Corporate South Africa has responded to the Covid-19 pandemic with a strong sense of corporate citizenship, attempting to alleviate both the short-term and longer-term effects of the crisis. Although companies have themselves been dramatically affected by the pandemic, they have also shown how conscious capitalism can play a role in development, both during and after a disaster.
The private sector in South Africa has been accustomed to challenges in recent years, but the novel coronavirus crisis has compounded this – it has had a dramatic effect on the economy, with around R13 billion lost each day during lockdown.1 With risk difficult to quantify as it is unclear when the pandemic will subside, companies across all sectors have issued profit warnings, curtailed spending, retrenched staff, and in some cases been forced to close their doors.
According to Statistics South Africa (Stats SA), around 2.2 million jobs were lost in the second quarter of the year (a figure qualified by Stats SA itself as telephonic surveys took the place of the usual in-person surveys conducted by the organisation).
The private sector has nevertheless responded swiftly to the crisis. Almost all the companies surveyed by Trialogue during lockdown said they had intervened to ensure the health and safety of staff (99%) and customers (83%). The sector has made philanthropic donations, repurposed skills and assets, and engaged in productive multistakeholder responses, meeting a variety of pressing challenges with speed, efficiency, and compassion – at least four out of five companies (81%) have made philanthropic contributions while two-thirds (64%) have participated in multistakeholder responses such as government dialogues and industry initiatives, according to Trialogue’s research.
By supplementing public-sector resources, companies have helped to mitigate some of the worst effects of the novel coronavirus crisis – something that will be remembered by partners, employees, customers, and communities. These contributions for good could pave the way for a new era of social responsibility. Companies engaging in more visible, or first-time, socially responsible activities may find that these endeavours are popular among employees and customers, and may drive greater loyalty in future.
Protecting employees, suppliers and customers
The top priority for most companies when the pandemic arrived in South Africa was safeguarding the health and safety of employees by implementing travel restrictions, work-from-home or flexible working policies, and stringent hygiene practices. Unions expressed concerns that some employers were not taking sufficient measures to protect staff, drawing attention to the increased responsibilities of business at this time. Additionally, the Commission for Conciliation, Mediation and Arbitration received thousands of complaints of unfair dismissal during lockdown. Disappointingly, there were reports of employers receiving relief from the Unemployment Insurance Fund’s (UIF) Covid-19 Temporary Employer/Employee Relief Scheme (TERS) but not passing this emergency funding on to their employees.
Fortunately, however, most companies found ways to honour their agreements with both staff and suppliers, and keep people working, or at the very least stave off financial distress. Larger companies have generally been in a strong enough financial position to support staff with full pay, with smaller companies placing staff on unpaid leave or reduced salaries. Santam recognised that staff earning commission or salesbased income were vulnerable and covered their earnings with an average of their earnings for three months.
TechnoChange Solutions was one of the first companies to pay to have their staff tested for the virus and they urged other companies to follow suit, particularly where there was no clarity regarding medical aid payment. Shoprite introduced a 24-hour helpline for employees and immediate families, also paying a once-off R102 million ‘appreciation bonus’ to shop floor and distribution centre staff as they worked to help feed the nation. Some companies have also provided their employees with mental health support, and Pharma Dynamics launched a toll-free helpline for the public as well as the ‘Let’s Talk Covid-19: Coping Guide’ online.
For suppliers, strategies included delaying payment deadlines, prepaying for future service, and repurposing products and services. MultiChoice set aside R80 million to ensure that production houses would be able to pay the full salaries of their cast, crew, and creatives during March and April. Fluence Capital offered pro bono support and guidance for South Africans facing the potential loss of their businesses and Cell C and micro-jobs platform M4Jam launched a R2 million project to assist gig workers.
For customers, companies introduced measures ranging from payment holidays to dedicated hours for senior shoppers. These measures were intended to cushion them against financial shocks as well as protect the most vulnerable citizens against infection. Momentum Insurance made R26 million in future noclaims and safety bonuses available to clients, with early cash-back available for claiming between April and June. Most businesses have ensured that their clients remain informed and protected, posting relevant updates on their websites.
A Covid-19 consumer report indicates that retail brands have made the most positive impact during the lockdown, with the general public remarking on their willingness to help vulnerable citizens as well as healthcare workers, their educational initiatives relating to Covid-19, and their moral support. It has proved important to motivate customers, remain future-focused, and provide a sense of hope – reaffirming a commitment to assisting customers has provided a sense of community during a time of physical distancing.
Corporate social innovation
While CSI programmes remain a crucial way to make a difference in society, crises can lead to corporate social innovation in a broader sense. Several companies found creative ways to offer support by leveraging their core business assets and capabilities. Some pivoted so that their products could meet an essential goods demand. Sasol, which experienced an increased demand of almost 400% for alcohol-based products, worked with the Department of Trade and Industry to develop a new variant of its alcohol-based chemicals for hand sanitisers. Curro Holdings printed protective face shields for medical workers on site at many of its schools, which have 3D printers.
Other strategies employed by companies include making content behind paywalls or for members only freely available, as well as offering discounts, drive-through shopping, and other measures to help consumers and prevent scarcity. Support for competitors has also been evident during the crisis, with a Spar in the Western Cape closing its stationery section and removing its frozen burgers to help neighbouring stores survive the pandemic. These measures have helped those on the frontlines to keep going, ensured that people are supplied with essential goods, and helped to lower the cost of living for those struggling to remain solvent.
Addressing the social crisis
Social solidarity took on a new complexion during the pandemic, with a notably comprehensive corporate response. Trialogue’s research indicates that only 4% of corporates surveyed said their CSI programmes had ceased or been put on hold – 10% said that programming had increased, 24% that they had changed or adapted their programmes, and 30% said they had reduced their programmes. This indicates that, financial challenges notwithstanding, companies have tried to continue with their programmes as far as possible, pivoting to respond to specific needs. Corporates were most likely to support or fund Covid-19 interventions in food security (64%), healthcare (60%), and via contributions to the Solidarity Fund (60%), which went some way towards alleviating hunger and mitigating the spread of the disease.
Hunger and poverty were hugely exacerbated during lockdown and the United Nations Development Programme (UNDP) noted in August that Covid-19 had likely wiped out a third of South Africa’s middle class, which will have repercussions on households in the future. Some 54% of households were pushed out of permanent jobs to informal or temporary contracts, and these households were likely to fall into poverty once the stimulus packages fall away, according to the UNDP.
Companies have been able to align their responses to their focus areas and core competencies, targeting immediate needs but also considering which responses might be useful in the longer term – an important point when designing interventions. The evolution of corporate social investment (CSI) programmes has led to some deep insights about programme design, and monitoring and evaluation (M&E).
A number of large companies have understood that they have a responsibility to the broader communities from whence their employees come – and they have stepped up with comprehensive plans to assist them, both now and into the future. Mining giant Anglo American Platinum looked after communities around its operations by distributing food parcels, providing local clinics with personal protective equipment, and working closely with government to provide water. The company’s Community Response Plan was drafted in consultation with communities, traditional and faith leaders, and government agencies – a salutary lesson for businesses wishing to make a wider impact. Chemicals group AECI also took care of communities around its operations, launching a response programme in Dunoon and Table View, Cape Town. The company focused on food relief, sanitiser distribution, and setting up hand-washing stations. It also provided funds to public clinics. Some pivots have seen companies support communities in unique ways. Redshift, which builds websites, created the Redshift Store Connector for small retailers like spaza shops to become more visible and Say Siyabonga launched a platform to help local businesses survive the lockdown by offering their customers discount digital vouchers for goods and services to help them with cash flow, redeemable once lockdown is over.
Food insecurity at household level was a growing problem in South Africa prior to the pandemic, with almost 20% of South African households having inadequate or severely inadequate access to food in 2017, according to Stats SA. The pandemic exacerbated the situation hugely, which is why many companies partnered with non-profit organisations to feed communities experiencing hunger, even though their CSI programmes are not food-focused.
In May, billionaire businessman Douw Steyn, founder of the BGL Group, donated R200 million towards feeding schemes in Diepsloot, a township in Gauteng. In June, Engen donated fuel to the value of R1 million to FoodForward SA to help them reach needy communities, and on 16 October – World Food Day – they again partnered with FoodForward SA to pack and distribute food hampers for various beneficiary organisations. And mealkit company UCOOK, along with partners Ellerman House and network provider Rain, hosted Africa’s biggest virtual concert, Music for Meals, on 30 October. The aim was to aid partner organisations in carrying out crisis relief and food-aid initiatives. With 500 million people at risk of falling into poverty worldwide, there will be an urgent need to provide people with the basics required to survive for many months to come.
The healthcare response
Assisting the broader healthcare response was another way in which companies showed their commitment to the cause. Jaguar Land Rover and Isuzu Motors provided vehicles to non-profits working at the coalface of the novel coronavirus response, including 11 Land Rovers for the Red Cross Society and a fleet of Isuzu test vehicles for Gift of the Givers’ testing stations. Uber partnered with the Bill and Melinda Gates Foundation to deliver chronic medication to vulnerable patients while Pick n Pay introduced special shopping times for pensioners and South African Social Security Agency grant beneficiaries. The Momentum Metropolitan Foundation made more than R4 million in emergency funding available to the Red Cross, UNICEF, and its strategic partners working to solve the youth unemployment problem.
Education remains in crisis in the country, with Stats SA estimating that in recent years only around 50% of youths have completed grade 12. The pandemic has exacerbated this, with remote learning opportunities only accessible to households that can afford them.
Companies supporting educational programmes have had to adapt to the new reality. Promaths by Investec, in partnership with the Kutlwanong Maths, Science and Technology Centre and the Department of Basic Education, launched a virtual classroom experience on the Mobi-Tuta platform it was already using to provide live tutoring to Promaths learners in areas without access to quality teaching. Investec partnered with Vodacom, MTN and Cell C to enable learners to access the platform free of charge, with Investec footing the bill for data.
On the literacy front, Standard Bank stepped up to partner with Nal’ibali on its reading for enjoyment campaign, launching a special Covid-19 relief project to help communities in Gauteng and Limpopo to navigate disruptions to the school year. The campaign promotes daily read-aloud routines to ingrain reading habits within children.
Rebuilding beyond the emergency
Emergency responses have quite literally saved lives. However, as the lockdown eases, the pandemic will bring different challenges. Hunger may be less pressing, but public health will come under enormous pressure. It is therefore imperative that companies repurpose their CSI programmes to consider the balance between responding to immediate needs and having more sustainable interventions in place.
The pandemic is ‘stress-testing’ CSI and it is not clear how programmes will be affected in the medium and long term – but what is clear is that companies should remain flexible and openminded. In a fluid landscape, change is inevitable. Priorities and relationships are shifting, along with funding approaches, and being proactive about due diligence is vital. With fewer resources and capital available for the future, it will become increasingly important to understand how existing resources and capital were deployed during the crisis, and what impact was achieved. Doing more with less is crucial, and it may be that funding practices and programmes will need to be redesigned, doing away with outdated approaches.
Blended financial models and greater collaboration may be necessary to scale interventions that have worked well. In addition, crowdfunding could be applied to the CSI context – prior to the pandemic, Standard Bank worked with student crowdfunding platform Feenix to raise over R30 million to help more than 1 000 students cover costs associated with tertiary education (Feenix is a public benefit organisation and CSI contributions are eligible for tax benefits).
As stakeholder capitalism comes to the fore, different strategies may emerge. CSI programmes may have to be repurposed or redirected – after emergency measures have been put in place, it will be important to look at post-recovery measures to support affected communities. It goes without saying that any interventions should be aligned with changes to company strategy and operational activities as well as government regulations or guidance.
A respected and credible strategic partner
The pandemic has proved that the somewhat fragmented private sector can adopt a shared business agenda in a crisis – something that should be taken forward as the country rebuilds. In Recession, Recovery and Reform: South Africa after Covid-19, former CEO of Business Unity SA, Tanya Cohen, argues that business is at a crossroads and can either follow its previous trajectory and be somewhat influential though largely divided, or consolidate its efforts to contribute meaningfully to the country’s economic and social revival and wellbeing. The creation of Business For South Africa (B4SA) has proved that business can play a unifying role in the country and advocate for the socioeconomic outcomes it would like to see. As a respected, credible strategic partner it can become an even greater force for change if it takes the right path for post-pandemic rebuilding.
1. Van den Heever, A., Francis, D., Venter, F., Valodia, I., Allais, L., Veller, M., Sachs, M. and Madhi, S. (20 April 2020). South Africa needs a post-lockdown strategy that emulates South Korea. https://theconversation.com/south-africa-needs-a-post-lockdown-strategy-that-emulates-south-korea-136678