by Sheree Hanna

Need for improved collaborative action

Growing interest in developing ethical trade and CSR at the same time

Fairtrade develops ethical trade and CSR simultaneously

The Fairtrade movement, which is gaining momentum in South Africa, is part of a shift in the way business is being done in the country – which bodes well for the future.

Ralph Hamann, an associate professor at the University of Cape Town Graduate School of Business, says that the growth of Fairtrade and other initiatives such as Woolworths’ Farming for the Future are indicative of a growing realisation that social and environmental threats to business won't go away unless business itself does something about them.

“This is a positive trend that shows South African businesses are thinking more innovatively about corporate social responsibility (CSR) and their role in building a better future,” he said.

Fairtrade, which seeks to promote a more equitable and sustainable farming sector, is a leading ethical certification in the world and has more than 1.2 million beneficiaries (farmers and farmworkers) in 66 countries. There are more than 30 Fairtrade brands in South Africa.

The country is the biggest producer of Fairtrade wine in the world and also the first where Fairtrade is active on the production and marketing side. Traditionally, Fairtrade has been about commodities exported from developing countries for sale in the developed world.

“There is a lot we can do with Fairtrade locally,” said Arianna Baldo, business manager at Fairtrade SA. “There is growing interest in developing ethical trade and CSR at the same time in this country.”

Hamann said that recent painful events such as Marikana have contributed to this shift in awareness locally, that a wider perspective on social and environmental issues is inescapable if business is to continue to prosper.

He added that, historically, a disconnect between core strategy and CSR outreach has prevented corporates from thinking more broadly about these issues. He cited, as an example, a micro-financing organisation that focuses on paper recycling and sponsoring bursaries, but which is not engaging proactively with social issues around responsible lending.

“When I suggested that they were missing the key material issue in their business – responsible lending – they said they were complying with the National Credit Act,” he said. "But a narrow focus on compliance is not going to shift the problems that we see.”

Hamann called this a form of myopia because many business leaders prefer to focus on their day job and their shareholders, and don’t really take a longer term view. Neither do they look spatially beyond the boundaries of their operations.

“Not enough companies are carefully thinking about tipping points in the socio-ecological systems, which can lead to ecological collapse or social unrest. Lead indicators include the prices of oil and food, high inequality and distrust in government.”

Some additional evidence of this shift includes more emphasis on the idea of shared value, or the notion that businesses can generate value for themselves by providing new products and services, or developing new business models, which also contribute to addressing social and environmental problems.

These themes are being discussed increasingly at executive and board level, in order to ensure the strategic integration of social and environmental issues into the core strategy of the business. This is being advanced in part by the global move toward integrated reporting.

South Africa is the first country in the world to make integrated reporting a requirement for listed companies. 

“If we don’t integrate an understanding of companies’ socio-ecological context in strategy-making and execution, and if we don’t recognise the need for improved collaborative action, these challenges have a nasty habit of turning around and biting us – as we have seen so clearly,” he concluded.

comments powered by Disqus


This edition

Issue 23


TLConvention We would also like the world to see what young South African leaders are all about, so please remember the event hashtags… 9 months - reply - retweet - favorite

Ubuntumag1 'Hennessy VSOP Privilege Limited Edition' product launch'. #launch #hennessy 0 years - reply - retweet - favorite

TLConvention Opening speaker at #OMTLC, Minister Jeff Radebe recently spoke to - 0 years - reply - retweet - favorite