South African ungovernable state of sustainability in business (Corporate Purpose)

South Africa was hailed as a beacon of hope to the world as it successfully transitioned to democracy from the brutal apartheid regime. However, the hopes of becoming a rainbow nation have faded as the country continues to wrestle with crippling inequality, social upheaval and injustice despite having one of the so called progressive Constitutions in the world. This topic aims to illuminate the landscape of CSR/CSI, ESG, and their connection to legal compliance.

Environmental, Social, and Governance, or ESG, is among the hottest topics in the environmental and investment worlds these days. Human influence is unequivocally to blame for the warming of the planet and some forms of climate disruption. ESG investors seek to ensure the companies they fund are responsible stewards of the environment, good corporate citizens, and are led by accountable managers. ESG investing is sometimes referred to as?sustainable?investing, responsible investing,?impact investing,?or?socially responsible investing?(SRI). To assess a company based on ESG criteria, investors look at a broad range of behaviors and policies. Investors have, in recent years, shown interest in putting their money where their values are. ESG investors are increasingly gaining momentum in informing the investment choices of large institutional investors such as public pension funds. ESG consist of three (3) major components to consider: Environment, Social and governance which are touched on below.

1. Environmental: Environmental issues may include corporate climate policies, energy use, waste, pollution, natural resource conservation, and treatment of animals.?ESG considerations?can also help evaluate any environmental risks a company might face and how the company is managing those risks.

2. Social: Social aspects look at the company’s relationships with internal and external?stakeholders.

3. Governance: ESG governance standards ensure a company uses accurate and transparent accounting methods, pursues integrity and diversity in selecting its leadership, and is accountable to shareholders.

ESG investors may require assurances that companies avoid?conflicts of interest?in their choice of board members and senior executives, don't use political contributions to obtain preferential treatment, or engage in illegal conduct.

Corporations should engage in socially responsible business practices (CSR/CSI) given its history in matters of social justice. As the nation is dealing with its multifaceted metrics of social challenges while also coming to grips with its traumatic past. It has been clear that the framework governing these practices are not adequate and effective including the CSI operational principles coupled with the National Development Plan and Sustainable Development Goals.

This was supposed to be a end to end Project Management consisting of a project management lifecycle, which needed to consist of four stages: #initiation, #planning, #execution, & #closeout. There is no comprehensive project plan rollout, schedule, timelines, agenda, forecasting. Initiatives relating to environmental, social, and governance matters (“ESG”) is gaining prominence globally, but remains highly contested. Standard practice for Corporations in regards CSI and ESG remains in a state of oblivious as to who is responsible to audit and focus on big cooperates and ensure that they carry these two very important tasks. An end to end process will often consist of all four stages mentioned above, however in RSA case it is lingering in the air with no controls even when plans are there. The process begins with the start of a project or process and ends with the final wrap-up after product or project delivery has been made, we are 30 years into democracy, out of billions made by corporate industries nothing significant can be pointed towards regain ground of previous social injustice.

Such failures to do inspection in loco on companies propels evasion of tax contribution. The current status has permitted big corporates to take chances and play Russian roulette with RSA government absence in governance. Deeper examination reveals that conflicting responsibilities within government ministries is another issue which has sent this matter to ICU. Currently, the Compliance Institute Southern Africa (CISA). CISA sets, maintains, and promotes best-practice standards for the compliance profession and has developed a Generally Accepted Compliance Practice (GACP) framework to govern business standards. Their compliance-management skills and standards, which are nationally recognized are just a set of rules which scares nor align no corporate.

From aligning shareholder and stakeholder interests for shared value and risk management, to going beyond compliance and profit-maximizing strategies, there is no consensus on what socially-responsible activity entails and the rationale for its pursuit. Multinational Organizations in RSA simply ignore such practices due to the state of affairs within government ministries and policing. Nobody wants to be told that they must comply to standards. If companies were not forced by customers and market pressures, they simply wouldn’t comply. Why create standardization that has no consequences, due to fear that companies can replace you with a competitor’s equivalent in another country? Why create such rules that can be benchmarked and easily compared with the rival countries?

Compliance to standards does not come naturally to the government that makes policies a living at building custom solutions for the country. Highly customized systems with nonstandard technologies and methods that only one team in the world can understand and support is the perfect way to lock in a customer for a long period of time. By creating meaningful change for business, a new equation must be established in turning?ESG?theory into action. Standard compliance requires that you define them, being knowledgeable about them, to apply them, and to show proof of compliance —that’s a drag, and costly.??Whereas, non-compliance, when made possible, will always be chosen as the path of least resistance.?

The National Development Plan and Sustainable Development Goals seem to be not having a blue print in law enforcement and the use of advance computing and robotic systems that can help policing policies be more effective while performing their duties. This could include devices that peace officers can use on inspection in loco to better identify companies and record details of interactions, warnings which would create a master data for the government ministry concern.

In conclusion I submit key take aways to readers who would like to engage on the subject matter

KEY TAKEAWAYS

There is still room for government improvement

Yearly National Indaba about ESG, monitoring and continuous improvement

Environmental, social, and governance (ESG) investing is used to screen investments based on corporate policies and to encourage companies to act responsibly.

ESG frameworks, in turn, can help government and organizations apply a broader approach to sustainability and highlight the potential risks in applying new digital technologies.

Handholding of companies by government agencies in training, development, coaching, mentoring.

Corporates must have a ESG officer appointed to perform the main ESG awareness duties in the workplace. He or she is responsible for ensuring that there is a serious undertaking of ESG in working environment for employees and other relevant parties.

Government must invest and rely on new?technologies?to navigate, filter and create data to better execute?ESG?obligations and ambitions.

Via media promotion of public narrative of ESG/CSI/CSR

Holistic collaboration between government and cooperation's

Use digital technologies to?improve efficiency, reduce waste and provide less carbon-intensive means of environmental management.

Many mutual funds, brokerage firms, and robo-advisors now offer investment products that employ ESG principles.

ESG investing can also help portfolios avoid holding companies engaged in risky or unethical practices.

The rapid growth of ESG investment funds in recent years has led to claims that companies have been insincere or misleading in touting their ESG accomplishments.