This article presents highlights from the 2021 Global Impact at Scale report, published by Trialogue’s global partner Chief Executives for Corporate Purpose (CECP). The report is based on environmental, social and governance (ESG) data collected from 166 companies headquartered in 18 countries.
Almost a third of the companies surveyed (31%) were from sub- Saharan Africa, with data included from 52 of the companies surveyed by Trialogue, 18% were headquartered in North America, 16% in Western Europe, and 14% in East Asia and the Pacific.
Most of the companies were large, with almost half (48%) reporting annual revenue of more than $5 billion (R73 billion). The financial sector had the highest representation in the sample, accounting for just over one-fifth of companies (21%), followed by the materials sector (17%) and consumer staples (11%).
ESG increasingly integrated into business strategy
The integration of ESG issues into corporate strategy is a prominent trend globally and in South Africa and is set to gain momentum in the near future. The majority of global companies (69%) believe that ESG issues are currently integrated into their overall business strategy. Similarly, 67% of South African companies reported that their overall business strategy very much integrates and responds to their critical ESG issues.
Globally, more than three-quarters of companies (76%) believe that ESG will be truly integrated across every department in their company within the next five years, while 63% of South African companies share this sentiment.
Independent structures used to manage giving
Despite increased integration, almost two-thirds of global companies (65%) report having a foundation, of which more than a third (38%) have more than one foundation. This is consistent with findings from 2019, when 69% of international companies reported having at least one foundation or trust. Slightly fewer South African companies (49%) managed their CSI through a separate legal entity in the form of a non-profit company or trust in 2021.
Globally, sustainability (13%), communications (12%) or corporate affairs (12%) departments are most commonly charged with the management of corporate giving. In the majority of international (61%) and South African (59%) companies, staff working on CSI and environmental issues work jointly or somewhat jointly.
Social investment expected to increase
More than a third of international companies (36%) believe that their resources and budgets for social investment will increase significantly over the next two years, compared to 31% in 2019, while a further 51% expect social investment to remain the same, compared to 59% in 2019. South African companies share this optimism, with 41% predicting that there will be an increase in social investment and 42% expecting resources and budgets to remain the same.
In terms of overall expenditure, more than half of international companies (54%) spent less than 2% of their profit on social investment, 20% spent more than 2%, and the balance were unsure. In line with this, more than half of South African companies surveyed (57%) spent less than 2% of their net profit after tax (NPAT) on social investment, while 12% spent more than 2% of NPAT.
Covid-19 driving increases in giving
Increased expenditure for the purpose of Covid-19 was the most common global impact of the pandemic (41%), with a further 15% of companies whose expenditure remained the same reporting a shift in focus to Covid-19. Less than a fifth of international respondents (18%) indicated a reduction in CSI expenditure due to Covid-19.
By comparison, more South African companies (38%) indicated that CSI expenditure reduced due to Covid-19, with 15% experiencing a reduction of more than 20%. Increased CSI expenditure was reported by only 29% of South African respondents, while 28% reported Covid-19 had no impact on CSI expenditure.
Internationally, healthcare was the most common form of new intervention in response to Covid-19 (65%), while water, hygiene, and sanitation initiatives accounted for 10% of new interventions. Only 7% of international companies responded with new interventions in food security, unlike in South Africa, where 71% of companies supported food security initiatives in response to Covid-19.
International companies give more globally
Nearly half of the international companies surveyed (44%) contributed to at least one international programme, with a median of 25% of grants given by these companies having international impact.
By comparison, only 7% of South African companies supported projects outside of South Africa, which received less than 1% of total CSI expenditure. South African companies tend to support projects in neighbouring countries when giving internationally, including Zimbabwe, Botswana, Mozambique, and Lesotho.
Employee match funding and virtual volunteering gaining prominence
Employee match funding has become a common element of employee volunteering programmes around the world. More than two-thirds of international companies (70%) offer a monetary match to personal donations or gifts, in which an average of 31% of employees participated. Lagging this, just over half of South African companies (51%) offer employee match funding, with a participation rate of only 14%.
International companies also offer employees more time off for volunteering: a median of 16 hours or two days, compared to a median of eight hours or one day for South African companies.
When asked about the impact of the pandemic on volunteering, nearly half of international companies who had virtual volunteering programmes indicated that they adapted their existing virtual volunteering programmes (45%) or found new partnerships in order to expand their virtual volunteering service offering (45%), while more than a third (36%) created a virtual volunteering programme from scratch. South African companies followed this trend to a lesser extent, with 18% of companies reporting new online volunteering programmes and 28% indicating that existing volunteering programmes shifted to online.