An Analysis of CSR Strategy & Performance
Essay 1 By: S. BLIDI ELLIOTT Index No.: EMBA 10110042 Course: Ethics, Social Responsibility and Governance Course No.: EMBA 663 Lecturer: Dr. Judy N. Muthuri Date: September 28, 2012 Word Count: 5,709
This essay is the first of a two-part series critically examining the corporate social responsibility (CSR) strategy and performance of AngloGold Ashanti (AGA). This first essay analyses the company’s CSR strategy and activities against the yard sticks provided by the Ghana Business Code and the Global Reporting Initiative (GRI). In analyzing AGA’s strategy, we explore the likely motivating factors driving the company’s CSR activities and how these drivers inform AngloGold’s responsiveness to environmental, social and other stakeholder issues. In evaluating AGA’s CSR reporting and performance, we present a background of the company followed by an overview of the company’s CSR strategy and analysis of whether that strategy conforms to accepted standards. This essay is written in partial fulfillment of the course requirements of the Ethics, Social Responsibility and Governance module (EMBA 663) of the Executive Masters in Business Administration program of the Ghana Institute of Management and Public Administration.
ANGLOGOLD ASHANTI – AN OVERVIEW AngloGold Ashanti is a multinational corporation headquartered in South Africa with various mining operations in ten countries spread across Africa, Asia, and the Americas. The company’s primary activity is gold mining, though silver and uranium, among other by products, are produced in the process of extracting the gold from the ore bodies. In 2011, AngloGold reported sales of $6.6 billion from 4.33 million ounces of gold produced with a workforce of close to 70,000 persons across four continents. AGA is a truly global company with market capitalization of $16.2 billion and listings on stock exchanges in AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 2
Johannesburg, Accra, London, Sidney and New York. The company is majority owned by shareholders in the USA (47.9%) and South Africa (27.9%), with the rest of the shares distributed throughout the world, including a 1.7% shareholding by the Government of Ghana (AGA Sustainability Report, 2011: 5-10). AngloGold produces dore (unrefined gold bars) at its worldwide operations for sale mainly to gold refineries which sell on to bullion banks and jewelers. Like others in the industry, AGA has benefitted from recent increasing demand for gold as a store of value. This demand has been driven over the last few years by the worldwide economic downturn and banking crisis which have made investors wary of unstable currency and equity markets. This essay focuses on AGA’s operations in Ghana, where the company operates two mining properties in the west of the country at Iduapriem and Obuasi. These operations account for 11.8% of the company’s global production and revenues (AGA Sustainability Report, 2011: 22) Located in the Ashanti and Western Regions of Ghana, Iduapriem and Obuasi were the main targets of the merger between AngloGold Limited of South Africa and Ashanti Goldfields Limited of Ghana to form the current company, AngloGold Ashanti, in 2004.
SUSTAINABILITY STRATEGY AngloGold Ashanti provides extensive, publicly available information about what the company calls its “sustainability” strategy and programs. The company’s “Sustainability Report 2011 – Sustainable Gold” (www.aga-reports.com/11/sustainability-report/home) is one part of AGA’s “Integrated Report 2011 – Pure Gold” which also includes the company’s Annual Financial Statements and a Mineral Resources and Ore Reserve Report. The company says its Integrated Report is in compliance with South Africa’s King Code on Corporate AngloGold Ashanti: Analysis of CSR Strategy & Performance Page 3
Governance 2009 (http://african.ipapercms.dk/IOD/KINGIII/kingiiicode/) which mandates companies...