Historically, companies have invested in corporate social responsibility programmes which have mostly taken the form of philanthropic engagements carried out by the public relations arm of the business.
And whilst there is nothing wrong with business giving back to communities within which they operate, this approach is undergoing a transformation as businesses increasingly realise that these efforts could be more sustainable and impactful if they become part of the core business.
It has become more apparent that businesses can make money by resolving community problems, and that this approach is paramount to their overall future success.
Let’s look at some examples. In sub-Saharan Africa, various studies indicate that by 2050, because of climate change, average rice, wheat, and maize yields will decline by upto 14 per cent, 22 per cent, and five per cent respective, which could result in the number of malnourised children in the region increasing to over 52 million.
Increased surface temperatures are also expected to impact the production of some of our flagship cash crop such as tea and coffee, which will be compounded by increased stress on available water resources.
In essence, agriculture and, indeed, our socio-economic environment as we know it today, could undergo a drastic transformation in our lifetime if the requisite mitigation initiatives are not put in place or if we do not plan adequately for these scenarios.
It is therefore imperative for us as leadera in the private and public sector to act today in order to safeguard not only the future of our children and grandchildren, but also the sustainability of the business that we run.
The solution to this, and to many African problems, lies in the principle of shared value, which advocates creating business value for society by addressing its needs and challenges.
In essence, business must reconnect company success with sociak progress.
So, what do we need to do as business leaders in the financial service space?
In a 2014 report, the World Bank estimated that if matched with more electricity and irrigation; smart trade policies and dynamic private agribusiness sector that works side by side with government to link farmers with consumers, agriculture and agribusines together could command a $1 trillion (Sh100 trillion) presence in Africa’s economic by 2030.
Just for a moment, imagine the impact of such a sector to the develooment of the content. Currently worth about $313 billion (Sh31 trillion), the sector provides jobs for 70 per cent of people on the content.
The tripling of this figure will create millions of jobs, feed more mouths and drastically raise Africa’s agriculture export in the global markets.
Additionally, the continent’s farmers, who have borne the burnt of harsh economic conditions, will get a new lease of life as they become more competive in the global market place.
In advanced economies, demand for oroducts and services that meet societal needs is rapidly growing. Food companies that traditionally concentrated on taste and quantity to drive more consumption are refocing on the fundamental need for better nutrition.
As Absa group, we have increasingly trained our focus on the big challanges affecting society and developing solutions to address them.
Looking at the SME sector, for example, studies have shown that 70 per cent of them fail within the first years because of various challanges includibg difficulties accessing including difficulties accessing capital, limited access to market, lack of skills transfer, changes in technology and retention of talent, among others.
To support the sector, our shared value strategy has focused on providing SMEs with the resources and skills requisite to ensure business growth.
Through our Business Club, we have upskilled more than 10,000 business through the various structured programmes and helped them access international trade opportunities.
Through our Enterprise Supply Development solution, which provides unsecuredcfinancingcto SMEs operating within the value chains of our corporate clients, we are giving entreprenuers easier access to finance to advance their business.
As we transition to Absa, ourcnew strategy allows us to go beyond the principles of creating shared value to becoming a more active force for good.
As such, pkaying a shaping role in society is one of the key guiding principles of our new purpose of bringing possibilities to life.