South Africa

Details

  • Type: Press release
  • Date: 2014/07/01

Companies invest billions in social programmes but impact is uncertain 

Together, 100 of the world’s largest companies reported social investments valued at over US$12.2 billion in 2013, according to new research published by KPMG International. Yet few companies are reporting the impact these investments are actually having on the people they are intended to help.

These findings are contained in Unlocking the value of social investment, the latest edition of KPMG’s Sustainable Insight research series.

 

Speaking to sustainability leaders across various sectors at a KPMG in South Africa event themed ‘Using Social Investment as a Lever for Value Creation’, Lord Michael Hastings, KPMG’s Global Head of Corporate Citizenship referenced the report as he shared his global experience in social development and provided insight on successful models for corporate citizenship.

 

“When faced with the dilemma of business priorities versus social investment priorities, my approach as KPMG’s Global Head of Citizenship is that we should be investing, as the reputational risks and, in certain instances financial risk, through fines, could be more damaging to the business in the long run. Businesses generally exist to make things better and have a responsibility step in to help where needed,” said Lord Hastings.

 

The KPMG study reviewed corporate reports issued between 2012 and 2013 by the 10 largest global companies in each of 10 industry sectors. It found these 100 companies and their associated corporate foundations invested, on average, the equivalent of 2.5 percent of their pre-tax profits in programmes to tackle social and environmental challenges such as access to education, healthcare and disaster relief.

 

However, only 20 percent of these companies reported any quantified metrics for the impact of the programmes they fund and only 32 percent of companies reported a detailed investment strategy. 

 

“Companies are investing huge amounts into social programmes,” said Neil Morris, Partner, Climate Change and Sustainability of KPMG in South Africa, who led the KPMG study. “The US$12.2 billion invested by these 100 companies alone is equal to the entire annual foreign development aid budget of a country like France.

 

“Measuring the impact of these investments on the ground can be challenging, but it is crucial to understand how effective these programmes are, how they can be improved and where the money is best spent to deliver the biggest benefits. A clear strategy for social investment is essential to this process.”

 


 

About the survey

 

Unlocking the value of social investment is intended to help corporate responsibility managers and others involved in designing and delivering social investments to overcome some of the challenges to measuring and reporting on social programmes.

 

It contains practical advice, case studies and a framework for better measurement and reporting of social investments and programmes.

 

Share this

Share this

Contact

Contact
Neil Morris
Director, Climate Change and Sustainability
Tel: +27 (0)11 647 5252 neil.morris@kpmg.co.za