How Might Companies Change their Approach to Community Investment?
Published: 11 April 2018 03:53
A classic Latin American story repeats itself from project to project: Rural people play the role of the Victim. Outsiders, like mining companies, fall into the role of Villain. Discussions polarize. Local people feel powerless. They see the Villain as a threat to land and culture, a threat to power. Local organizations emerge as defenders of the community. The community rises against the Villain to become the Hero. The Hero defends the community against the Villain. Sometimes, the person or people in the Hero Role, take action to protect the community leader’s power (not just or, even instead of, the community).
The media hypes this “black hat” vs. “white hat” conflict, building on the dramatic tension—and even though there were forces trying to stop them, the poor community stood up to the Big Corporation because there was a lot at stake… Against this backdrop conflict rises quickly. Frequently, rural people do not trust the legal system. They only get power through protest—negotiation through conflict and confrontation. Protests can quickly turn violent. The Villain, then, in an attempt to protect its investment and advance its project, agrees to some level of “compromise” with the Hero. A transactional and tense relationship ensues. One side demanding more money (or physical examples of money such as roads, water treatment systems, schools, and clinics) and the other side spending as little as possible.
How might we change this narrative? What if, instead of an Us versus Them dynamic, we designed an all-inclusive Us approach? To achieve this shift, build robust projects, and make more money, means defining company objectives in the context of local, regional, and global social-and-economic development. Simultaneously, this new narrative means turning old-school externalities into opportunities for value creation; for example, move environmental issues from an operational cost to a profit driver.
If miners view community relations as an operational cost and approach it through philanthropic donations thinly disguised as “social investments” it will always be a drag on the bottom line. Predictably, traditional approaches to Corporate Social Responsibility (CSR) and philanthropy lead to trade-offs and added costs. Instead of Sustainability—and a thriving, prosperous enterprise—companies spend money on disconnected, symbolic initiatives—building a schoolhouse or a clinic—at the fringes of their core activities.
In Latin America, outside-in thinking, turns business activity into a powerful force for scaling-up Sustainable Development. This transforms mining companies from Villain to Partner. Building alliances, at no additional cost to the mining company, pairs corporate goals with global megatrends in ways that create multiple benefits with lasting solutions. Companies that view Sustainability as profitability move it from “Bolt On” initiatives to “Built In” practices. This change leads to the secured trust and loyalty of key stakeholders (including shareholders, employees, and local communities). Positive relationships with key stakeholders translates into long-term financial viability.
Built-In Sustainability (including community relations) leverages global challenges for enduring profit and sustained growth. Social and Environmental thinking drive innovation, create value, and build competitive advantage. This powerful approach to mining in Latin American reduces waste, minimizes risks, and optimizes efficiencies. This, in turn, protects investments and maximizes profitability. Done well, Embedded Sustainability also fosters loyalty both within the company and along its supply chains and areas of influence. As a result, mining companies increase both community value and long- term shareholder value. As the Victim-Villain-Hero narrative repeats itself across the region, smart companies transform community relations and, more broadly, Sustainability, from an operational cost or moral obligation, into profitable business.
ABOUT THE AUTHOR
Dr. Wayne E. Mayer is a Strategic Sustainability and Corporate Social Responsibility Consultant skilled at leading companies to innovate and profit from social and environmental thinking. He helps organizations integrate health, safety, environmental, and social value into core business. Dr. Mayer offers over 25 years of international environmental management, social responsibility, and sustainable development experience. He resides in Denver, Colorado, provides high-level advisory services to multi-national corporations, and teaches for the Duke University Environmental Leadership Program. Dr. Mayer’s proactive whole-systems approach to business mitigates risks, engages stakeholders, cuts costs, and improves efficiencies, revenues, and brand equity.
- 5 minutes with Frank Holmes, CEO and CIO at U.S. Global Investors
- CEO of Minsur talks about latest achievements and commitment to sustainability
- Colombian Mining sector: Interview with Lobo Tiggre on challenges and opportunities for the industry
- Recently rebranded Plateau Energy Metals turns its focus to lithium as well as uranium
- Nexa Resources CFO: “Brazilian economy has been a positive story, though it’s not homogenous”
13 Dec 2017