Corporate social investment (CSI) initiatives are likely to have added R25 billion to South Africa’s economic output in 2015, a new report shows.
Research on the reach of CSI in South Africa – undertaken by the Bureau of Economic Research (BER), Nation Builder and Trialogue – shows that approximately R8.1 billion was spent on CSI in 2015, down 1% in nominal terms and 5.6% in real terms.
At 47%, education received the largest portion of corporate social expenditure, followed by social and community development initiatives and health projects, Trialogue data shows.
The R8.1 billion CSI spend is likely to have contributed R12.5 billion to South Africa’s gross domestic product (GDP). If invested effectively, this likely to have added R25 billion to South Africa’s economic output, the research shows.
It is also likely to have sustained 62 295 jobs – excluding those of people who work in the sector – and generated R7.7 billion in labour remuneration in 2015.
As measuring the impact of CSI in South Africa is not standard practice among all companies which contribute toward social initiatives, BER Macro Service Manager Cobus Venter suggested the research should be interpreted as conservative potential impacts rather than actual impacts.
“So often social investment is seen as a non-strategic thing, that is sometimes a compliance issue or sometimes a heartfelt issue. But if you want it to be effective, you need to implement it in a similar manner to investing in capital,” said Keri-Leigh Paschal, an executive director of Nation Builder.
She did, however, caution that CSI requires patience and an understanding of the environment in which initiatives are rolled out, as it takes a while to effect change in communities.
The report suggests CSI should not merely be motivated by society’s expectations or complying with prescriptions, but rather be “viewed as a professional discipline that contributes to the sustainability of a company’s business activities and creates win-win synergies which contribute to the bottom line”.`
At worst, the net financial effect of CSI spend has a neutral effect on a business, whereas at best, it can contribute to more inclusive economic growth, the report showed.
Venter described this as a rare win-win situation.
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