Capitalism and Corporate Social Responsibility

Capitalism is often viewed as a predatory system. This economic model, grounded in private ownership of resources and operation in a free market for profit, can be seen as a monster that feeds on the very people who work within it. While it may appear that the consumer is at the center of corporate decision-making, the reality is that higher profit margins are the primary focus, often at the expense of the environment and the quality of human life.

The Role of Corporate Social Responsibility (CSR)

An upheaval of the entire capitalist system might be an ideal solution, but it is also highly unrealistic. Given our current reality, the next best alternative is corporate social responsibility (CSR). According to Wikipedia, CSR is the ethical principle that a company should be accountable for how its actions affect society. This means that organizations should go beyond the minimum legal requirements and adopt policies that actively improve the communities in which they operate.

Safaricom: A Case Study in CSR

Safaricom, recently awarded Brand of the Year, serves as an excellent example of effective CSR. The company has been releasing an annual sustainability report, reflecting their CEO’s mantra, “Know, Show, and Grow.” This approach signifies a commitment to continuous improvement. The report, which highlights both the positive and negative aspects of their activities, is aligned with global sustainability goals.

A Harvard Business Review article emphasizes that the main goal of CSR is to align a company’s social and environmental activities with its business purpose and values. This approach acknowledges that businesses have a duty to their stakeholders to make a profit, but it does not require strict adherence to traditional business practices. Instead, companies can self-regulate and tailor their business models to support ecological or social improvement goals. Safaricom’s dedication to CSR can be analyzed through three main avenues:

Philanthropy

Philanthropy involves charitable giving to causes that align with a company’s values. Safaricom, through the Safaricom Foundation, demonstrates this commitment with initiatives such as the M-Pesa Foundation Academy, which provides full scholarships to students from disadvantaged backgrounds. Additionally, Safaricom partners with Starehe Girls High School to sponsor students and supports other causes, like the annual Heart Run. More details about Safaricom Foundation’s initiatives can be found here.

Operational Effectiveness

Operational effectiveness focuses on streamlining activities along a corporation’s value chain. Safaricom is a signatory to the United Nations Global Compact, which encourages companies to align their operations with universal principles on human rights, labor, the environment, and anti-corruption. Safaricom also insists that its business partners adhere to these principles. The company’s report revealed a nearly equal gender balance in their workforce (51% men to 49% women) and a commitment to further improving inclusivity and diversity. Despite the balance, there are more men in senior management positions, which Safaricom aims to address. Furthermore, Safaricom made strides in reducing energy consumption by making structural changes to their grid sites and addressing fraudulent activities within the organization.

Transformed Business Models

Transformed business models involve creating new forms of business that contribute to both revenue and social goals. Safaricom excels in this area, with numerous partnerships and investments in socially conscious business ideas. Examples include the WEEE Centre, which recycles e-waste; M-Tiba, which enables people to save money for healthcare; Eneza Education, which provides access to revision materials; and Ocean Sole, which cleans beaches and creates art from waste. These initiatives highlight Safaricom’s commitment to social responsibility and innovation.

The Benefits of CSR

Investing in CSR offers significant benefits, especially in today’s age of conscious consumers. People are increasingly aware of global issues such as climate change and modern slavery, and they are more likely to support brands that demonstrate social responsibility. A strong CSR strategy can enhance a company’s brand image, ensuring a dedicated workforce and fostering long-term revenue through brand loyalty.

Restructuring a company to prioritize CSR is challenging and requires a CEO committed to leaving a lasting legacy. As former Safaricom CEO Bob Collymore insisted, “Purpose, People, then Profit. If we let our purpose of transforming lives guide our decision-making and put our people first, we know that profit will follow.”