Why engage with TrustWorksBusiness trends indicate that non-technical risk - especially the socio-political, economic and environmental dynamics of host countries - is responsible for an ever-increasing percentage of the total business risk that is currently facing companies. Failure to account for the operational context, to design effective strategies to mitigate risks or engage constructively with stakeholders, can lead to operational delays, setbacks, security risks and opportunity costs, with significant short-, medium- and long-term financial implications. Companies increasingly understand that integrating non-technical risk and sustainability into their operations is not just an option: it's an imperative.
Key trendsThis imperative is compounded by four emerging realities:
- Business operations - especially in the extractives sector - are increasingly likely to take place in countries with unstable political and socio-economic dynamics.
- Businesses are increasingly expected to go beyond their core business mission, to contribute constructively to the social context of the host country.
- Many business leaders recognise that social acceptance is a core element of business success, and that behaving in a socially responsible manner is simply the right thing to do; indeed, company experience across the globe is proving that commercial interests in the medium and long-term are best served by aligning with, and supporting the interests of, communities where companies operate. Good intentions alone, however, might not be enough.
- Lastly, while there is no shortage of guidance for companies and communities on business operations, due diligence, social impact assessments, human rights frameworks, and environmental risk analyses, many companies lack staff with the time, knowledge and skills to tailor and implement such guidance. This is especially true in complex environments where high-pressure, day-to-day challenges can become all consuming, preventing the ability to step back, assess, and re-orient towards more productive and more conflict-sensitive business operations.
Working on the "How"We understand the inextricable linkage between the interests of companies and the needs of fragile and developing countries equally. Because the two are inseparable from a practical standpoint, we approach the complex challenges of our clients from the perspective of finding solutions which improve both in a mutually reinforcing fashion.
This business-peace/business-development nexus is highly affected by seven key ingredients companies can bring to developing countries: employment, revenue, infrastructure, economic growth, skills, political power and, increasingly, social investment. Our services focus on how our clients can best utilize these avenues of approach in translating a desire for improved operations and bottom line into a mutually constructive framework for action.
- First, employment is a social good only if labour markets are expanded in a conflict-sensitive manner. High levels of employment are likely to create conflict when minority groups are excluded or if the working conditions fuel latent resentment. Work contract terms such as wages, benefits, working conditions and bonuses can easily be perceived in zero-sum terms and create the environment for destructive competition if not effectively managed. We help your organization expand its markets in a conflict-sensitive manner, ensuring you do not become another party to or intensify the conflict or tensions.
- Second, increased tax revenue provides governments with the resources to be able to provide and improve basic service delivery, such as schools, hospitals and sanitation. However, people in Africa's most resource-rich countries such as Angola, Nigeria, Equatorial Guinea and the Democratic Republic of Congo (DRC), for example, are often the poorest of the poor. The failure to generate transparent and accountable processes contributes to greater income disparities, fuels further conflict - and ultimately constrains bottom line growth. We work with your teams to communicate effectively and transparently, thereby avoiding the negative optics of being associated with corrupt practices.
- Third,basic infrastructure, such as roads, bridges, electricity grids, harbours and supplies are vital for the growth of a country and for the growth of business - but are often the most politically sensitive of projects. Overcoming business constraints through the provision of essential infrastructure is a vital part of a growing economy, but it requires careful planning which takes into consideration the conflict-dynamics, cultural sensitivities as well as the long-term environmental sustainability of such projects. By ensuring your organization expands in line with social and economic realities, we ensure it maintains its license to operate amongst communities.
- Fourth, economic growth contributes to long-term economic, social and political stability when its benefits are felt across industrial sectors and segments of the population. Disproportionate growth can foment an unstable operating environment and introduce reputational and political risk. We work with your organization to grow a perception and reputation of being socially and environmentally responsible by engendering an internal culture that genuinely reflects these principles.
- Fifth, a skilled workforce is essential for a growing economy, but technical skills must be supplemented by communication, conflict resolution and negotiation skills if workforces in conflict contexts are to engage constructively in the task at hand. The link between internal divisions and the ability to achieve external results is too often overlooked: where trust is lacking internally to any private sector team, it will be almost impossible to build trust externally with stakeholders - private sector and communities alike. We give your staff the skills to effectively communicate internally and externally, ensuring your organisation achieves alignment between goals and results.
- Sixth, the issue of the extent to which private sector actors exert political power and influence over governmental actors is generally considered a taboo and controversial topic; it is, however, often a significant reality. Private sector actors may deliberately or inadvertently upset political balances, or even impact upon the dynamics of armed or extremist groups. It is important to recognise and account for this reality in order to avoid contributing to violent political economies, and to foster processes which condition the nature and extent of the political power and influence of businesses. We advise your organization on employing political power in the right way and at the right time, ensuring reputational risk is minimalized and bottom-line results are maximized.
- Seventh, social investment - often referred to as Corporate Social Responsibility (CSR) - is one way many private sector actors seek to ensure the benefits and costs associated with their engagements are fairly distributed. The combination of providing support to communities and purchasing the 'license to operate' has mixed results, however, when not implemented in a conflict-sensitive manner. On the one hand, providing direct benefits to communities can undermine essential state-building processes and create an unintended social dependency on economic actors. On the other, expectations can be mismanaged, fuelling disappointment, resentment and, often, violent conflict. We work with you to ensure social investment is undertaken in a strategic manner, with maximum environmental, reputational and bottom-line impact.