As we commemorate the publication of the 200th edition of this weekly CSRFiles Digest, we have carried out a mini study on the communication of Corporate Social Responsibility (CSR) activities across different sectors in Nigeria.
A sneak peek into our soon to be published review on the 2016 state of CSR in Nigeria reveals that although about 70% of Nigerian organisations engage in CSR, only about 25% publish CSR/Sustainability reports while only about 13% of the survey respondents could confirm that their companies make public disclosures on total amount spent on community investments.
Furthermore, a review of the websites of major organisations in Nigeria in the aviation, telecommunications, manufacturing, financial, agricultural, educational, non-governmental, and governmental sectors, reveal that a good number of top organisations in these sectors do not digitally communicate their CSR activities nor publicly disclose formal CSR reports or the percentage of profit spent on CSR projects. Apart from NGOs, which majorly operate social ventures and a few financial institutions, most organisations do not communicate via their websites. Nevertheless, according to a survey by Fleishman-Hillard in 2007, the internet has become the leading source for CSR information for the majority of Americans. With the progress of technology and new media in Nigeria, the internet has also become an information haven for many Nigerians – by Q3 2016, Nigerian internet users were 94Million (Nigerian Communications Commission).
Furthermore, in the financial sector for instance, apart from a few banks which have dedicated but sparsely updated CSR pages, other major financial institutions do not disclose CSR activities on their sites. More troubling are deductions from the websites of a major Nigerian telecommunications company and a major manufacturing company, which reveal no CSR footprint/no updated CSR activities since 2011, respectively. Yet, over half of Nigerian organisations claim to engage in CSR activities.
Broadly speaking, the history of CSR practice in Nigeria is very recent. It only gained momentum when disputes between prominent oil companies and their host communities exposed the importance of putting into consideration the impacts of business activities on the well-being of stakeholders. For a long time, CSR in Nigeria was characterized by a muddled mix of charity, corporate philanthropy, emergency relief, scholarships, bonanzas, sponsorships, and other altruist gestures. Even though the past few years have seen a steady evolution of the practice of CSR from a form of corporate philanthropy to a more structured and all-encompassing model, it still suffers from lack of structure and communication in many organisations.
However, communication does not make a company socially responsible but it demonstrates commitment to social development, enhances accountability and kick-starts a conversation with stakeholders for possible engagement thereby exposing impact which creates further impact. More so, one of the key aspects of good CSR practice is honest communication. The concern then is, if more Nigerian organisations are embracing the practice of CSR, why then is communication of activities and spending sparse?
Although, there could be many reasons for the poor communication of CSR activities in Nigeria, two stand out as core obstacles:
Understanding and Approach to CSR: It is disturbing that many Nigerian organisations view CSR as a ‘box-ticking’ exercise. Hence, even though more companies are paying attention to it, most of them are doing so for the wrong reasons. In our survey, over half of the respondents revealed that their organisation’s CSR are motivated by the expected need/urge to give back, the necessity to conform with international standards, and because of international reputation/business opportunities. On the contrary, CSR is beyond ‘giving back’ rather, it is a conscious responsible behavior; doing business in a manner that builds value to enhance the value upon which the system depends.
It is only when Nigerian organisations begin to view CSR beyond philanthropy, charity, or the compulsion/inclination to adhere to international standards that it would be integrated into operations. In addition, organisations need to explore the possibility of using CSR as a business strategy, capable of yielding Return on Investment (ROI), and aligning it to the strategic vision of an entity; only then can serious communication be applied. Additionally, companies tend to communicate only what is important to the business – for instance, new products and services, investor related information – what can yield revenue. If in any way, the school of thought that ‘the business of business is business’ as postulated by Milton Friedman is upheld, CSR is unlikely ever to be considered as being core to a business nor its activities properly communicated if it remains considered as fundamentally an altruistic act.
Reputational Risk: As projected from the pillars of CSR, any CSR initiative must have either a social, environmental or economic impact. In reality however, the impact of these initiatives in Nigeria are hardly visible on the economy, the lives of the people or the environment.
For instance, although most of our survey respondents claim that their organisations targeted the education sector as major recipient of CSR projects, it is difficult to espy the positive impact of these spending on the overall education sector of the country. Similarly, even though disputes between prominent oil companies and their host communities cushioned the practice of CSR in Nigeria, environmental and economic disputes still persist between these companies and their communities; oil spills, environmental degradation, pollution, and protests for recompense have not seized. With persistent demand for impact by communities, organisations are prone to reputational risk and negative judgement when activities or spending are divulged to stakeholders. Sadly, some of those who communicate CSR activities are no longer taken seriously by the stakeholders due to the disparities between communicated details and reality.
Nonetheless, CSR communication will remain a hard pill for organisations to swallow unless the impact of such activities are felt on the society. Furthermore, this can only be achieved when organisations take CSR beyond paying lip service and embrace sincerity to stakeholders’ needs and concerns. On the other hand, communication through reports and online means, via websites, social media and other digital platforms will build trust and accountability needed to avoid or manage reputational risks. If organisations are sincere in communication, the risk of negative judgement as feedback on CSR communication will be managed.
Amongst other benefits, CSR communication and reporting:
• nurtures corporate image and ameliorates reputation (Schneider et.al., 2007);
• improves organisations’ relationship with shareholders and stakeholders – customers and employees included, and this drives more revenue for the business;
• helps identify future risks and opportunities; and
• increases business competitiveness and sustainability.
If CSR communication is capable of transforming both a business and the community, why do companies struggle with disclosure on CSR investments and activities?
Gomez, L. et.al (2013), The Importance of Corporate Social Responsibility Communication in the Age of Social Media: 16th International Public Relations Research Conference (2013); Pgs. 278-292
Moravcikova, K. et.al (2015), CSR Reporting as an Important Tool of CSR Communication: Procedia Economics and Finance, Vol 26, Pgs. 332-338