The global village has realised the importance of Corporate Social Responsibility (CSR) in constructing the most vibrant and competitive companies. This demonstrates how imperative it is to support voluntary initiatives from all sectors in order to achieve sustainable development goals. Therefore, businesses have a better chance of increasing their bottom lines by embracing CSR.  Notably, we have seen in the telecommunications industry the likes of Econet developing sustainable CSR initiatives that have seen disadvantaged children securing educational scholarships. This not only empowers brand Econet as a business but it goes a long way in supporting sustainable social development of the disadvantaged communities that co-exist with brand Econet. In as much as we see the greater benefits that flow out of CSR, we still need to examine “whether CSR is sustainable in an inflationary economic environment such as the case in Zimbabwe?”

This submission is meant to look into the role that CSR plays in the contemporary world and conclude whether or not it gives any kind of competitive advantage on the business of any kind. Due to the fact that Corporate Social Responsibility (CSR) not only helps communities, but also gives businesses a competitive edge and makes them more profitable in an age of globalization and stiff competition among businesses in the global marketplace. CSR has become a very important topic of discussion in both the academia and contemporary business environments. CSR has played a pivotal role in empowering the vulnerable groups in society at the same time catapulting organisations who are involved in the practise. 

According to a scholar named Van Marrewijk (2023), corporate social responsibility (CSR) is the practice of businesses voluntarily incorporating social, environmental, and economic concerns into their business operations and their interfaces with different stakeholders in an open and accountable way. Companies that value CSR benefit from increased stakeholder confidence, which is evident in higher returns, good remuneration, prompt payment, enhanced reputation, and goodwill. In addition, as the aforementioned evidence shows, the firm’s investment in CSR leads to the recovery of corporate credibility in product, service and company crises, enhances a firm’s public image, and gives the firm distinctive comparative marketing advantages. This is true principally among consumers who are becoming more socially conscious, which in turn boosts the company’s long-term revenue.

 We have seen this culture taking centre stage even in developing nations where CSR has become a rhetoric. A lot of mining companies which are extracting minerals are prompted to come up with local CSR initiatives as a way of thanking the local community for allowing them to operate in their areas jurisdiction. Those that have compelling interest within the communities they exist in have been seen building schools, drilling boreholes, building houses for the local chiefs from where they are extracting the minerals. The initiatives have been duped community share ownership schemes where companies invest within the local communities without direct benefits flowing into their companies. Such community participation has seen the improvement of lives for those that reside in areas where such mining companies are investing in activities that support their sustenance.

Although, many admit that a lot can be done in terms of compelling these companies to participate in communities by way of enforcing them too through statutory means. It’s imperative that these mining companies realise that voluntary participation increases their competitive advantage than being compelled to do so. A consulting organisation called Alteri, state that the promulgated indigenisation and empowerment laws in Zimbabwe should see CSR programmes being a major component of the compliance package for indigenisation and economic empowerment within the mining sector in Zimbabwe.  They further state that the Zimbabwean government has confirmed that the 51% threshold should be a combination of direct equity and credits earned through CSR investment made up of skills development , support to tertiary institutions and small to medium enterprises just to mention a few. It is thus incumbent in the mining companies within Zimbabwe to revaluate their CSR programmes to ensure that they are reaping the maximum benefit from their investments into the community, by nurturing a unceasing sustainable relationship with their surrounding community as well as ensuring that their CSR programs are taken into account from a government point of view to ensure compliance with statutes of the land.

Mining plays a key role in the developing country’s socio-economic development and the sector is among the most venerated companies for CSR initiatives. Corporate social responsibility is about living your values every day. It is about actions, results, and the maintenance of open lines of communication with clients, customers and stakeholders. Research information shows that the mining conglomerates are concentrating much on health and education projects in the societies they work in. In developing countries, for example, corporate social responsibility is most often corporate social investment in education, health, sports, development, the environment, and other society possible services is often viewed as the most imperative and effective way for business to make a social impact because it can have a direct and quantifiable effect on people’s lives and the world around them rather than through investment in job formation, taxes, and technology initiatives.

Sponsoring public services like infrastructure, schools, hospitals, and housing is typically seen as the government’s obligation in more developed countries, but in developing countries, companies often fill this role. CSR initiatives in developing nations focus on dissimilar issues than those in the developed world. Such initiatives include monitoring HIV/AIDS, improving working conditions, increasing access to essential services, ensuring a reliable supply chain, and reducing poverty are among the issues being prioritized. The mining sector, on the other hand, is committed to consistently improving its social and environmental performance.

In developing countries small to medium businesses, in general, have a different understanding of Corporate Social Responsibility (CSR), and their involvement in CSR efforts is also limited. A lot of small to medium companies believe that in order to obtain a license to operate from the government, all they need to do is comply with the bare minimum standards established by government statutes regarding working conditions and the impact on the environment. In a very competitive market, companies that take the steps needed to really address labour and human rights issues often find themselves at a disadvantage compared to competitors who are less careful about how they do business because there are saving through cutting corners. There are lot of statutes even those governed by Environmental Management Agency (EMA) which intend to promote the environment in general which some corporations do not follow. Such companies might be assumed to be saving alot by non-compliance but there are detrimental effects when they are caught on the wrong side of the law like negative publicity, fines and threats of business closure. It seems that for an organisation to benefit from CSR it has to come from the bottom of their hearts. They have to do it with intention to serve not for financial gain but to make this world a better living place for all humanity. Many benefits will accrue through this kind of approach.

CSR has also been a priority in commerce world over. The improvement of a company’s financial performance can be significantly affected by CSR. In addition, the capacity of companies to respond to the regulatory requirements imposed by CSR has become a progressively imperative factor in the process of sustaining their global competitiveness. This is because companies have to follow international best practices and rules about CSR in order to get a permit to the international market. For companies yearning for global reach whether large or small will have to embrace CSR in order for them to be attractive in the global markets. Honestly, those companies who are only barely meeting the regulatory requirements in terms of their CSR programmes run the risk of losing global competitiveness when they intend to reach global markets.

Earlier on we inquired if CSR programmes are sustainable in inflationary environment. I would like to postulate that CSR indeed does work in difficult circumstances. It is actually these difficult circumstances that require many better corporate citizens who are indulged in CSR so as to transform societies. Management has to come up with innovative ideas as to how to keep CSR projects running without affecting business continuity. All institutions seek competitive advantage because it is the force that keeps these companies ahead of the competition and gives it the capability to stay in business for a while. The competitive advantage is made up of brand recognition and helps the business become the first choice in customer’s minds because of the community initiatives they are involved in. The mining and telecommunication industries are a good example of how CSR can give a business a competitive edge as it has been demonstrated above.

By Sydney M Sibanda 

Regional Manager (Southern Region) at CMED (PVT) LTD, A leading Marketing Practitioner/ Consultant and award winning Entrepreneur at ZNCC 2023 awards ceremony with interest in meat and security sectors with more than 12 years of marketing experience. 

A holder of MSc Strategic Management (CUT), BPhil Marketing Management (IMM), Diploma in Marketing (LCCI), BSc Psychology (ZOU), MCIM (UK), currently studying DPhil in Marketing with (CUT).