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 businesses giving back to the 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 became 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 up to 14 per cent, 22 per cent, and five per cent respectively, which could result in the number of malnourished 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 crops 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 leaders in the private and public sectors to act today in order to safeguard not only the future of our children and grandchildren, but also the sustainability of the businesses that we run.
The solution to this, and to many African problems, lies in the principle of shared value, which advocates creating business value in a way that also creates value for society by addressing its needs and challenges.
In essence, businesses must reconnect company success with social progress.
So, what do we need to do as business leaders in the financial services space?
In a 2013 report, the World Bank estimated that if matched with more electricity and irrigation; smart trade policies and a dynamic private agribusiness sector that works side by side with government to link farmers with consumers, agriculture and agribusiness together could command a $1 trillion (Sh100 trillion) presence in Africa’s economy by 2030.
Just for a moment, imagine the impact of such a sector to the development of the continent. Currently worth about $313 billion (Sh31 trillion), the sector provides jobs for 70 per cent of people on the continent.
The tripling of this figure will create millions of jobs, feed more mouths and drastically raise Africa’s agricultural exports in the global markets.
Additionally, the continent’s farmers, who have borne the brunt of harsh economic conditions, will get a new lease of life as they become more competitive in the global marketplace.
In advanced economies, demand for products and services that meet societal needs is rapidly growing. Food companies that traditionally concentrated on taste and quantity to drive more consumption are refocusing on the fundamental need for better nutrition.
As Absa group, we have increasingly trained our focus on the big challenges 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 five years because of various challenges 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 businesses through the various structured programmes and helped them access international trade opportunities.
Through our Enterprise Supply Development solution, which provides unsecured financing to SMEs operating within the value chains of our corporate clients, we are giving entrepreneurs easier access to finance to advance their businesses.
As we transition to Absa, our new strategy allows us to go beyond the principles of creating shared value to becoming a more active force for good.
As such, playing a shaping role in society is one of the key guiding principles of our new purpose of bringing possibilities to life.
Jeremy Awori is the Managing Director, Barclays Kenya, part of the Absa family
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