• Ethical finance

Ethical finance

Many social investment programmes fail to generate the goodwill that companies hope for and instead become a burden beyond the originally intended period. This guidance document addresses the question of how to create successful and sustainable community investments and how to measure their success.

It focuses mostly on local and regional social investment approaches used in upstream oil and gas activities. The document is based on actual company practices and processes ‘on the ground’ at the project/asset level, the details of which were obtained through interviews with 33 SI experts working at a group or subsidiary level in 11 companies.

The first section of the document examines the current state of social investment (SI) in the sector.. Based on the interview data, it identifies the following emerging trends in social investment:

• from bricks and mortar to soft skills and livelihood programmes.
• from a focus on symptoms to addressing root causes.
• from do-it-yourself to using international partners to using local partners.
• from ‘we know what is good for you’ to ‘let us discuss’.
• an increased focus on boosting the capacities of local authorities.

Against this background of emerging trends, Section 2 offers a framework for the design of SI programmes. The seven steps to consider before starting any SI programmes are:

• start planning early
• understand the context
• determine SI objectives and links to the business case
• determine the operating principles that provide the overarching ‘lens’ through which SI decisions will be reviewed
• link SI strategy to SI objectives
• align SI priorities with the oil and gas project development timeline
• obtain early buy-in from the government and local communities

The document states that in order to avoid SI programmes having negative impacts, either for local communities or for the company itself, programme design needs to avoid inter-group jealousy and conflict and, instead, further group cohesion through taking an inclusive approach. In addition, programmes need to be sustainable.

The document concludes with a checklist that could be used as a tool to assess or audit the design of the SI approach used.

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