary/1805124/voluntary-carbon-standard-vcs12. http://www.epa.ie/environmentinfocus/glossary/

20

In the wake of the emerging competitive market economy in Nigeria, Corporate Social Responsibility (CSR) has now moved from the back seat of corporate policy and is now in use, albeit, as a tool for achieving competitive advantage in various industries and sectors where the deregulation policy has broken former corporate monopolies and brought about competition among companies within the sector. However, public sector support for Corporate Social Responsibility (CSR) is still weak due to the ignorance of policy makers (and unfortunately, most captains of industry) on the elemental constructs of Corporate Social Responsibility (CSR) and its impact on sustainable development. The overriding need to deliver sustainable and equitable development underscores the importance of achieving a better understanding of the role of public policy in relation to corporate social responsibility and its potential to contribute to the development agenda.

In some countries, interest is increasing in the possible alignment of the public good outcomes of CSR activities with public sector priorities. For example, governments of developing country are beginning to view CSR activities as a means to enhance sustainable development strategies, as a component of their national competitiveness strategies to compete for foreign direct investment and to position their exports globally, and to improve poverty focused delivery of public policy goals. The role of government cannot be over-emphasized in this regard. Government need to take a lead by ensuring effective governance and a business environment that encourages CSR. This means that the government needs to provide a functioning regulatory structure, and effective delivery mechanisms for public services.

In my opinion, as we clamour and encourage for more foreign direct investments, the active engagement

of our Investment Promotion Agencies development of a National CSR Strategy to promote corporate social responsibility should be undertaken with the aim of making concerted efforts at meeting the core challenges facing us as a nation. Corporate social responsibility is however, not a substitute for political action, but rather, it augments the responsibility borne by the political sector, businesses and civil society and goes beyond what is required by law. CSR is a fundamental element in a country’s social market economy system.

The development of a National CSR Strategy would create a framework that focuses on allowing market forces to develop and, at the same time, seek to square freedom of action with the active assumption of responsibility. This would support the economically-stable, socially-equitable and e n v i r o n m e n t a l l y - c o m p a t i b l e development of business.

Foreign direct investment – in all its forms – is at best only a modest force in raising living standards and enhancing economic and social welfare around the world. But the evidence introduced here shows that the positive benefits from main-line FDI activities can be much larger than usually portrayed. These positive benefits cannot be assumed to arrive – and negative damages avoided – simply by allowing market forces to operate on their own. Instead an array of outside interventions, outside pressures, outside support mechanisms are needed to optimize the contributions that FDI can make to development.

The real take-away for those seeking to put into place business practices that actually lead to real and sustainable development is twofold. Although difficult, measuring the impact of FDI, as with CSR itself, is worthwhile to test assumptions about what is working and what is not. Second, we need to redirect our focus to the quality of FDI coming into our country rather than its quantity. Simply increasing investment will not necessarily deliver development benefits.

A truly responsible business commitment to development requires businesses/companies to think and act like long-term partners, working in tandem with government, other firms and community groups to nurture sustainable local industries. And just as business needs good governments, governments need willing and creative private sector partners that are willing to listen and collaborate in setting—and investing in—long-term development objectives.

(Concluded)

Ini Onuk is the Lead Consultant/CEO of ThistlePraxis Consulting Limited (www.thistlepraxisconsulting.com), a fast-rising Consultancy on Assessments and Strategy based in Lagos, Nigeria with footprints across Africa. She is the convener of the Africa CEO Round-table & Conference on Corporate Sustainability & Responsibility (AR-CSR™) and curates a Thought Leadership Series on Sustainable Development, themed “Sustainable Conversations™”. Ini lectures in her spare time at the CSR Centre of the Pan-African University and is a think tank member of the World Entrepreneurship Forum. She can be reached at [email protected].

Column

Rethinking the Linkages Between CSR and Foreign Direct InvestmentsIni Onuk...continued from last edition

23

DOING GOOD: BEYOND CORPORATE PHILANTHROPY

Dr Uwem E. Ite

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there are various perspectives on the meaning and application of the concept of Corporate Sustainability Responsibility (CSR). For many critics, CSR has become a religion with too many prophets due to the perceived lack of solid theoretical foundation. On the other hand, proponents of CSR tend to emphasise its role and importance purely

from their understanding and perspective of what is happening in developed societies, as well as their expectations from developing countries. In the process, several terminologies have been used, often interchangeably, to characterise and describe CSR. These include ‘corporate philanthropy’, ‘corporate citizenship’, ‘corporate sustainability, ‘socially responsible investing’, ‘sustainable responsible business’, among others. This has resulted in considerable confusion in the theoretical understanding, practical implementation as well as the objective measurement of the outcomes and impacts of CSR for businesses and the society at large.

24

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Several definitions of CSR

exist based on the standpoints

of academics, business

organisations, governments, Non-

Governmental Organisations,

among others. For example,

the World Business Council

on Sustainable Development

(WBCSD) maintains that CSR is

“the continuing commitment

by business to contribute to

economic development while

improving the quality of life of

the workforce and their families

as well as of the community and

society at large”.

Similarly, the Business for Social

Responsibility (BSR), another

leading CSR organization, defines

CSR as “operating a business in

a manner that meets or exceeds

the ethical, legal, commercial

and public expectations that

society has of business”. The BSR

definition goes on to show that

CSR is more than a collection of

discrete practices or occasional

gestures, or initiatives motivated

by marketing, public relations or

other business benefits.

Rather, it should be viewed as

a comprehensive set of policies,

practices and programs that are

integrated throughout business

operations, and decision-making

processes that are supported and

rewarded by top management.

Against the above background,

it is clear that CSR is about

policies, strategies, practices and

programmes aimed at giving

something back to the society. It is

frequently a company-wide effort

- therefore CSR initiatives would

normally be part of a company’s

routine operations, with its

economic profit serving the long-

term goal of contributing to social

welfare.

On the other hand, corporate

philanthropy is strictly an executive

decision, with only senior

management deciding when and

how much to donate as well as

the recipients of such donations. It

tends to involve ad-hoc and very

specific projects or programmes

aimed at short-term social impact

and long-term financial gain.

CSR is not synonymous with

corporate philanthropy. It is

certainly not an alternative

mode of CSR - rather corporate

philanthropy is the most basic

level and the entry point for

the delivery of CSR by business

organisations. Taken together,

corporate philanthropy and CSR

go a long way in helping to define

a company’s reputation and image

as well as creating social goodwill.

The unifying factor between

CSR and corporate philanthropy

relates to the overriding sense of

‘responsibility’ to the society at

large.

WHOSE, WHICH AND WHAT

RESPONSIBILITY?

Corporations are increasingly

required to deliver positive

impacts to the communities and

the environment in which they

operate in order to respond to the

concerns of stakeholders. Amongst

others, stakeholder engagement,

community development and

corporate philanthropy are

seen as key elements of CSR. As

companies redefine their interest

CSR is about policies, strategies, practices and programmes aimed at giving something back to the society

25

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in CSR and their relationship with

communities, they seem to be

moving away from simply being

a good corporate citizen towards

a role that combines being good

corporate citizens and global

competitors.

Although the theoretical debates

in the definition, meaning and

focus of corporate citizenship

have been well documented, the

vision, practice and outcomes of

corporate citizenship are being

disputed. For some, it holds

out the hope of mobilising a

synergy of competencies and

resources from across traditional

sectoral boundaries in creating

innovative solutions to the

challenges of poverty, inequality

and environmental insecurity.

For others, it is a screen behind

which the growing power of

global business is thinly shrouded.

While some writers view

corporate citizenship and CSR as

synonymous, others argue that

corporate citizenship focuses

more on internal organisational

values, while CSR focuses on

the externalities associated with

corporate behaviour. Yet the central

tenet of corporate citizenship

focuses on the extent to which

businesses assume the economic,

legal, ethical and discretionary

responsibilities imposed on them

by their stakeholders. These

responsibilities consist of:

• Economic responsibility

to be profitable,

• Ethical responsibility to

do that is right, just and fair,

• Legal responsibility to

abide by the laws of the respective

society, and

• P h i l a n t h r o p i c

responsibility to contribute to the

various kinds of social, educational,

recreational and cultural purposes.

Corporate citizenship therefore,

ranges from proactivity to

reactivity. A reactive business

rejects the responsibilities

assigned by its stakeholder

groups. A proactive business is

aware of, meets, and anticipates,

the responsibilities imposed by

its stakeholders. Invariably, a

proactive business will assume

its responsibilities by engaging

in activities such as compliance,

information seeking, scanning,

communicating and modification

of organisational processes.

There is no doubt that businesses

play an integral role in their

communities. In many cases this

role is often indistinguishable

from the society at large. In

recent times, the relationship

between business and local

people has been scrutinised by

CSR theories calling upon notions

of stakeholder responsibility, with

local communities emerging

as the key entity in discourses

of stakeholder responsibility.

The result is that stakeholder

theories have left businesses with

limited option - except to adopt

community relations’ strategies

that underpin their “licence to

operate”.

On the other hand, the notion of

shareholder responsibility is the

prevailing belief that the prime

motivation for all business activity

is to be profitable, with a view to

increasing stockholder returns.

Neo-classical economic theories

of a business existing entirely

for profit maximisation were re-

iterated in 1979 by Friedman who

stated that the role of a business is

meet the financial requirements of

its shareholders, with the ultimate

goal of achieving commercial

success.

However, stakeholder theory stands

at odds with these established

notions by asserting that

businesses have responsibilities

beyond their board of directors

and shareholders. Underpinning

current CSR principles, stakeholder

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Invariably, a proactive business will assume its responsibilities by engaging activities such as compliance, information seeking, scanning, communicating and modification of organisational processes

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theorists such as Freeman (1984),

highlight the fact that a business

has responsibility to all the people

or interest groups which it has

a direct or indirect association.

In other words, businesses are

required to consider the needs of

stakeholders and not merely the

financial returns of shareholders.

In the process, the role of business

in society has shifted beyond

recognition. The result is that

the far-reaching consequences

of stakeholder theories has

forced companies to balance

their current or potential actions

against the interests of their

diverse and disparate stakeholders,

whilst maintaining shareholder

profitability in order to stay in

operation.

DEBATE ON CSR AND

CORPORATE PHILANTHROPY

Corporate philanthropy is the

most basic level and form of

CSR. Policies on corporate

philanthropy (i.e. the donation

of gifts or money), engagement,

volunteering, community

development, socially responsible

investment, and partnership are

all embodiments of the emerging

business-community relationship.

The adoption and implementation

of these policies has now become

an expected demonstration of

business responsibility to its

local communities. Corporate

philanthropy has also become

a common way for companies

to relate to community

stakeholders. British indexes

such as the FTSE 4 Good and

Business in the Community’s

Per Cent Club, measure levels

of corporate philanthropy

and are believed to determine

companies’ commitment to CSR in

conjunction with other processes,

such as environmental and social

reporting.

However, the overall benefits of

corporate philanthropy have been

widely hotly debated. Proponents

of corporate philanthropy tend

to focus on the moral drive for

business to actively contribute

to the community. They see

it an example of a genuine

community relation strategy, as

well as a win-win situation for

business and local community

stakeholders. This is particularly

the case because corporate

philanthropy has emerged

from the broad framework and

principle of corporate citizenship

which sees businesses becoming

fully functioning members of

society adopting, accepting

and responding to the resulting

rights and responsibilities. In

other words, proactive corporate

philanthropy can be seen as a way

in which business organisations

compensate community

stakeholders for what they (i.e.

businesses) have ‘taken’ from them

(i.e. the society). This explains why

many business managers often

justify corporate giving on the

basis of its claimed benefits to

shareholders. For example, benefits

may arise from the social goodwill

created by corporate involvement

with charitable causes. This can

lead to enhanced employee

morale, customer loyalty, and more

lenient treatment by regulators or

government officials.

On the other hand, several critics

have argued that corporate

philanthropy is a hollow public

relations gesture, with businesses

sponsoring ‘good causes’ as

a cynical, strategic, marketing

strategy to achieve increased

profits. In addition, it is also

claimed that that corporate

philanthropy may enable business

managers and directors to support

their own pet charities at the

expense of shareholders, while

also enhancing the reputations of

such managers or directors in their

social circles as well as provide

them with other exclusive benefits,

e.g. tickets to events, access to

celebrities, etc.

In many developing societies,

corporate philanthropy remains

the dominant way that businesses

relate to their stakeholders, even

though the range of community

relations strategies companies can

adopt are numerous. However,

within the context of Africa

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29

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some corporate philanthropy

programmes are peripheral to the

business strategy of many business

organizations. They seem to be

‘bolt-on’ rather than ‘built-in’. They

are largely unstructured and often

implemented on an ad-hoc basis.

Such initiatives or programmes

are normally the first candidates

for budget cuts during periods

of business financial crisis. In

addition, given the ad-hoc nature

of some of the initiatives, there are

cases whereby communication

between the two parties (i.e. the

recipient and the donor) ceases

after the completion and hand

over of philanthropic projects.

Many donors fail to check on how

and whether their donations had

fully met the development needs

of the recipients. Some donors

do not even consider monitoring

and evaluation of the donations as

part their core business activities

or community relations strategy.

This has implications for the

Sustainability of the initiatives.

In contrast, Western corporate

philanthropy practices often build

in some form of regular contact

and dialogue with the recipient.

Dialogue between the donating

business and the community

recipient may be guided by the

belief in the ‘business case’ for

corporate philanthropy or by the

cultivation of improved business-

community relations. The lack of

post-project evaluation also has

implications for the collection and

sharing of best practices among

businesses involved in corporate

philanthropy.

CONCLUSION

The relationship between

businesses and the resulting

rights and responsibilities of each

party has been sealed within

Western expectations of CSR,

yet it is not a universal notion.

The responsibility a business

has to local communities and

the role it is expected to play

in society is subjective notions

and totally reliant upon cultural

understandings and the dominant

CSR discourses. Although the

dominant form of the business-

community relationship is only

relevant to the developed world,

it has increasingly been applied

to developing country contexts.

This attempt to ‘transfer’ western

notions of business-community

relationship, to developing

countries without adjustment or

acknowledgement of the vastly

different environments into

which it is being relocated, leaves

its potential to succeed highly

questionable. The differences in

the circumstances of developed

and developing countries, coupled

with diverse perceptions of

business-community interactions,

within the multifarious cultural,

social, political and economic

environments, both highlight

the need for CSR policies to be

developed with relevance to each

individual context.

Although philanthropy can be

seen as one and fairly basic

component of CSR, CSR is not

limited to philanthropy alone.

CSR is something far greater than

one-off acts of charitable giving

by businesses as part of their

strategy to be (or seen to be) a

good corporate citizen. Going

forward, there is urgent need to

assess the current practices of

corporate philanthropy in Africa

and to measure the impact of

the emerging trends of corporate

philanthropy in the continent. This

will enable the precise clarification

on the evidence required for

objective reporting on the overall

impact of corporate philanthropy.

The view is to identify and share

the most promising and practical

steps towards doing good.

Business organisations in Africa

must begin now to strategize

on how to do better – by going

beyond corporate philanthropy.

This is because the rationales

for businesses to engage in CSR

are still very clear compelling

- CSR can be a win/win by

creating strategic leverage or

competitive advantage as well as

being necessary to improve the

community environment in which

business must operate.

ReferenceSadler, E. and Ite, U. E. (2006) Forms and Motivations for Corporate Philanthropy in Southern Thailand. Research Report. Department of Geography, Lancaster University, Lancaster, LA1 4YB, United Kingdom.

Dr. Uwem Ite is, currently, the Team Leader, Information, Education, Communication and Capacity Building within the Sustainable Development and Community Relations Department, the Shell Petroleum Development Company of Nigeria Limited.

The perspectives presented in this article are personal. His previous publications on CSR and Sustainability can be found in various international journals, including: Corporate Social Responsibility and Environmental Management; Sustainable Development; CSR Files; Journal of International Development and Review of African Political Economy.

He can be contacted through: +2348024299915 or [email protected]

Some donors do not even consider monitoring and evaluation of the donations as part their core business activities or community relations strategy. This has implications for the Sustainability of the initiatives.

30

csr and sino-african relationshipsDimeji Belo, Ivor Hopkins, Olawale Shojibi

oPinion

Natural resources have always performed a major function in the civil and economic constraints that have frustrated the efforts of progress for numerous African nations. In the recent past, these factors have motivated and significantly hyped armed civil wars. Economic dividends from the exploitation of natural resources are not only used for sustaining militias, but also for the personal gain of dictators and for gaining political leverage.

Countries like China, who are active participants in the economic environment in Africa, have the power to influence governments positively in approaching a good method of ruling and ensuring that the wealth is spread across stakeholder groups. These Heads of States have enormous respect for the Chinese Premier and as a result, are more likely to favour Chinese investment where funds need to trickle down the social ladder to serve citizens better in the areas of healthcare and infrastructure.

In recent years, China’s financial investment in Africa has increased to great heights - but it is imperative to highlight that the trade with the USA is still larger than that between Africa and China. In the current global economic climate, things such as straightforward ‘Letters of Credit’ can be obtained but often times on terms that are less favorable.

These conveniences in a long way determine how things are run in the commercial scene internationally. In the best interest of all stakeholders, it is advised that the two super powers and Africa establish a mutually beneficial framework where all active participants can happily enjoy dividends. 2006 was a landmark year in China-Africa relations when the Beijing Summit of the Forum on China-Africa Cooperation on November 5, 2006 affirmed the birth of “the establishment of a new type of strategic partnership between China and Africa, featuring political equality, mutual trust, economic win-win cooperation and cultural exchanges”. China has been given the red carpet treatment by a lot of African governments as a core investor in the local economy, a model for development and an ally in a world where there is growing unease over what African governments perceive to be the patronizing behaviour of the European leaders.

It is estimated that China has now over 800 Chinese companies who are doing business in over 40 African countries with 480 involved in joint ventures with African firms. Addax Petroleum with considerable interest in the oil and gas industries in Nigeria is one of many. China is also Africa’s second-largest trading partner after the United States. China imports almost a quarter

of its energy requirements from African countries. Investments are also made for China in African countries in areas such as refineries and oil wells on behalf of the Chinese Government, monitored by the Chinese National Oil Company in conjunction with other private firms.

With this increased investment and participation on the African continent, the economic benefits and the benefits of the technological expertise being transferred is, in no doubt, advantageous to the African continent. But in consideration of the environment and the stakeholders within them a significant question is being raised. This is due to the fact that, unlike China’s other trading partners such as the USA, the majority of leaders on the African continent

China has been given the red carpet treatment by a lot of African governments as a core investor in the local economy, a model for development and an ally in a world where there is growing unease over what African governments perceive to be the patronizing behaviour of the European leaders.

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have never been seen to have the best interests of the environment or its Sustainability at heart.

Therefore, with all this increased activity, the economical and technological benefits are still not sufficient to stand alone. Considering the Sustainability of the African countries which they operate in and seeing that these are the main points of interest of our legislators, there needs to be an increased stakeholder voice among such investments.

ASSISTANCE WITHOUT CONDITION (QUESTIONABLE) Although China has a strong willed long-term decision of not attaching conditions to the aid they give very generously to African countries, they do lay out certain terms and conditions on deals they struck within the continent. For example, in 2004 China awarded Angola a $2bn financial facility for resuscitating infrastructure damaged during their internal crisis, but in return China would get 10,000 barrels of oil per day payback.

Some writers have not judged China badly on this account on the basic concept of ‘what is fair is fair’. It is argued that these countries do not have the credit worthiness to borrow funds at favourable rates from institutions such as the International Monetary Fund (IMF), the Paris Club or even the World Bank. Borrowing funds from these institutions mean their already pitiable currencies are devalued amongst other huge ramifications.

Why not a mutually beneficial relationship with the Chinese instead? With all the additional funds available to countries on the continent, is it fair to accept such support which does not accommodate for sustainable investments? The main grouse with political watchers over the deal with Angola was a clause that only 25% of the construction projects would be subcontracted to Angolan companies. In the area of negotiations, China has to give a freer hand and compromise more so that deals are seen as more mutually beneficial, and the sustainability and future of the country is considered more in such negotiations.

In the past, it can be viewed across other similar high powered business

and trade negotiations; it has been proved that mutual benefit can be achieved. In the same vein, after the visit of Premier Hu, China gave African States $2.5bn loan for the construction of capital intensive projects such as roads and railways, but secured an $8.3bn contract for modernization of some of Africa’s most archaic railway network. The Nigerians didn’t seem to mind this mutually acceptable partnership and there have been little or no complaints since the deal was sealed. There is also the promise that a certain amount of skilled and unskilled local Nigerian talent will be part of the project. The Nigerian government and its people see this as a chance to reduce unemployment, crime and to achieve sustainable economic growth.

CULTURE AND CSRIn defining CSR, neoliberal observers tend to view it basically as the endorsement of a set of voluntary regulations, and guidelines, initiated and driven by the corporation.

The neoliberal discussion on the subject matter of CSR generally shares the view articulated by Milton Friedman in the New York Times on September 13, 1970: ‘…there is only a single manner of social responsibility of commerce -to expend its funds and initiate in activities aimed at growing its revenue so long as it remains within its remit and within the law, and aim to control market share within a commercial environment without any form of malpractice that goes beyond standards of the Office of Fair Trading”. Neoliberal is the voice of business as usual and CSR is for them a distraction!

One of the most contentious matters of discussion between the neoliberal and neo-Keynesian

commentators is whether Corporate Social Responsibility is a liability or an advantage to the corporate bottom line. While some neoliberal economists remain steadfastly sceptical, others are unsure. Some argue that keen watchers have not thoroughly assessed the cost implications linked with the different types of CSR activities, while others set out to research into the interaction between sustainability and financial performance and concluded that good sustainability-rated firms have fared better than the likely portfolios.

THE EFFECT CSR HAS ON THE BOTTOM LINE?

According to Paul Burke at consultancy Acona, ‘one of the overarching benefits

oPinion

(World Press, 2011)

The main grouse with political watchers over the deal with Angola was a clause that only 25% of the construction projects would be subcontracted to Angolan companies.

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of high-quality CSR reporting is that it allows an organisation to take stock of itself, at the same time as informing its audience of its performance. ‘CSR reporting provides businesses with a good opportunity to look at themselves in the mirror and reflect this image back to stakeholders, demonstrating that they have responsible control over their organisations’ (Acorna, 2011). Differing theorists make a case for and against the effect of CSR on an organisation’s bottom line, as CSR activities such as charitable deeds, establishing health and safety procedures and supporting local community development increase the costs for the company and may give the view that this will have a negative effect on the company’s finances and give them less of a competitive advantage in comparison to its rivals in the marketplace who do not engage in CSR activities (McGuire et al, 1988, pg.855). There is, however, reliable information to support the notion that CSR has a positive impact on the financial performance of a firm, and the goodwill generated by a company through corporate social responsibility efforts is high as the public is knowingly more favourably disposed to patronising their products and services and the firm is on the good side of the government, its employees and its banks and business partners (McGuire et al, 1988). In the past, resource rich countries in Africa such as Nigeria have regretted allowing oil and gas firms to engage in activities which, although benefitting the country’s economic situation, have had a lack of investment in the environment which they operated. Since the 90’s oil companies in Africa have begun to make large amounts of investments in sustainable activities (all be it to offset some of the damage they have done in the past) without receiving any negative effect to their bottom line, shows that it is a feasible feat to accomplish. Early CSR theorists Graves and Waddock (1994) explain that good social corporate responsibility programs by a company increases its chances of rapid expansion as banks and other investors are willing to support ethical ventures easier.

Socially responsible companies also have less risk of negative rare events. Overlooking negative social and environmental externalities when

valuing a company might be equal to ignoring significant tail risk. The risks related to CSR could be grouped into three categories: corporate g o v e r n a n c e , e n v i r o n m e n t a l aspects, and social aspects. Companies that adopt the CSR principles are more transparent and have less risk of bribery and corruption. In addition, they may

implement stricter and thus, more costly quality and environmental controls, but they run less risk of having to recall defective product lines and pay heavy fines for excessive polluting (Tsoutsoura, 2004, p6).

TRADE FRICTION

Foreign-relation issues such as cultural clash and even racism of the kind experienced by some African students at Chinese universities could drive a wedge between both sides. African businessmen continuously air their views in the strict process of conducting business in China. Anti-Chinese feelings based on these sentiments, however misguided, has already spilled over into protests and sparked violence in the Zamibian copper belt and Lesotho as well as other regions of the continent (Alden, 2005).

There are short and long term implications for China’s Energy Security which also involves its Africa relations directly or indirectly. The Chinese government’s efforts to meet China’s energy requirements are in a situation of immense pressure as it is faced with institutional and management difficulties. Bad liaison

and the conflicting aims of different components of the bureaucracy and tensions between the government and local energy firms have hindered development of a structured national energy framework. For progress and cohesion within China’s energy sector, a bill needs to be instituted where all stakeholders agree to rules of engagement with the role of the China National Oil Company being an advisory and structural one with minimal interference. There have been missions to initiate a more smooth running procedure within the industry and a more synchronized method of investment within and outside China. Laws and structural frameworks are part of a larger effort to balance market and administrative regimes, an increase in effective methods of supply, which is very much needed and demand moderation, and the government and companies in managing China’s energy challenges. With this in mind, African countries may (especially the resource rich ones) have a key role to play in China’s economy and resource needs in the future, hence there is no need for the continent to accept aid and projects from China without ensuring essential issues such as CSR and sustainability are embedded in their thinking and design.

SOFT APPROACHES

A good few commercial concerns have expressed their opinion in that it is necessary to develop a culture of mutual respect between Chinese companies and their African workforce, local communities and host States. The Chinese and their corporate citizens

There are short and long term implications for China’s Energy Security which also involves its Africa relations directly or indirectly.

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strive to practice equal treatment and living in harmony. On security issues, deeper understanding of the society means more safety.

Although the corporate chiefs and business moguls have highlighted on numerous occasions the importance of harmonious environments, these were modelled on the culture of Chinese companies that often keep a low profile, clearly distinguishing from the community and other active participators who are part of the decision making process. It should be noted at this stage that it is imperative that companies model their framework to suit the local mood and environment, of course with approval from the parent company in the host country which in this case is China. A lot of firms turn to government to settle disputes with local communities, presuming that this is stakeholder consultation, and that the federal government will create a larger framework for community engagement. Some Chinese firms on the other hand operating abroad in the long term are beginning to recognise the benefits of stakeholder engagement. This is also more important in sensitive industries such as oil and gas, mining and diamonds

and precious metals, as ethics and stakeholder relations are judged by the government and its agencies when deciding if or not to renew ‘licenses to operate’. Some may argue that the African systems though largely democratic governments these days are very corrupt, and government ministers can be bribed to obtain favour. It is to be made aware that there are strong sentiments with the ‘licence to operate’ and in extreme cases the decision to nationalise a company as these government officials most times have immediate and extended families who live in these local/rural communities and have to bear the brunt of ineffective management of the company’s social responsibilities.

GOOD GOVERNANCE AND RULE OF LAW

A good legal framework attracts foreign investors. That is what most African business environments are lacking at the moment. It is imperative that this is put in place in order to initiate a forum for advisory actions, and to punish law breakers. The path to sustainability and continued prosperity should include frameworks that can ensure, secure and maintain more economic, political, individual and social freedom. Sustainable economic policies or reforms must include transparent liberalisation of government companies, which the Chinese should encourage, as they stand to benefit from the benefits of liberalization, lower taxes and also reduced government intervention to make firms run more efficiently and offer the best services and products to consumers at competitive prices. Within a liberalised market, there is

free and fair competition (monitored by the relevant authorities such as the Ethics and Fair Trading Industry, most times specialised to deal with relevant industries). All forms of anti-trade or anti-business distorting policies should be eased, in an end to deal with the issue of African poverty in a straightforward and diligent manner. Without economic freedom, African countries will hardly get to the stage of poverty alleviation. All round, for all vested interests, it is best that good governance and rule of law prevail. A buoyant economy cannot exist without this freedom and control over Gross Domestic Product (GDP), which is the situation with a lot African countries. Despite the benefits of economic liberation, a good few many African Head of States are implementing unsound, even negative rules that have made both foreign and local investment reduce drastically. In the light of this tight economic climate, it is not very feasible for Africa to integrate the market economy. The declining economic climate has led to a decrease in foreign and local investment. It is a possibility that, with better foreign trade and international relations things could be what somewhat right, and even in this very tough economic climate with recessions all around the world, there can be peace even in doing business.

NOT ALL REPORTS FROM CHINESE OPERATIONS HAVE BEEN POSITIVE

Climate change is a burning issue with a lot of focus on China both locally and internationally at the moment. Climate change has a variety of consequences to people and the environment. The issues include adverse health problems for those that have been exposed to damaging environmental conditions. Climate change and variation are also expected to reduce water supply for a variety of purposes. As water achieves its status as a commodity in high demand, competition in accessing and using water sources will intensify. As a result, conflicts (here referred to as a dispute about social, economic, political and territorial-related issues) are more likely to occur as a struggle to utilise this scarce resource increases. Water-use conflicts are brought about when one water source is used for more than one use by different users

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Some Chinese firms on the other hand operating abroad in the long term are beginning to recognise the benefits of stakeholder engagement

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feature

there’s no such thing as corporate philanthropy!

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corporate philanthropy does not, or at least should not exist.

While corporations may give to charitable causes, it is not or should not be out of an altruistic sense of corporate social responsibility. Instead, done properly, corporate giving is simply a marketing or R e s e a r c h - a n d - D e v e l o p m e n t investment. Let me explain.

Several years ago, I moderated a panel of corporate giving officers for the Association of Fundraising Professionals Greater Philadelphia Chapter. One of the panelists was from a bank, at the time one of the nation’s largest credit card issuers. She told the group that there is no such thing as corporate philanthropy. I saw the mouths of about 100 people drop open. They were either surprised by this news or were shocked that a corporate giving officer would actually admit this. The giving officer from the bank went on to explain that corporations exist for only one reason: to enhance shareholder value. The bank contributed money only where a positive return on investment could somehow be expected.

Many people expect for-profit businesses to act with “Corporate Social Responsibility.” CSR is a term that came into use in the late 1960s. While there are many definitions

for CSR, Wikipedia defines it as “a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms.” Today, many nonprofit professionals seem to think that one component of CSR should be corporate philanthropy; they think that corporations should “give back.” News media have even recently done reports on the role of corporate philanthropy.

However, that’s not why corporations exist. Again, they exist to make money for their shareholders, not to perform selfless acts of charity. As for “giving back,” corporations do this every time they pay taxes, provide jobs, pay employees well enough so they can also pay taxes and donate money. As for corporate giving, it needs to accomplish something not just for the charity, but also the corporation.

Marc Gunther, a senior writer for Fortune Magazine, wrote in 2008, “I’m not a big fan of corporate philanthropy. Too often, it’s a feel-good exercise, generating little value for a company’s shareholders.

At its worst, it allows CEOs to use other people’s money to glorify themselves.”

On the other hand, corporate giving can benefit the charitable sector while also building shareholder value. Gunther went on to describe giving by General Electric, as an example: “Where’s the payoff for shareholders [from contributions to healthcare in Africa]? ‘We’re building reputational value and trust in places in the world where we aren’t known,’ [Robert] Corcoran[, President and Chairman of the GE Foundation] says. The company is also driving sales. While GE was launching a healthcare project in Rwanda, Paul Kagame, the nation’s president, asked to meet with Corcoran because the country wants to exploit methane gas under Lake Kivu, on the border with the Congo. Corcoran arranged for Kagame to

On the other hand, corporate giving can benefit the charitable sector while also building shareholder value.

Michael Rosen

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feature

meet John Rice, a GE vice chairman in charge of infrastructure, and the company is now on the verge of selling its equipment to Rwanda.”

In my own career, I’ve had experience with the idea of corporate giving as investment. A large university was implementing a coordinated direct-mail/phone fundraising campaign. However, they lacked sufficient budget resources to contact all of the alumni. So, they contacted a national video rental company headquartered in the same region. The university had no direct connection to anyone in senior management, but they were able to get access to the CEO. He promised the university a sizable challenge grant that allowed it to move forward with the campaign. The development staff was very happy.

That happiness was short lived, however. Within days, an angry marketing director contacted the university. He explained that the CEO had seized part of his budget to provide the grant. Unfortunately for the marketing director, who had fewer dollars with which to work, the CEO had not reduced his goal. So, the marketing director told the university that they could either help him reach his goal or forget about a grant the following year.

I worked closely with the university, and we developed a plan. The corporation was named in all campaign materials since they were providing a challenge grant. In

addition, alumni were encouraged to go into one of the chain’s retail outlets to get a special university video rental card and be entered into a drawing for a free cruise. The cruise was donated by a cruise company that was thrilled with the targeted advertising reach.

The result was that the video rental company exceeded its marketing targets and, therefore, renewed its support to the university. The university was able to conduct its

first-ever phone campaign which exceeded expectations. The alumni were happy because they had an opportunity to win a cruise while supporting their alma mater and having that support magnified by the challenge grant. And, the cruise company benefited through successful advertising to a target market it valued. Everyone won. But, it wasn’t altruistic corporate philanthropy. It was a corporate investment that benefited the university.

So, if you want to raise more corporate dollars, especially during these challenging times, don’t submit a grant proposal simply thinking that a corporation should give-back by giving to your organization. Instead, think how your organization can deliver value to the corporation. The value may be delivered in the short-term or the long-term. The value may simply be goodwill, or more video rental members, or it might be a vibrant arts scene that makes it easier to attract top-notch executives to the area. However it is defined, the more value you can reasonably and appropriately demonstrate, the better your chances will be for getting your request funded.

That’s what Michael Rosen says… What do you say?

Michael J. Rosen, CFRE is President of ML Innovations, Inc., a fundraising and marketing consulting firm serving nonprofit organizations and the companies that assist them. An AFP Certified Master Trainer and Certified Fundraising Executive, Michael is the author of the bestselling book “Donor-Centered Planned Gift Marketing.” Re-published with permission from www.michaelrosensays.wordpress.com

So, if you want to raise more corporate dollars, especially during these challenging times, don’t submit a grant proposal simply thinking that a corporation should give-back by giving to your organization.

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sustainable conVersations iitheme: driVing sustainable agriculture

for national deVelopment

events

thistle Praxis Consulting, in conjunction with the Etisalat Corporate Social Responsibility

Center, recently hosted the second edition of Sustainable Conversations, a Thought Leadership Breakfast Series on Sustainable Development with the theme; Driving Sustainable Agriculture for National Development. The event which took place on Saturday 21st of April 2012, at the Four Points by Sheraton, hosted some of the leading policy makers, experts and practitioners in the Agricultural sector.

The discussants at the event were a mix of professionals with local and international experience. They included the Moderator; Mr. Alex Aligbe, an international Agricultural expert, Mrs. Lucy Kanu, of the Idea Builders Initiative Mr. Larry Umunna of the Global Alliance for Improved Nutrition (GAIN), Mr. Zano Mataruka of , International Financial Corporation, Mr. Rasheed Sarumi, of SARO Group, and finally, Mr. Onajite Okoloko, GMD/CEO, Notore Chemical Industries, represented by Mrs. Ivana Osagie, of Notore Seeds Limited.

In her opening statement, Mrs. Ini

Onuk, the Lead Consultant/CEO of Thistle Praxis Consulting stated that; It was difficult to imagine that Agriculture was once the mainstay of the Nigeria’s economy, yielding a substantial percentage of our National GDP, and employing about 70% of our population. She pointed out that as other sectors with much potential, the challenge of good leadership and failure to evolve with trends, ensured the steady decline and near comatose of the sector. She also indicated that the partnership between Thistle Praxis Consulting and the Etisalat CSR center was in recognition of the credible work that Etisalat has done in line with their commitment to CSR development in Nigeria.

In his remark, The Director of Government & Regulatory Affairs - Etisalat Nigeria, Mr. Ibrahim Dikko, maintained that Etisalat believes that CSR is about how business conducts itself with regards to all its activities, which includes operating ethically, fairly dealing with all stakeholders and impacting the communities in which they operate.

Commencing the conversations, Mr. Alex Aligbe expressed his delight at

being at the event, describing it as “a privilege” to be in attendance. He stated that the aim of the discussion was to arrive at a set of conclusions or results that are concrete, deliverable and implementable within the context of sustainable development. He provided a background on the state of Agriculture in Nigeria asserting that Nigeria has about 34 Million Hectares of land area and 78% or 72 Million Hectares of suitable for various forms of agriculture. From 1996 to 2001, agriculture contributed between 20-30% of Nigeria’s GDP. 2007 till date, Agricultural contribution has risen to between 41-47% of GDP and by 2011 it was estimated to have risen to 44% of GDP. Over 70% of Nigeria’s population of 160 -167 Million, live in the rural areas.During the course of the conversations, the key challenges facing sustainable agriculture were deliberated upon. Access to land

3737

events

& Nutrition, Processing, Marketing and Distribution, private sector participation, improved seed variety and adequate research and development were identified as areas which needed to be improved in order to drive the Nigerian agricultural sector towards attaining its full potential.

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events

39

surveY

ThistlePraxis Consulting Limited is pleased to announce a survey designed to determine the status of Corporate Social Responsibility in Nigeria. No doubt, companies are increasingly recognizing the strategic importance of building business practices that create sustainable economies, environments and societies.

In the business world, Corporate Social Responsibility is an indispensable tool for corporate legitimacy and competitive advantage. For that purpose companies need to communicate their CSR strategy through an effective and credible media platform. The survey contains relevant topics of interest in the field of CSR including general questions about the companies as well as CSR specific questions about the past, present and future of their CSR activities.

This survey is to be completed by professionals and/or those responsible for the implementation of CSR/Social Performance/CSI, etc within their organizations. The results will enable us to ascertain the current status of Corporate Social Responsibility and Sustainability issues in Nigeria. The questionnaire contains quantitative as well as qualitative questions. The data will be analyzed by a team of research experts and made available in a report titled ‘THE STATE OF CSR IN NIGERIA: 2010/2011 ANNUAL REVIEW’. The report will be available in mid 2012, precisely at the Africa CEO Roundtable and Conference on Corporate Social Responsibility in June 2012.

ThistlePraxis Consulting hopes that this exercise would set an initial benchmark and a platform for dialogue with companies on improvement of their CSR policies and related performance targets in the long run. We are aware of the limitations of this survey and while

this survey aims to gain an overview of companies’ CSR polices and related measuring systems via verified self-reporting questionnaires, it does not seek to assess impacts and to make judgments on whether the impact of each CSR initiative is sufficient or inadequate, particularly on issues involving the environment or labour rights.

Although we will not survey and evaluate criticisms that the same company may have faced from media and civil society groups such as labour, environment and consumer organizations, we do hope that this research will facilitate

comprehensive dialogue on both positive and negative issues regarding corporate responsibility.

We simply wish to draw companies’ attention to increased global awareness on corporate accountability, transparency and international best practices’.

The survey is available on the following Websites: ThistlePraxis Consulting and the Africa CEO Roundtable and Conference on CSR (AR-CSR™). Interested professionals can also take the survey by logging on to: https://www.surveymonkey.com/s/Annual _CSR _ Rev iew_Nigeria_2011

For further details please contact: Emilia Asim-Ita, [email protected]; or [email protected]

NB: Individuals who take the survey between February 1 and February 29, 2012 will get a FREE 1-Year subscription of CSR Files. Simply take the survey and send an email to: [email protected] with proof (if you do, this will be easy).

the state of csr in nigeria: 2010/2011 annual reVieW

We simply wish to draw companies’ attention to increased global awareness on corporate accountability, transparency and international best practices’

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online resourCes

great sites for corporate social responsibility and sustainability

THE ‘10 mUST HaVE’ SITES ON CSR:

3BL Media: A recent newcomer, this site keeps getting better and better. TheCSRminute, a daily video digest covering relevant CSR and Sustainability news, is a fantastic idea. The 3BL team scours the global media to cover some of the most important events and news in the world of CSR. I especially have appreciated the aggressive compilation of leading bloggers in CSR. You’ll find them on twitter as theCSRfeed. They are very interactive and are collecting followers fast.

APEsphere: The name has multiple meanings, but is an acronym meaning “Agents of Progressive Enterprise”. The site has a broad range of topics within CSR and sustainability. Good writing and helpful content. You can follow the Apebot on twitter or connect directly with the 2 founders Andrew Newton or Angela Peterson Newton

Boston College Centre for Corporate Citizenship: We are big fans of BCCC. They offer

good research and are leaders in the field of CSR and Community Engagement. But for some of the good stuff, you have to have a membership, and it’s not cheap. The lowest price is $2000 - yikes! They are on twitter, but are not too active at this point.

Business Respect: This is Mallen Baker’s site, and he offers a collection of current news on CSR issues. Great resource section with reviews and rating system - very helpful. BusinessRespect is on twitter also.

CSRwire: This site has a huge following and is considered the standard for CSR news. It is an attractive site and easy to use. You can even participate as a member of the community by sharing your articles, video, audio and commentaries. On twitter they are CSRwire but they maintain a modest presence there.

Eldis: A massive site with a plethora of free resources. You can create a profile, interact with other members, view information by region, look for jobs,

even receive the content free on CD-ROm. Follow Eldis on twitter.

Ethical Corporation: This is the online version of the Ethical Corporation magazine published 10 times each year. While the quality of the podcasts is not always the best (background noise and other strange audio sounds) the resources on this site are numerous and of superior quality. They are on twitter as Ethical_Corp.

Triple Pundit: You’ll find information and articles about sustainability and business. With over 35 writers and guest bloggers, the perspective and scope is wide and varied. Follow them on twitter.

Business in the Community: Located in the UK, this business-led coalition has been around since 1982 and has over 800 members. Good research, publications and case studies. One of my favorite tools is the Jargon Buster. On twitter, they are bitc1.

Sustainability Forum: News, discussions, blogs, job postings - this site has it all. It is managed by

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Fabian Pattberg who also utilizes twitter very well. You can follow him as FabianPattberg.

10 CSR BLOGGERS yOU SHOULD KNOW aBOUT:

David Coethica’s Blog: Based in the UK, David always offers insightful and meaningful blog entries for his readers. I’ve even cross-posted some of his articles I appreciate them so much! Follow David on twitter - http://twitter.com/davidcoethica

Business Musings: Ramesh is from India, but lives and works in China. He is on a sabbatical after many years of corporate life. As part of the process, he has decided to discuss his thinking on business and corporate responsibility via his blog. I enjoy reading an informed perspective from the other side of the globe.

Corporate and Responsible: Lucia Candu writes her blog from New York city, having recently relocated from the Eastern European country of Moldova. She has a wealth of experience in the business, nonprofit and government sectors which is evident as she writes about CSR, sustainability, corporate citizenship and ethical business.

Crane and Matten blog: Andrew Crane and Dirk Matten are professors at the Schulich School of Business (York University located here in Toronto). They manage to offer a blog that’s both accessible and yet solidly academic. You can read this blog with confidence, knowing that the perspectives and insights are well informed.

FabianPatterg.com:Fabian Pattberg’s blog is a companion to his Sustainability Forum site and his twitter activity. His blog rounds out the picture nicely. Follow FabianPattberg on twitter

Mallen Baker: This site is a staple for anyone doing anything with CSR. Mr Baker knows what he’s talking about - and he’s talking about pretty much everything CSR. Follow MallenBaker on twitter.

CSR-Reporting: Want to know how to read a CSR report? Wondering what a CSR report is and what purpose it serves? Do you enjoy good writing about ice cream? Then you have to read Elaine Cohen’s blog (she writes a lot about ice cream - she just likes it a lot). Follow elainecohen on twitter (and notice the icecream on her page!!)

CSR International: Anyone interested in CSR will eventually come across Wayne Visser, a professor of CSR at Cambridge, and the founder of CSR International. He is very active in the field, and offers a unique and candid voice on the topic. Follow waynevisser on twitter

The Business Ethics Blog: Chris MacDonald teaches philosophy at Saint Mary’s University in my hometown of Halifax, Nova Scotia. Recently we got together and hosted a tweetup here in Toronto. His is a well written and insightful blog, rounding out the issues of CSR by looking at things from the perspective of ethics. Follow ethicsblogger on twitter

Evolving Choice: Aaron Fu and Katherine Liew write a very accessible blog on Sustainability and CSR. Having both been educated in Australia, and with Aaron now working in Prague, there is a certain eclectic quality in regional perspective (which I like). Follow AaronQFu and katherineliew on twitter

30 (Plus 1) sites to ComPlete Your Csr favorites list:

Accountability: A global Nonprofit pushing the CSR agenda forward.

Accountability-Central: A fantastic site, easy to use with great information, resources and links.

online resourCes

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Business for Social Responsibility: A consulting company providing good information and perspective on events in the world of CSR.

B Corporation: Limited resources and news information, but a ‘must’ site for any business serious about CSR.

Caux Round Table: Decent resources and a global perspective.

Chlorogy: A new site I’m just making my way around, Chlorogy offers a diverse and extensive perspective on CSR and Sustainability.

Corporate Citizenship Briefing: Good news coverage and analysis. I’ve found some great free research on this site.

Corporate Knights: A Canadian product, they may actually have the world’s largest circulation for a magazine with an explicit focus on corporate responsibility.

CRO, Corporate Responsibility Officer:Decent information, but the site layout isn’t my favorite.

Corporate Social Responsibility Europe: Basically CSR news from Europe.

CSR-NEWS.net: An attractive site with good news coverage, but you have to pay $70 for the research and articles.

Ethical Performance: An okay site, but for the good stuff you need an expensive subscription.

Force for Good: I’ve just started using this site, and I’m enjoying the site’s layout and accessibility.

Forum for Future: A focus on sustainability. Good resources.

Good Magazine: This online version of the magazine is out to do some good. Period. Fun and informative, there’s not a stuffy attitude to be found here.

Goodness500: Want to see how businesses stack

up in the ratings? This site offers an interesting transparency and scoring system.

Global Reporting Initiative: This reporting focused site is a necessary part of anybody’s CSR resource list.

International Business Leaders Forum:A UK site covering Sustainability and business.

International Institute for Sustainable Development: A Canadian site with a focus on Sustainability.

Institute of Business Ethics: Not entirely helpful, and you pretty much have to pay for all the publications. Actually not sure why I am including this one.

Jantzi Research: If you’re in Canada, you’ll want to bookmark this link. If not, then probably not.

Kennedy School of Government, Harvard (The CSR Initiative): A decent selection of working papers and other research. Hey, it’s Harvard.

Project Label: I love this site. If you want to know how a company rates when it comes to CSR, then this site’s for you. You can even make contributions to the rating profile. I spend way too much time here.

Social Innovations Conversations:Don’t want to read your CSR news?

Then this site’s for you. Great topics, excellent guests and good quality.

Small Business Journey: If you’re a small to medium size business interested in CSR, then this site will be a very helpful resource.

Stanford Social Innovation Review: This is the online version of Stanford’s magazine (which is impossible to find in Canada by the way). A decent site with good information for the Nonprofit side of the discussion.

Sustainability: This global consultancy/think-tank offers decent research for free.

The Center for Corporate Sustainability: All about Sustainability and environmental issues. I like the link list, but I can’t figure why it’s not hyper-linked to the actual sites.

Transparency International: These whistle blowers are all about putting the spotlight on corrupt corporations and business practices around the world. They’ll point you in the right direction for news and articles related to corporate transparency (or the lack of it).

World Business Council for Sustainable Development: A bit boring layout, but good links and information.

UN Global Compact: This site needs to be in your bookmark list. Why? It’s the United Nations for pete’s sake!

online resourCes

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in Print

title: The Price of Civilization

author: Prof. Jeff D. Sachs

Publisher: Random House

isbn: 978-1-4000-6841-8

In structure, the book is a bit like a medical treatise: the symptoms are identified, their causes diagnosed, the cure prescribed. It is

also a very American book.

This is not just because it is exclusively about the United States – with the existence of a few European countries acknowledged occasionally as reference points; it is suffused with classic American optimism.

The “American people” are good, but policy has been captured by the “interests”. Dethrone the interests and the goodness of the people will assert itself. American conservatives and radicals both sing to this hymn sheet, differing only about the source of the evil: for the Tea Party it is “big government”, for Democrats such as Sachs it is big business. Both find difficulty in explaining why the good people are so often duped by one or the other.

PRAISE FOR THE PRICE OF CIVILIZATION

“Mr Sachs’s analysis can be doctrinaire and one-dimensional, but it is almost always grounded in solid economics. (...) Mr Sachs’s political analysis is less persuasive than his economics. Americans may tell pollsters they want the rich to pay more tax, but they would also prefer the government to cut spending rather than raise taxes. He vastly overstates the similarities between the Democratic and Republican Parties.” - The Economist

“Sachs manages to paint an alarming picture of the US, while leaving the reader with a sense that its problems are eminently fixable. A second achievement is the sheer sweep of his analysis, which flouts the boundaries of economics to encompass politics, psychology and moral philosophy. The gain in perspective mostly outweighs the loss in authorial authority. (...) Sachs’s enthusiasm for planning is not without its problems. He neglects the cynicism bred by

nebulous or missed goals. There is a disquieting scorn for politicians.” - Martin Sandbu, Financial Times

“He is a fine economist and statistician, and if you want to stockpile facts and arguments for radical advocacy, this is the book for you. I had hoped, though, for something more arresting than a millennium manifesto for the Democratic party. It is also a very American book.” - Robert Skidelsky, The Guardian

“Jeffrey Sachs’s new book is a landmark in this great and essentially American tradition, setting out with luminous clarity the narrative and the analysis of how the US and the wider world has been traduced and seduced by debased ideology, racist reflexes and huge vested interests from its liberal and enlightened roots. (...) Sachs goes further still. He restores our faith in mankind, particularly American mankind” - Peter Jay, The Spectator

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executive educationNonprofit and NGO Executive Education Programs

The demands on nonprofit leaders are greater than ever. The challenges of our times are complex, interrelated, and urgent, requiring new thinking as well as nontraditional alliances.

Harvard Kennedy School Executive Education offers a wide array of nonprofit/NGO programs that give leaders the skills and analytical frameworks necessary to lead results-driven organizations. Participants are able to apply concepts, techniques, and faculty feedback to their work as they progress through the programs, allowing immediate impact at their organizations.

upcoming Programs

Performance measurement for effective management of nonprofit organizations May 29, 2012 - June 1, 2012 OR May 21, 2013 - May 24, 2013Faculty co-Chairs: Allen Grossman, Julie Wilson

A joint program presented by the HBS Social Enterprise Initiative and Harvard University’s Hauser Center for Nonprofit Organizations, this course teaches nonprofit leaders how to use performance measurement to enhance their organization’s ability to deliver on its mission.

This course explores the impact of measurement and examines a range of effective approaches to help guide organizations in any economy.

expanding impact: non-Governmental organization legitimacy, advocacy and Partnerships September 10, 2012 - November 16, 2012ONLINE

In a world of highly constrained resources, the ability of a NGO to optimize its impact on society requires both clarity of purpose and flexibility. This program offers NGO leaders the opportunity to sharpen their visions and think strategically about how to enhance the reach of their programs in a sustainable manner.

nonprofit financial stewardship: Concepts and techniques for strategic management October 15, 2012 - December 7, 2012Faculty Chair: James HonanONLINE

This online program, designed to help managers in nonprofit organizations understand the tools, techniques, and concepts of good financial management, represents a

unique online learning opportunity for nonprofit and NGO managers to interact with colleagues from around the world and Professors James P. Honan and Ann Thornburg.

Governance as leadership: reframing the Work of nonprofit boards January 14, 2013 - March 8, 2013Faculty Chair: Bill RyanONLINE

The board of a nonprofit organization can be among its greatest assets. This online program is designed to help executives of nonprofit and non-governmental organizations engage their boards in more consequential and meaningful work that produces greater value for their organizations.

46

in Print

title: Subsidizing Sustainable Development:

The Nigerian Case Study

Publisher: ThistlePraxis Consulting Limited

In the wake of the recent events in the oil industry in Nigeria, questions have been asked concerning the sustainability of the

subsidy on petroleum products. With the partial removal of the subsidy on petrol, otherwise known as Premium Motor Spirit (PMS), it is only a matter of time before Nigeria embraces a full de-regulation of the oil industry.

Having established this fact, it has become imperative to take a critical look at the Nigerian economy, with a view to determining the advantages and disadvantages of the policy, and the long and short-term effects that it will have on corporations and private businesses. There is a need to ascertain the effects that the policy may have on the practice of Corporate Social Responsibility, which is dependent on the fortunes of these organizations.

There is also a need to determine whether a removal of fuel subsidy is indeed a positive step towards achieving sustainable development, as well as meeting international standards in the provision of healthcare, infrastructure, education and other vital areas. With the 2015 deadline for the Millennium Development Goals fast approaching, Nigeria requires a huge boost to ensure that the goals are met.

The report titled “Subsidizing Sustainable Development: The Nigerian case study” provides a background on the current state of the Nigerian Petroleum Subsidy Policy, tracing the history of the introduction of subsidies on fossil fuels in Nigeria and providing an analysis of subsidy removals in other countries in order to draw comparisons and taking lessons to proffer sustainable solutions to the current economic challenge.

In addition, this report takes a critical look at the current intervention strategy by the Federal

Government - Subsidy Re-investment and Empowerment Programme (SURE-P) Blueprint - and discusses the implications for Sustainable Development, Human Development and its relationship with the attainment of the United Nation’s Millennium Development Goals.

A survey was carried out to determine the views of Chief Executives, Corporate Social Responsibility Experts, employees, Small business owners, and informal sector workers as to the effects that the subsidy removal may have on their businesses.

Finally, the report looks at the implications of the subsidy removal on the practice of Corporate Social Responsibility in Nigeria and concludes that CSR should not be compromised as a result of the need to cut costs, but rather should be enhanced to meet the needs of members of host communities who have been affected by the short-term effects of the subsidy removal.

47

oPinion

and the uses are not complementary. Conflicts over water access and use may also come about from the uneven distribution of available water between uses and users. Chinese firms use water in Africa for many uses including farming, normal daily use for drinking, and in other mechanical and iron manufacturing plants. It is imperative that it works hand in hand with other stakeholders such as the United Nations and the Ministry of Agriculture both in China and African countries in which they operate.

Evidently, not all the responses to Chinese investment in Africa have been portrayed in good light. Some are more evident with issues like environmental pollution and less evident ones in the area of human resources. In the treatment of workers in the mining industry, civil liberty organisations – as well as less corrupt States – are beginning to question the sometimes undesirable consequences of Chinese commercial concerns in Africa, and these have been followed up by the Western media, academic studies and popular debate forums in journals and articles. The questions and criticisms mainly concern the impact of Chinese companies’ competitiveness on African commercial concerns and in many cases killing local small to medium scale enterprises in similar trade, and some CSR issues with Chinese firms, demonstrated as follows: impacts on indigenous economies; concern that Chinese manufactured goods, and traders are putting small and, in most cases, poor and sustenance workers out of work and business; damaging the effectiveness of relatively large domestic producers and retailers and a perception that local enterprises are disadvantaged in relation to (direct and indirect) subsidies that Chinese industries are awarded from backers and often Chinese government entities which are available to corporate citizens through the Sovereign Wealth Fund. There is also the added outcry that Chinese businesses are not paying the required focus and channelling enough resources to health and safety standards, workers rights, and environmental standards, and that their operations are therefore having an adverse impact on local communities and ecosystems. Impact on local employment: Concern that projects

are heavily dependent on expatriate Chinese workers, and therefore do not create much local employment or build local production and management talent. This needs to be resolved in order for there to continuously be the harmony that has taken years to build and for there to be an improved mutual beneficial relationship and respect. It is however believed that a foreign policy that enshrines Corporate Social Responsibility and Stakeholder Management in its framework has to do so from within its internal environment first.

CONCLUSION

Some believe it is fair to say that because most of the trade between China and the African continent is seen as an aid, the bottom line of these projects needs to be viewed as stringent and profitable in order to ensure a prolonged mutually beneficial relationship. But the truth is, with the current environment embedding CSR activities within any sort of project can no longer be seen as a less cost effective way of carrying out projects, but rather a mutually beneficial aspect of projects which help all those involved. As some of the fallen world leaders have come to learn, dominating western society on the basis of economic prowess is not a sustainable feat, hence China should not look to Africa solely as an economically, but as a way of promoting a new and better way of engaging in a countries sustainable development, and in return China will be held up as a shining example in a new world order. On this note, African leaders should learn to demand more on behalf of their countries sustainability and environment for giving China the chance to create a

more sustainable leadership prowess.Although the Chinese Government and its corporate citizens have the best intention for Africa and its people, in addition to making a profit, benefitting its people and increasing its Sovereign Wealth Fund in years to come, it needs to create a more structured ‘rules of engagement’ in the countries in which it operates and also a sustainable Corporate Social Responsibility Framework that is relevant to all parties. It is common knowledge that the Africans who are used to delays in public and private enterprises are grateful to the Chinese Government and its companies for delivering their promises within agreed timelines. As seen from the main body of this paper, the Chinese bring in technical expertise to develop various areas of the African economy in agreement with the Heads of States. Areas that would otherwise have lacked funding are turned into profitable centres where jobs are created and can become a reference point around the world. The agreement sometimes is to provide social amenities according to the needs of the local community. These they provide with no qualms at all. Healthcare facilities are built with rapid speed, , construction of roads and railways amongst other things which the citizens are grateful for. There is no contest that China’s dilution of the gift of amenities and social infrastructure and investment in the continent will improve the lives of millions of Africans. It is clear that the Chinese still have a lot to accomplish in the area of Corporate Social Responsibility and Stakeholder Management in Africa. The area that requires serious attention is the way and manner the Chinese Government and its corporations deal with corrupt governments. There is a public outcry for this to stop. There is also the sincere clamour for the Chinese to employ more local talent especially in the mining and other knowledge intensive industries. In the foreseeable future, it seems this might be a thing of the past, as local citizens who are currently being trained and monitored by Chinese experts will be in a position to run operations themselves.

Dimeji Belo, Ivor Hopkins, Olawole Shojibi run CESC Consulting Limited.

...continued from page 33

...dominating western society on the basis of economic prowess is not a sustainable feat, hence China should not look to Africa solely as an economically, but as a way of promoting a new and better way of engaging in a countries sustainable development

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9 questions

1WHAT DOES SUSTAINABILITY MEAN TO YOU AS A YOUNG GLOBAL LEADER?

It means the ability to create solutions and make a bigger impact on a global scale. The world is a global village, and issues affecting countries aren’t really different, and this means that we can create solutions to meet the needs of our countries, collectively. Our goal as global leaders is to create a better future economically, socially and environmentally for the benefit of the next generation.

This translates to a future that guarantees the better use and management of our natural resources; improved human welfare and a healthy and prosperous environment. Our organizations are the platforms to impact change. In my case, as the executive director of FATE Foundation, and as part of my mandate as a young global leader, sustainability means to assist Nigerians live with dignity, earn an income by equipping them with entrepreneurial and business knowledge and skills and reducing unemployment.

2HOW WOULD YOU ASSESS THE STATE OF CORPORATE SOCIAL RESPONSIBILITY

IN AFRICA IN RELATION TO CORPORATE PHILANTHROPY?Lately, there has been a huge awakening in the Private and Public sector in considering CSR to be the strategic solution for socio-environmental challenges in Africa. CSR is gradually been understood by Corporate organizations as the mechanism to contribute to sustainable development and nation building. More corporate organizations are setting up departments dedicated to CSR, or even establishing foundations to give back to society.

These companies have come to realize the importance of community development, especially the host communities whether urban or rural. Many organizations, who understand the essence of CSR, have been able to identify it as a tool to address the various socio-economic problems in Nigeria. One of the ways they have gained mileage through CSR is the focus on personal development in areas of education and business skill development. This has enabled them to pool and harness talent and resources within communities and

also to equip indigenes adequately in various skills sets.

In turn, the activities of communities cause a ripple effect which ensures bigger impact and lasting results. However, corporate philanthropy is still practiced; whereby some corporate organizations invest their CSR towards laudable efforts, but in these cases they do not get involved and monitor their impact. What it may achieve for the company are PR gains or bottomline benefits and not the true gains of community relations and development.

However, corporate philanthropy is still practiced; whereby some corporate organizations invest their CSR towards laudable efforts, but in these cases they do not get involved and monitor their impact. What it may achieve for the company are PR gains or bottomline benefits and not the true gains of community relations and development

Osayi is the Executive Director of FATE Foundation, a leading private-sector led, non-profit intervention initiative on Entrepreneurship in Nigeria. In 2010, she was recognized by the World Economic Forum as a Young Global Leader. The Co-Country Chair of Global Dignity now takes 9 Questions.

osayi alile oruene on corporate philanthropy, smes and sustainable development

49

3IN OVER A DECADE, HOW WOULD YOU ASSESS THE IMPACT OF FATE

FOUNDATION’S INTERVENTIONS IN NIGERIAN SOCIO-ECONOMIC SPACE?

FATE foundation was borne out of a deep passion that seeks to advance the human welfare by tackling the global issue of poverty and unemployment which are predominant in Nigeria and Africa. After observing the menace of unemployment faced by young and talented Nigerians and unharnessed potential in human capacity and enterprise development, FATE foundation adopts a culture of entrepreneurship as a strategic approach in tackling these issues.

This philosophy is hinged on helping the Nigerian youth dream big by fostering creativity and encouraging development of talents to the and wealth creation in the process.With a dynamic curriculum that supports innovation, social change, human capital and community development using an innovative mix of training, mentoring, and business support, in the last 11years, FATE has produced thousands of world-class entrepreneurs that stand as

brand ambassadors driven by their commitment to support the vision. FATE has also in the last 11years made immense social impact. Annually, FATE mentors and trains over 200 enterprise-savvy Nigerians through its Aspiring Entrepreneurs Programme and Emerging Entrepreneurs Programme and trains an average of 2,500 business owners and enterprising individuals annually through short Entrepreneurial workshops at affordable rates. Our impact ratio stands at a FATE Alumnus creating employment for seven other Nigerians at the moment.

We also are involved in community projects that take us around the country to train youths in business skills through various partnerships with impressive outcomes.

4WHAT ROLE CAN YOUNG ENTREPRENEURS PLAY IN ENHANCING SUSTAINABLE

DEVELOPMENT IN NIGERIA?

Young entrepreneurs can act as catalysts for sustainable economic growth by promoting the idea of sustainable enterprises. An enterprise’s good reputation, along with sound business management, eco-friendly

practices, facilitates sustainable results. Responsible business practices also provide another benefit, the possibility of attracting fresh capital and securing less expensive credit.

This cannot be done alone by young entrepreneurs without the cooperation of government and other interested parties to create a sustainable environment where businesses can thrive. Many benefits are possible through collaborations, but it is important to point out that young entrepreneurs cannot foster Sustainable Development all by themselves.

5IMPACT INVESTING IN SMES AND THE AGRICULTURE SECTOR CAN HELP

FAST TRACK SUSTAINABLE DEVELOPMENT IN NIGERIA. WHAT ROLE IS OR WILL FATE FOUNDATION PLAY IN FOSTERING THIS TREND?

SMEs undoubtedly are engines of job creation and potential key drivers in the Nigeria economy. Nigeria is an emerging economy with huge opportunity for small and medium size enterprises to serve as the enabler or driver of growth as experienced in other successful economies in the world. Also, Agriculture as the backbone of the economy plays a pivotal role in Sustainable Development in Nigeria and has remained the fastest growing sector in the non-oil sector contributing about 42% of the Nigerian GDP.

However, it is interesting to note - as captured in a recent publication - that farmers in Nigeria have the lowest farm productivity in sub-Saharan

9 questions

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9 questions

Africa. This outcome in its self creates a huge investment opportunity or gap between production and marketing and distribution which I believe is one way of attracting young people into the business of Agriculture.

I believe Nigeria’s future prosperity is dependent on a skilled and educated enterprise workforce that does not currently exist in the required scale. FATE foundation’s strategic role as an enterprise support institution seeks to provide that necessary industry-based capacity building and enterprise support mechanism for aspiring entrepreneurs seeking to harness their business potentials not only in the agric sector but in all other sectors.

6WHAT SHOULD STAKEHOLDERS EXPECT FROM FATE FOUNDATION IN

FUTURE?

We are unwavering in our pursuit to fostering wealth creation by promoting business and entrepreneurial development among Nigerians. Our driving principle is the effectiveness of wealth creation in tackling poverty. FATE’s philosophy is that by equipping enterprising Nigerians with skills, tools, networks, these individuals can create successful businesses that will in turn offer gainful employment to the teeming masses of the unemployed in Nigeria. We are committed to

raising world class entrepreneurs that will positively influence the socio-economic landscape in Nigeria.

7WHO SHOULD CONTROL THE ECONOMY SO THAT BUSINESS ENTERPRISES

SERVE NATIONAL INTEREST AND DON’T JUST SERVICE THE INTERESTS OF A FEW?

The Government is expected to play a key role in promoting the economic, social and environmental conditions that favour more inclusive and sustainable development. There has got to be a stable political government across board because that’s the enabling environment. It is not about wealth redistribution but wealth creation. What we need to see is a bottom-up approach, a situation where there is investment in Education and Skills.

8IN YOUR OPINION SHOULD CSR PRACTICE BE ENFORCED AND REGULATED

BY GOVERNMENT, OR SHOULD ORGANIZATIONS BE GIVEN THE FREEDOM TO VOLUNTARILY PARTICIPATE AND TO CHOOSE THEIR OWN UNIQUE APPROACH TO CSR INTERVENTIONS?

Although CSR can be viewed as a voluntary action that organizations take above and beyond regulatory requirements to improve their socio-environmental and economic performance, I believe government at different levels can regulate the behavior and practice of businesses by defining minimum standards of good CSR practice or performance requirements embedded with the required legal framework. There is a significant opportunity for government to harness the current enthusiasm for CSR practice among enterprises and assist organizations in taking on a bigger role in social development particularly under the global demand for responsible business practice.

The government can assume a key role in the promotion of CSR, for example, by establishing good governance standards, promoting transparency and eliminating corruption. This promotion does not imply managing CSR initiatives or making them

mandatory; rather it seeks to foster an environment conducive to sustainable development and responsible behavior on the part of business enterprises. The government is thus in a position to determine if any legal requirement is needed to ensure compliance with these minimum social and environmental standards.

9WHAT IS THE SUSTAINABILITY ELEMENT IN YOUR MODEL AND WHAT

INNOVATION WILL MAP YOUR ORGANIZATION’S FUTURE?

Innovation and entrepreneurship are emerging opportune areas for Africa because they are associated with social and technological progress. Thus, in a committed drive to harness the innovative enterprise culture for economic impact in Nigeria and as a model for Africa, we recently established the FATE institute for venture design in partnership with the Stanford University, Centre for Design and Research with an innovative approach to design team-based ventures that accelerate the creation and commercialization of technology to meet market needs, thereby leading to job creation and to nucleate a dynamic human-centered ecosystem of innovation in a given region.

FATE foundation is committed to the fundamental principle of technical assistance not only by transferring skills and experience, but by transferring ownership. And the starting point of this technical assistance is to support and assist SMEs re-programme and enhance appreciation of the relevance and opportunities that would help young talented people harness in creative ways the wealth of experiences and opportunities evident in their in their community.

We are poised to enhance access of SMEs to markets, finance and technical know-how, promote business linkages and partnerships which are important to catalyze economic expansion at local and regional levels. We believe fostering linkages and other forms of partnerships between small and large businesses helps to foster growth of the SME sector.

There is a significant opportunity for government to harness the current enthusiasm for CSR practice among enterprises and assist organizations in taking on a bigger role in social development particularly under the global demand for responsible business practice. The government can assume a key role in the promotion of CSR, for example, by establishing good governance standards, promoting transparency and eliminating corruption.

CSRFiles Edition 4

Documents

Transcript of CSRFiles Edition 4