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Finance industry gets thumbs up

Banks and finance companies are doing a better job than other sectors in fulfilling their social responsibilities, according to a new study, “Keeping Good Company”.

It draws on the results of a 2011 nationwide survey of what South Africans see as the most important issues affecting society and how they believe the private sector should respond. It also reveals which products consumers feel need to be more responsible and finds evidence that some consumers will decide what to buy based on environmental and social criteria.

“Our results show a strong interest among the public for products that are environmentally and socially responsible, plus a willingness to act through their purchases. “However, compared with other countries, South Africans are less specific about the issues they want companies to focus on. This presents an opportunity for businesses to help define corporate responsibility, innovate and differentiate themselves in the marketplace,” says Louise Gardiner, the managing director of First Principles Sustainability Services, which ­conducted the study.

The survey explored areas critical to enhancing trust in business. It canvassed 1?000 people from both urban and rural areas, across living standards measure groups one to 10. Education and training stood out as the top issue that companies should address in their corporate citizenship efforts. A large number of respondents also pointed to crime and security, poverty and health as areas where companies could make a contribution.

“Overall, local companies seem to be getting their corporate citizenship efforts right, particularly when they prioritise education initiatives and employment equity. For many sectors, though, this isn’t enough if a company’s core products and services are still perceived as not fulfilling responsibilities to society,” says Gardiner.

Fifty percent of the respondents rated banks and finance companies as “among the very best”, compared with 42% for telecommunications companies and media companies. Tobacco and alcohol companies have the worst reputations when it comes to corporate citizenship. Twenty-one percent of respondents said tobacco companies were “among the very worst”, and beer companies received the next worst rating (15%), followed by alcohol beverage companies generally (12%).

Mining companies received the largest “indifferent” rating (24%) and the petroleum industry received the most mixed views, with 28% of respondents perceiving their ­performance as average. Just fewer than half of those surveyed said they had considered rewarding a company they believed was socially responsible and 20% had done so in the past year.

They also had higher expectations for “operational responsibilities” than “citizenship responsibilities”. This means that consumers want to know about how products are sourced and produced, in addition to companies showing they have invested in the community, says the study.

Professor Mervyn King, the author of the King III report on corporate responsibility and sustainability, says the research demonstrates that the customer wants more eco-friendly products. “This requires business leaders to change their mind-sets about carrying on business as usual, otherwise they will not be meeting the legitimate interests and expectations of their company’s stakeholders,” King says.

The survey was part of global research carried out in more than 25 countries led by international research consultancy GlobeScan Incorporated. “South Africans stand out — in a few ways. They are among the most likely in the world to [have] a high degree of expectation for companies to treat employees fairly and they also express above-average levels of empowerment to shape corporate behaviour through their actions as consumers,” says Chris Coulter, senior vice-president.

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Matt Spetalnick
Matt Spetalnick works from Washington. Reuters Washington Correspondent Foreign Policy/National Security/White House Matt Spetalnick has over 2753 followers on Twitter.

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