CSI Matters Now More Than Ever: Why Companies Shouldn’t Put CSI On The Backburner During Economic CrisesYolandaAD
The South African economy was already in decline prior to the onset of the covid-19 pandemic but as we got hammered by the covid-lockdown restrictions in 2020, many struggling companies have had to implement cost and budget cuts. While these measures were pervasive across entire organisations, it was more severely felt in the ‘non-income generating’ departments of Corporate Social Responsibility (CSR), Corporate Social Investment (CSI), and Socio-Economic Development (SED) – who saw entire projects being scaled-back, postponed or completely cancelled.
While it is logical and prudent to ask questions about the financial viability of CSI in South Africa, when faced with an already stagnant economy coupled with the ongoing Covid disruptions that has affected the livelihoods of millions of South Africans and their access to basic necessities such as food, medicine, and education, it does not make financial and strategic sense to cut CSR/CSI particularly in turbulent climates like these. Here’s Why…
Competitive Advantage During Economic Downturns
Many companies claim that CSR and CSI are operational manifestations of their corporate vision, brand identity, internal culture and DNA. Yet, despite this ethos, during economic downturns, investments in these areas are among the first to be scaled back.
While financial survival should remain top of mind in climates like these, the social cost of the Covid pandemic has been higher rates of depression, fear and stress, coupled with declining staff morale. As organisations tighten their belts during economic downturns, it is often up to the remaining staff to produce higher levels of productivity, innovation, creativity and resourcefulness despite environments of deteriorating job security and shrinking resources. However, by cutting back on CSI and CSR expenditure during downturns, a company’s reputation and future recovery can be further weakened as staff and consumers become disillusioned with the companies’ corporate values and societal contribution.
Unfortunately, there are no simple solutions to these complex times but it is imperative that companies maintain their CSI and CSR spend so that they gain valuable competitive advantages over companies that elected to scale back because when the economy eventually recovers, companies that maintained their expenditure will be in a stronger position to take advantage of entrenched consumer perceptions. Companies should therefore view downturns as CSR/CSI opportunities to consolidate their brand presence and community involvement.
With very little fat available to excuse unproductive or inefficient CSR / CSI projects, companies need to take a more targeted and strategic approach to their budgeting. A more focussed strategy will allow companies to build strong brand identities and sustainable relationships. These more targeted projects can then be expanded during the economic recovery while competitors are still trying to re-establish their brand identities.
As the world endures these days of upheaval, companies have the opportunity to redesign their CSR and CSI strategies to implement innovative and targeted projects that will aid society, build relationships for the long-term, and reinforce their position as responsible corporate citizens.
About the Author:
Yolanda Gossel is the Founder and Programme Director at Five Tulips, a South African based sustainability and corporate social investment (CSI) consultancy. Five Tulips forges partnerships between communities, public and private sectors and individuals for social upliftment and preservation of our planets resources and ecosystems.
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