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"Social Business" Partnerships

by Musa Marwana | Posted in Business Centre | No comments yet. | 668 views on this post

The establishment of the HRT "Social Enterprise", is primarily to ensure the "sustainability" of the "Social Purpose" programmes. To achieve long term sustainability also requires NPO's to enter into collaborative partnerships with local businesses.

 

Sustainability Reporting and the Triple Bottom Line

In South Africa the King Report on Corporate Governance (King II) acknowledged the shift in emphasis from mainly financial focus of the past, to a wider and more inclusive approach to doing business in the future. This resulted in the shift from the single bottom line (profits only) to a “Triple Bottom Line” that embraces the economic, social and environmental aspects of a company’s activities.

Sustainability Reporting and the Triple Bottom Line

In South Africa the King Report on Corporate Governance (King II) acknowledged the shift in emphasis from mainly financial focus of the past, to a wider and more inclusive approach to doing business in the future. This resulted in the shift from the single bottom line (profits only) to a “Triple Bottom Line” that embraces the economic, social and environmental aspects of a company’s activities.

King III
The third King Report takes these requirements even further, stating that strategy, risk, performance, and sustainability have become inseparable and have resulted in the requirement for integrated reporting (The Global Reporting Initiative - GRI), which deals with “economic”, “social” and “environmental” activities. It also states that “sustainability reporting” and disclosure must be independently assured.

Why is this relevant?
This is particularly relevant, in that for Company’s to achieve their social and environmental objectives, they need to partner with NPO’s who can deliver these community and social development services.

"Community and Social Development" Service Provider
With many businesses incorporating "Social Responsibility" and Environmental programmes, the HRT has established itself as a leading "Community and Social Development" service provider in the Overstrand, The HRT is well positioned to enter into partnerships with businesses to enable them to achieve their "Triple Bottom Line" and B-BBEE objectives.

B-BBEE
With the introduction of “Black Economic Empowerment” and the B-BBEE Act of 2003 which introduced “Codes of Good Practice”, Industry Sector Charters and the B-BBEE Scorecards, there will be more and more pressure on Companies to meet these goals.  Although these are currently only mandatory for Government and Public Companies (SOE’s), they also apply to any private company wanting to do business with government. However although these are currently voluntary for the private sector, they will apply to the private sector sooner or later. Already the “Codes of Good Practice” and the Scorecard point system provide incentives for all companies to invest in “Socio-economic development” for the future.

Corporate Social Responsibility
The main channel used by Companies to invest in socio-economic development is through Social Corporate Responsibility(CSR) programmes and Corporate Social Investment (CSI).   Government has also put additional pressure on Companies by introducing various industry Charters and scorecards, which although are not all mandatory at this stage, also provide incentives.

The Scorecard
The Scorecard has 7 categories, with points allocated to each category, making up the 100 points. The socio-economic development category (CSR) only has 5 points allocated, however there are 2 other critical "social support" categories that have mainly not been utilised by Companies - “Enterprise Development” (15 points) and “Preferential Procurement” (20 points).

"Social Business" Partnerships
These 3 areas create an opportunity for NPO’s to partner with selected businesses on an equal footing, by becoming the service provision arm of community and social development services, enterprise development and “preferential procurement”, which businesses can’t provide or control. This partnership then enables them to effectively utilise the CSR money budgeted and get high scorecard ratings while being integrally involved in the utilisation of the money as well as the outcomes benefiting the communities.  This also provides accurate information for annual reporting. (Global Reporting Initiative - GRI),

"Social Enterprise"
The best structure for NPO’s to participate in such “business partnerships”, to jointly provide these services while also being able to participate in the benefits  of “Enterprise Development” and ”Preferential Procurement” is a “Social Enterprise”.

If your business is interested in finding out more about entering into a "Social Business" Partnership with the Hermanus Rainbow Trust, please contact me for additional information.

Dave Wreford  tel - 028 316 4325 e-mail dave@rainbowtrust.org.za

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