It’s a bad idea, as part of your CSR strategy, to pose with a big cheque to show that you are ‘doing good’, says Chris Bischoff, research and sustainability specialist at Reputation Matters. We interviewed Bischoff to get his take on authenticity and transparency in the CSI space, the benefits of aligning your CSR strategy with your brand, and how businesses can retain their reputation capital during the current economic recession in South Africa.
Now and into the future, consumers have growing expectations from the businesses they patronise in terms of CSR. Why do you think this trend has developed and do you believe it’s here to stay?
The trend of ‘green consumerism’ is here to stay. As the human population increases, so do consumption rates which, in turn, puts increasing pressure on natural resources and availability of land. This is going to put increased pressure on businesses to produce a product that does not add to the burden of overly stressed resources, but rather offers a renewable option. This is a growing consumer expectation that will continue as long as we are faced with these unsustainable production and consumption issues. How socially and environmentally responsible an organisation is in terms of its CSR strategy will influence consumer attitude towards the brand.
Bischoff: An interesting trend that our research has frequently shown is that CSR is at the top of the list when we ask stakeholder groups about communication preferences. People want to hear about what you are doing to be socially and environmentally responsible. It is also about the message behind your CSR strategy and CSI initiatives. We always say that it is a bad idea to pose with a big cheque showing that you are ‘doing good’ by donating money. There is not much of a message behind this and feels rather much like a marketing attempt. The best CSR strategy is one that is aligned to the business’s values and vision, which is ongoing and involves your stakeholders in some way.
Transparency is incredibly important when it comes to sustainability and a company’s environmental performance. Information spreads so rapidly on social media nowadays. It is also really important to be transparent even when there has been a lack of environmental performance. It is better to say ‘this is where we under-performed, and this is what we are going to do about it’ instead of saying nothing at all. A lot of businesses nowadays are getting called out for not ‘walking their environmental talk’. This is known as ‘greenwashing’ – when certain business decisions and actions do not reflect what your CSR strategy says.
Bischoff: We are going to be getting our hands dirty in a community organic vegetable garden. As mentioned, this year we have started gifting trees to be planted in honour of a client or employee on their birthday. I want us to get involved in planting and in this way get a better idea of the reason why we gift trees. The intention is also for the team to interact with community members to get a better idea of the positive impact that gardens and urban greening has in society, especially under-resourced communities.
The message for Mandela Day is that everyone has the ability and responsibility to change the world for the better; no matter how small of a contribution it is, let it be a positive one. It is also a good message to make businesses, which are also a part of society, realise that they are in a position to make a significant contribution towards positive change that addresses social and environmental issues, not just on Mandela Day.
The World Bank Group has inaugurated a multimillion climate innovation centre to support Ghana’s growth strategy to help more than 100 local clean technology businesses develop and commercialise innovative solutions to mitigate effects of climate.
The launch of the first technology hub in the country on Tuesday came barely four months after the World Bank approved a financial package of $17.2 million to fund the Ghana Climate Innovation Centre located at Ashesi University College in Berekusu in the Eastern region.
The centre will support the country’s climate change policy to help over 300,000 Ghanaians increase resilience to climate change in the next 10 years.
It is also expected to support local clean technology ventures to mitigate 660,000 tonnes of carbon dioxide, equivalent to the emissions of almost 140,000 cars in a year, World Bank said, and it will contribute to the production of over 260 million kWh of clean energy in the West African country.
Environmental scientists warn that if global temperatures rise by more than two degrees Celsius above pre-industrial levels, the consequences will be severe and, in some cases, irreversible and projected glaciers will continue to shrink, heat waves will be more frequent and the oceans will get warmer and more acidic.
UN special envoy on climate change and former Ghanaian president, John Kufuor, said at the launch that emerging countries like Ghana would be unable to mitigate climate change effects unless they joined global forces.
“I believe global action is crucial to fight the impact of climate change, I believe science and technology should be deployed at every stage, the effort must be global, this is what the world must be awakened to,” he said.
“If we are seeking green solutions to fight the impact, which is global, I believe public policy, donor community support, as well as private ventures should share the risk of investment to transition from fossil fuels to green energy.”
Kufuor urged donors to fulfil their pledges in terms of financial commitments and developed nations to extend technology to back developing countries in Africa’s fight against climate change.
“Africans cannot deal with the problem without global partnership,” he stressed, “we need the global community, the promises and pledges have been there for some time, unfortunately the pledgers have not fulfilled their pledges in terms of financial support, in terms of technological extension.
“No country is an island now, unless the world moves together to do something by 2020 or 2030 to put temperatures under two degrees Celsius, it will be like all of us being on the same boat, we either sail together or we sink together.”
Henry Kerali, World Bank country director for Ghana said, in a speech read on his behalf: “The Ghana CIC solidifies the role of the private sector in helping Ghana manage the effects of climate change.
“By enabling entrepreneurs and green innovators to test and scale new clean technologies, home grown business solutions can help the country build climate resilience, while also contributing to job creation and economic development.”
According to the World Bank report, Economics of Adaptation to Climate Change, without a proper green growth strategy, Ghana’s agricultural gross domestic product is projected to decline by 3 per cent to eight per cent by the middle of the century.
Coastal erosion from rising sea levels could result in significant loss of land and forced migration, while extreme weather events could further strain the country’s infrastructure.
To reduce the long-term cost of climate change and create opportunities for sustainable growth, the bank said the GCIC will provide local companies with the knowledge and resources they need to develop prototypes and market innovative clean technologies in sectors like climate-smart agriculture, waste water treatment, and off-grid renewable energy.
The services offered by the centre will include sea financing, policy interventions, and market connections, as well as technical and business training.
Similar centres have been established in the Caribbean, Ethiopia, Kenya, Morroco, South Africa and Vietnam.
LOCAL MINING companies’ operations may be suspended if they fail to meet the April 30 deadline to secure an International Organization for Standardization (ISO) 14001 environmental management certification, the head of the Mines and Geosciences Bureau (MGB) said on Monday.
“There will be no exemption unless the deadline is extended on meritorious ground to be evaluated by the MGB and EMB (Environmental Management Bureau), like when due to force majeure,” Leo J. Jasareno, director of MGB, told reporters.
Last April 30, 2015, the Department of Environment and Natural Resources issued Administrative Order (AO) No. 2015-07, requiring all metallic mining companies to secure an ISO 14001 environmental management certification within one year from the date of the order. The order covers all holders of valid and existing mineral agreement or financial or technical assistance agreement.
“The extractive nature of mining necessitates a greater degree or standards to ensure that any adverse impact on the environment is properly remediated in accordance to the norms of responsible mining… The requirement for mining contractors to undergo ISO certification will help achieve sustainable growth by the development of an effective environmental management system,” the order read.
Mr. Jasareno said the Philippines is the lone country that mandates mining firms to be ISO-certified. In other countries, companies voluntarily apply for such certification.
Of the 40 mining companies, only Apex Mining Company has requested an extension through a letter sent to the MGB last January.
The MGB chief said most companies are currently undergoing the process of securing an ISO 14001 environmental management certification, which usually takes at least a year.
Under the AO, the MGB can suspend a mining company’s environmental compliance certificate (ECC) and can withhold the issuance of ore transport and/or mineral export permit, if the miner fails to comply with or maintain the ISO 14001 certification.
Michael Drake P. Matias, officer-in-charge/chief of the Environmental Impact Assessment and Management Division, said without an ECC, a company cannot conduct exploration activities.
Ore transport or mineral export permits, which are validated by the MGB, allow a firm to transport and export its mineral ores.
Three companies, namely SR Metals, Inc., OceanaGold (Philippines) Inc., and Philex Mining Corp., have already received ISO 14001 certification, prior to the issuance of the AO last year.
Mr. Jasareno said GreenStone Resources Corp. has also recently received its ISO 14001 certification.
South Africa can score quick wins with the right focus, Goldman Sachs sub-Saharan Africa investment banking head Colin Coleman said on Wednesday.
Speaking at a presentation at the Gordon Institute of Business Science (GIBS) attended by Creamer Media’s Mining Weekly Online, Coleman put the stabilisation of South African mining at the top of a list of eight priorities for this country, which the world-leading investment bank found had an extremely sound financial sector and low hard-currency external debt but red-flashing 24%-to-34% unemployment lights.
Key conclusions from stress tests the bank applied in a comprehensive data-backed study found that South Africa had a well-governed corporate sector with resilient earnings and a free-floating exchange rate that acted as a shock absorber.
But to raise economic growth, each of this country’s social partners would have to play its role, with government creating a conducive environment for business, business raising capital investment to drive domestic growth and jobs, and labour creating a stable environment for industrial relations.
The bank proposed a national youth service initiative big enough to engage 300 000 over five years and advocated a ‘Team South Africa’ approach to the rebuilding of investor confidence.
The comprehensive Goldman Sachs study found that although South Africa’s wealthiest had grown stronger in the last 20 years of democracy, the country’s poor had become less poor.
Of the 54-million South Africans, there were now 41-million “with something to lose” as a result of the income effect.
But the country needed to arrest the decline of mining to benefit from its multiplier effect and mining’s contribution to exports.
Although South Africa’s resilience to financial shock should give the confidence to private and public sector fixed investors and calm fears of an impending crisis, the country could not afford to be complacent.
“We need to get bolder,” said Coleman, a member of a South African family with strong anti-apartheid struggle credentials, who observed that local business was readying itself to be more vigorous in its engagement with government.
The overall findings of the illustrious bank were that public policymakers and private sector participants needed to act with urgency to increase the pace and effectiveness of reforms to modernise the economy and address the weaknesses of unemployment, twin deficits and slow economic growth.
Strong economic management, leadership and policy coordination would put South Africa on a sustainable growth path.
Recommended was the establishment of an economic council to drive growth because without urgent action, South Africa ran the risk of being caught in a low-growth trap, amid rising domestic social pressures and an approaching storm of global headwinds.
Contributing 19 percent to its GDP, mining is essential to the economic prospects of South Africa. Chris Griffith, CEO of Anglo American Platinum, tells World Finance how platinum can be extracted in a sustainable way.
Although mining is the backbone of South Africa’s economy, its success is not without consequence; and only by considering environmental and social wellbeing alongside financial performance can leading companies pave the way for sustainable growth. As the country’s mining industry enters into the modern age, it is essential that companies work responsibly and, in doing so, benefit all corners of society.
Looking to the example set by Anglo American Platinum, it’s clear that key industry names can bring a greater measure of sustainable prosperity by focusing on matters aside from profit-making potential. We spoke to Chris Griffith, CEO of Anglo American Platinum about the country’s mining industry and the importance of corporate social responsibility in shepherding it on to greater things.
What’s the current economic environment like in South Africa, and how is this affecting the mining industry?
The South African economy is diverse with a number of activities contributing to the economy. However, mining is still a significant contributor to the South African GDP. Here at Amplats, we develop socio-economic programmes such as agricultural programmes and contribute significantly to South African education and health by building schools, clinics, roads etc. We see ourselves as an integral part of the society.
We are also encouraged by the manner in which stakeholders such as unions, employees, the government, businesses, investors and NGOs collectively agree that we have to work together to develop sustainable solutions in the mining industry. Labour unrest affects all sectors of the economy especially small businesses within mining towns. We have seen how a labour strike in one sector can negatively affect other sectors that are stable.
[M]ining is still a significant contributor to the South African GDP
Environmental, social and governance risks are fundamental to our business, we see financial risk as an integral part of the business, the same way we see environmental, social and governance risks, and we continue to identify risks in all areas of our business to ensure a holistic approach to business sustainability. We are encouraged that the South African economy is steadily improving.
How has that affected Anglo American Platinum and how has the company adapted to it?
Despite the challenging environment of the industrial action, the effect of business improvement initiatives is evident across all our operations. Our revised marketing strategy aimed at improving margins and increasing future demand for platinum group metals (PGMs) continues to have a positive impact. We prioritised all existing asset-optimisation, supply chain programmes and initiatives identified in the 2012 Platinum Review. We continue with our value-driven strategy, cost-reduction programmes and improving operating efficiencies.
Our focus remains on the restructuring and repositioning of our portfolio. We have the high quality assets to enable us to do this, and a new capital optimisation programme to ensure we allocate our scarce capital to the highest potential assets and projects.
What mechanisms does Anglo American Platinum have in place with regard to the environment?
We aim to create and extract maximum value from our full basket of metals in a safe, profitable, competitive and sustainable way, for the benefit of all stakeholders. We do this responsibly by ensuring that resources such as water and energy are optimised and saved. For example, our total new-water consumption decreased from 33.4 million metres cubed in 2013 to 27.1 million metres cubed in 2014. We have total basal energy expenditure of 61.3 percent against a 2013 target of 58 percent. Our safety has improved too. We believe that zero harm is achievable.
What has the company done to ensure it is socially responsible towards South Africa?
Social deficit is a fundamental issue not only for Anglo American Platinum, but for all sectors of society and governments in the developing nations, and South Africa is far from unique. Moreover, South Africa is still repairing wounds suffered as a result of apartheid, and most of our host communities still lack fundamentals such as schools, roads, health facilities, transport infrastructure and so on. Mining is seen as a source of employment and income, and the local economy still needs to be uplifted to improve access to facilities and other opportunities.
Mining contributes significantly to the GDP of South Africa and other countries where we operate. In figures, mining creates 1.35 million jobs, accounts for about 19 percent of GDP and is a critical earner of foreign exchange – typically greater than 50 percent. The industry also accounts for 20 percent of private investment, 12 percent of total investment, attracts significant foreign savings of around ZAR 1.4trn ($121.4bn), has approximately ZAR 440bn ($38.1bn) in annual expenditure, spends ZAR 93.6bn ($8.1bn) on wages, ZAR 4bn ($346.9m) on skills development and ZAR 2bn ($173m) on community investment.
In 2014, Anglo American Platinum trained 49,763 employees, with 4.9 percent of total payroll spent on training and development. With regard to sustainability indicators; in healthcare 16,875 community members received primary healthcare by company funded mobile clinics. In education 79.4 percent of the company bursary fund for communities was awarded; and there was the completion and handover of a ZAR 40m ($3.47m) school for the local community in Bizana. We also invested in skills training, with 1,320 employees, community members and contractors benefitting from adult basic education and training programmes.
We believe our social contribution is notable and significant. However, our host communities and citizens require more and there is still a lot to be done, which is why, as a company, we have developed Alchemy. Alchemy – Anglo American Platinum’s ZAR 3.5bn ($303.8m) social development framework model for shared ownership – is a community based empowerment scheme. The sole aim of Alchemy is simply to develop and empower our host communities beyond the life of mine. We believe that this is the right thing to do and that overtime, communities will benefit immensely from this strategic initiative.
Anglo American Platinum was recognised as Best Performer in 2013 and 2014 by the Johannesburg Stock Exchange’s Socially Responsible Investment Index.
What main governance structures and processes has the company put in place and what impact are they having?
The board regards governance as fundamental to the success of the company’s business and is committed to principles of good governance in directing and managing the company to achieve its strategic objectives. The board conducts its business in accordance with the principle of King III, which includes the exercise of independent discipline, responsibility and transparency, and also the accountability of directors to all stakeholders setting out its role and responsibilities.
Through proactive stakeholder engagement, not only do we integrate media views but, specifically, engage minority shareholders because we believe that they provide useful and important views and strategies to ensure that the business remains sustainable.
Stakeholders are engaged in groupings and on an individual basis. That is why we have developed an ESG communication strategy that will ensure that every stakeholder’s view is taken into consideration and addressed.
In short, structures such as a Safety and Sustainable Development Committee, Social Ethics and Transformation Committee, Audit and Risk Committee, Executive Committee and a Business Integrity Committee ensure that the whole system operates within local and international good governance frameworks.
What are Anglo American Platinum’s key policies with regard to sustainable development more generally?
Sustainability is not an isolated phenomenon but an integral part of the business. Everything we do is done through lenses of sustainability, and our policies are reviewed and tested against best international sustainability practices and standards. The anti-competitive policy is a practical example: our reputation as a business may be negatively affected if we do not identify employees and contractors who are exposed to antitrust risk, and ensure that they all receive appropriate training. As a company we subscribe to the principles of International Council on Mining and Metals, which means that we must mine responsibly. We ensure minimal environmental impact and eliminate other factors such as noise and dust.
What challenges do the company and wider industry face?
As the company develops so too do social needs. Land and housing is a challenge, and the two represent a high risk to employee health and safety. As a company, we build houses and ensure employees have a living-out allowance when choosing to live outside of identified accommodation. Some of the challenges have come as a result of undeveloped infrastructure, such as public roads, and while this is not entirely within our control, we see this as a challenge because our employees are exposed to unsafe roads. In response to these challenges we partner with local, provincial and national government in initiatives focused on improving infrastructure. We build roads, provide safe transport and provide accommodation.
What is Anglo American Platinum’s overall vision for the future in terms of the wider platinum industry?
Our vision is to be a global leader in PGMs, from resource to market, as we work towards a better future for all.
Source: World Finance
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The South African Breweries (SAB) in partnership with the World Wildlife Fund for Nature of South Africa (WWF-SA) has launched Better Barley Better Beer, a programme that encourages and supports sustainable farming practices amongst South Africa’s barley farmers, focusing on water reduction, improved carbon footprints, soil health and clearing of alien vegetation, as well as the protection and restoration of ecosystems.
Better Barley Better Beer is in its pilot phase in the dryland area of the Southern Cape and in the irrigated barley areas in the Northern Cape, and will run for approximately two years.
The programme involves a total of 26 barley producers – 15 in the dryland area and 11 in irrigation, who have either voluntarily opted to participate or hold important conservation assets on their properties. These assets include endangered veld, important water catchment areas and critical species.
Through structured engagement and advisory support, Better Barley Better Beer is aimed at empowering barley farmers to understand and implement sustainable farming practices. The programme is an important element of SAB’s global sustainable development framework called Prosper.
Prosper highlights tangible targets to be achieved by SAB over the next five years in the areas of responsible alcohol consumption, securing water resources, reducing waste and carbon emissions, supporting small enterprises, including emerging farmers, and the support of responsible and sustainable land use for brewing crops.
Farmers with critical conservation assets will be supported in engaging on biodiversity stewardship to protect and restore ecosystems. The stewardship concept is a new way of achieving conservation protection by creating positive, proactive partnerships with private landowners and conservation bodies such as WWF-SA.
“The WWF-SA’s interest in Better Barley Better Beer is to support farmers as key custodians of our South African natural resource base, with advisory extension support to adopt best practice that ensures farming maintains, protects and restores key natural systems, while minimising the environmental impact of production activities for the benefit of producers, as well as downstream users,” says Inge Kotze, WWF Senior Manager: Sustainable Agriculture.
The Better Barley Better Beer guidelines, developed in collaboration with the WWF-SA and SAB agriculturists as well as local barley farmers, drive the implementation of the programme by each producer.
The guidelines provide farmers with criteria, indicators and verifiers to measure how sustainably they are farming. Key indicators contained in the guidelines allow farmers to self-assess their performance using a checklist provided. They are also able to easily identify strengths and weaknesses and develop action plans to correct deficiencies.
“The guidelines are designed to empower the barley farmer to make the right decisions today to ensure the sustainable production of local barley into the future,” says Thinus van Schoor, General Manager SAB Maltings.
A ‘zero sum game’ for the farmer
The pilot is aimed at reducing the cost and risk of doing business and improving crop production, a ‘zero sum game’ for the farmer. Using key metrics, farmers will be able to track improvement and progress overtime to support the development of a business case for sustainable production and they will be able to demonstrate the impact and value of changing practices at farm level and elsewhere in the chain.
SAB intends for the Better Barley Better Beer key metrics to be systematised into accepted industry standards, much like the Barley Passport it introduced in the 2005.
The Barley Passport contains detailed information on chemicals applied on the produce and only that which is registered will be purchased by SAB.
Better Barley Better Beer allows SAB to build on its strategic business objective to help grow the local barley industry and secure its future growth and sustainability. This is in line with South Africa’s strategic plan for sustainable agriculture and the Department of Agriculture‘s policy for sustainable development.
Through Better Barley Better Beer and other sustainable agriculture initiatives, including the construction of a multi-million rand SAB Maltings plant in Johannesburg and its Go Farming programme, which is geared at establishing and supporting emerging farmers, SAB intends to source more than 90% of its barley requirements from local producers.
“Having a fully-fledged and sustainable local barley sector means SAB can rely on contracts with local producers for approximately 93% of its brewing requirements, enabling us to hedge against volatile global commodity markets and, just as importantly, to keep tighter control of quality and ensure a sustainable barley growing sector,” says van Schoor.
Historically, SAB has played a pioneering role in the South African barley industry. It began growing barley locally more than three decades ago, a strategic attempt by the company to become self-sufficient. Since those early days, SAB’s support for the local barley industry has strengthened considerably and the company is today regarded as a critical role player. The strategic industry partnerships it has developed, as well as its close working relationship with producers, is what has helped to yield successes and drive further sustainable growth.
“Our collaborative approach within the agricultural sector has proven to be the most effective method in creating sustainable growth, which is a key objective of any SAB investment. The existing knowledge and skills within the industry is invaluable to success,” says van Schoor.
This focused commitment by SAB to investing in the local barley industry extends to developing and supporting a more inclusive environment with equal opportunities. These efforts stretch as far back as the early 1990s when SAB initiated the Taung Barley Farmers Project in the Northern Cape. The programme has helped to encourage local barley production and create a sustainable source of income for smallholder farmers. Today, it supports more than 120 smallholder farmers, each generating a sustainable income with guaranteed access to market as supported by SAB.
About 160,000 tons of barley are currently grown in the Southern Cape and a further 55,000t (64,000t in 2013 and expanding to 94,000t tons in 2014) are produced in the irrigation areas of the Northern Cape. SAB helped establish South Africa’s barley growing sector in the 1970s, a strategic move to become self-sufficient in producing the key brewing ingredient.
The next phase of the Better Barley Better Beer pilot will be the roll out of specific guidelines to small scale and emerging farmers in the Taung area. These guidelines will be tailored to focus on training the farmers rather than auditing them.