Taking a strategic view

Taking a strategic view

Mines are incredibly complex operations spread across wide geographical areas, so there is a temptation to allocate social investment into broad categories such as health and safety, social welfare, education and sustainability. Yet without a detailed business plan, this money is at risk of disappearing into a black hole marked “charitable contributions.”

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Program choices can also be influenced by administrators eager to score political points. So-called ‘ribbon cutting’ events such as the opening of schools, hospitals or roads can make a big impression on voters, but do not always bring the best return on capital. A less glamorous, cheaper option like teacher training or safe sex education could potentially have a far greater positive effect for a smaller outlay, although they may have a less tangible effect on the company’s reputation in the short term. Those responsible for allocating social investment budgets therefore need to exert a stronger influence over the organizations involved in prioritizing programs, by engaging earlier with local economic development forums and other groups, and resisting demands for vanity projects. This closer working relationship will also ensure that authorities are aware of the value being added by the social investments of the business, without them having to create awareness around this through active PR activities.

"Companies should aim for a small number of programs with measurable social impact."

Responsibility for choosing programs often rests in the hands of operational managers, who may be under pressure from regulators and stakeholders to deliver more immediate results, such as minimizing stoppages. Valuable as these initiatives may be, they should be balanced with projects that contribute to the longer-term social license to operate.

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