Sustainability consultancy presents South Africa's CSI investment levels

27 February 2019 2 min. read
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Research from Cape-Town-based management consulting firm Trialogue has revealed that South Africa is among the countries with the lowest level of corporate social investment (CSI), despite having registered and increase in investment in social campaigns over the last two years.

Since 2017, investment in CSI-related projects has grown by as much as 2.5%, which is generally attributed to the increase in the number of projects and consequent requirements for investment. At the end of last year, CSI spending in South Africa stood as high as R9.7 billion.

However, the report’s findings were compiled in comparison with its global partner firm by the name of CECP: The CEO Force for Good, and the CSI expenditure of South African firms emerged as relatively low when compared to the investment levels in other countries across the globe.

Sustainability consultancy presents South Africa's CSI investment levels

CSI expenditure in South Africa is determined based on organisational revenues that remain after tax is deducted, which can be related to the relative decline in CSI investment amongst South African firms. The economy has been struggling in recent years, and businesses across sectors have struggled with maintaining stable revenues.

As a result, the 1% of post-tax revenue that is usually deployed towards CSi activity has been on the decline in tandem with the overall revenues. The 1% benchmark is determined by B-BBEE considerations, given that it is the minimum amount required to draw the highest benefit from the scheme.

In terms of deployment of funds, Trialogue found that education drew the highest financing from South African firms. South Africa and the extended region of Africa are home to the youngest populations in the world and education is crucial to ensure that this youth can contribute to economic growth.

A number of investors from the private sector have recognised the potential for private education in the country, which has driven up the level of investment in the sector. Other sectors that drew a substantial portion of investment include healthcare and community development.