/ 12 August 2022

People, Planet and Prosperity

Php P1 River Waste
[Photo: Jamaine Krige]

Floods, fires, droughts and heatwaves dominate news headlines, while industries have been brought to a standstill by a pandemic and the pandemonium that followed. Natural disasters are affecting local and global supply chains and the window for addressing the global climate crisis is closing fast. Drastic action is needed — tomorrow may be too late.

If the world is to mitigate the catastrophic impact of climate change, the international community must prioritise the global objectives as outlined by the United Nations and their local sustainable development goals (SDG) in place to improve ecosystems and planetary health, reduce pollution, waste and carbon emissions and increase food and water security. To succeed in these objectives there is a need to transition from policy to action, with a specific focus on governance, finance and technology, as well as knowledge and capacity building to promote environmental protection and preservation.

In these endeavours, business must lead the way. The responsibility is on every individual, institution and corporation to do their part to ensure a viable and sustainable future. For this reason, sustainability must be more than just a buzzword — it must be a business goal, a corporate value and an integral part of business goals for the future.

People, planet and profits can no longer be separated and the businesses that will thrive will be those enterprises that realise and work towards this “triple bottom line”, committing to measuring their social and environmental impact — in addition to their financial performance — rather than solely focusing on generating profit, or the standard or traditional “bottom line.”

South Africa’s energy crisis has left the country and its people in the dark, and businesses and their employees are increasing. lt is impacted by social unrest and political shortcomings. Corporate South Africa knows that waiting for state-implemented solutions is not viable — business and industry leaders must step up to become societal leaders and make the changes that the nation needs for a sustainable and resilient future.

The Triple Bottom Line
Harvard Business School (HBS) describes CSR or “the third bottom line” as the ultimate way for companies and business leaders to understand and engage with ethical corporate citizenry, good governance and sustainable business strategy.
This triple bottom line is focused on three pillars — profit, people and the planet. Business success today depends on a company’s performance in these three sectors.
The profit pillar is self-explanatory in the corporate world — businesses exist to make money and generate a profit for its shareholders. In the past, this might have been enough, but business leaders know that profit cannot exist in a vacuum and no business will thrive while the community and environment it operates in are suffering.

The next pillar is people, as defined by a company’s commitment to the community it finds itself in and its subsequent societal impact. The needs of stakeholders, not just shareholders, are not of paramount importance for business health and corporate success. This pillar — people — can be cultivated, either internally through investment into employees, or externally through outreach programmes and community engagement.

The third pillar and final bottom line is the planet, without which there would be no people and there would be no profit. Historically, big business has been one of the worst perpetrators of environmental crimes and one of the worst contributors to the climate crisis. However, the opportunity exists for them to restore the injustices of the past, drive positive change and position themselves on the right side of history.
The South African government recognises the need for increased awareness to remind citizens of the interdependence that exists among humans, other species and the planet they all inhabit.

“Climate change represents the biggest challenge to the future of humanity and the life-support systems that make our world habitable. In order to achieve a just balance among the economic, social and environmental needs of present and future generations, it is necessary to promote harmony with nature and Earth.”

Climate Change, Energy and CSR
Climate change is a shared societal burden and climate action is, therefore, a shared responsibility. Every citizen must make the fight for a better world and a brighter future a priority. Part of this is demanding that companies and institutions honour their commitment to the triple bottom line where people, planet and profits intersect to ensure prosperity for all. Corporate social responsibility is one way for companies to not just show their commitment to people and planet, but to live it too.

As of 2021, South Africa has been identified as the twelfth-biggest source of greenhouse gases in the world. This accounts for roughly half of the total greenhouse gas emissions from Africa. Climate change poses a significant risk to life and livelihoods and affects day-to-day business functions. For this reason, it is imperative that businesses are prepared to react and act proactively to prevent the situation from worsening.

This state of affairs has also placed pressure on CEOs and other business leaders to take a stand. Customers are no longer satisfied with companies who remain silent — and inactive — when it matters the most. Consumers are driving the conversation and driving the agenda and it is up to businesses to heed this call and remain relevant, or risk getting left behind as the world moves into the future.

The issue of energy, energy efficiency and sustainable and renewable energy solutions is not new to South Africa, and the end to the country’s power woes is not yet in sight. In October, Eskom announced that its generation capacity would remain constrained until at least the end of August — a date that is fast approaching while solutions remain elusive.

This crisis of power, coupled with the issues of climate change has pushed organisations to investigate and invest in energy efficiency, sustainability and environment-friendly solutions. For companies who want to take the step towards renewable and eco-energy solutions, the Western Cape government suggests conducting an energy audit that will help frame the challenges and highlight the steps that need to be taken to start optimising their energy use and become energy efficient.

It is also important to note that issues of climate change and sustainability have, and will continue to have, severe and lasting impacts on economic and social development. Those who are among the most vulnerable and marginalised experience the deepest consequences.

Women are also increasingly being recognised as more vulnerable to the impact of climate change than men. Women constitute the majority of the world’s poor and are more dependent on natural resources most threatened by climate change. The climate crisis has amplified existing inequalities and puts the lives and livelihoods of the world’s most vulnerable populations at risk. Despite being more dependent on these natural resources, these populations have less access and often bear a disproportionate responsibility for securing food, water and fuel.

As custodians of communities and of the natural environment, business has a role to play to promote social well-being and environmental health. Business leaders must step into their position of power to empower people, protect the planet and in doing so, drive profits to ensure that no one is left behind as the world accelerates into the future.

Corporate Social Responsibility

It’s not enough to do good business. Today’s companies must also do good in order to maintain legitimacy, meet societal expectations and foster healthy client and stakeholder relationships. This is why corporate social responsibility (CSR) increasingly takes centre stage in conversations about corporate excellence, business leadership and the future of work.

Employees increasingly expect their leaders to do good in the communities where they operate. Photo: Jamaine Krige

When looking at CSR in the context of higher education and training colleges in Gauteng, Andries Lebakeng found that institutions recognise that they “have to play a major role in developing entrepreneurs in their communities, responding to the needs of industries and improving the standards of living within communities” while “forcing organisations to involve stakeholders in their decision-making”.

In his research, Lebakeng describes CSR as “the commitment of organisations to act in the interest of both business and sustainable economic development based on ethical values, compliance with legal requirements and respect for engagement with people, communities and the environment.” He adds that CRS does not stop with the company’s employees and investors, but extends to how a company responds to, and continuously interacts with, its vital stakeholders.

While it is justifiable for a company to make a profit, says Lebakeng, business should do more than that by being philanthropic, taking an active interest in the communities it operates in and showing a commitment and responsibility to the natural and built environment.

“The findings from the study indicate that CSR is critical for the survival of colleges; CSR has many benefits and is the only way to proceed if they want to stay in business,” writes Lebakeng, adding that companies and institutions must recognise that successful CSR strategies benefit not only the stakeholders, but also the inner workings of the company itself.

How well a business does in cultivating these values and engaging with its stakeholders can influence the social and financial support it receives as well as the perceived corporate culture and buy-in from employees. Business leaders and captains of industry can no longer deny that corporate social responsibility is vital for business sustainability and operational longevity — the future demands heart and soul, not just brains and brawn.

Lived Values for Employee Satisfaction
Internally, CSR initiatives influence company culture through its employees. According to a survey by Brunswick, employees increasingly expect their leaders to take a value-driven moral stand and make their voices heard when it comes to social and societal issues. According to the survey, employees believe that it is vital for CEOs to not only communicate but live the values of the company.

“As a group, respondents ranked communicating values higher even than company strategy or profitability,” the study found.

Furthermore, it was discovered that employees value transparency from their leaders to the extent that it is likely to influence whether they remain with a company or not. More than 70% of respondents stated that they consider a company’s stance on societal issues when deciding on whether to stay or seek employment elsewhere. A business’ stance on social responsibility and its community-engagement strategy play an integral role in employee well-being and job satisfaction.

Companies Don’t Operate in a Vacuum
Modern companies have a broader responsibility and no longer just answer to investors. Other stakeholder relationships are as important for operational success. These include customers and clients, who are increasingly value-driven in where they take their business, as well as the communities that these companies operate within. An active and authentic CSR strategy that communicates the company values can make or break a business.

According to Just Capital’s 2020 survey on stakeholder capitalism, around 92% of people expect large corporations to promote an economy that serves all stakeholders as well as to address societal issues that are prevalent in the areas in which they operate.

Customers and clients also take an organisation’s history and stance on prevalent social issues into account when they choose their products or services. The study found that almost 40% of consumers are, at any given time, boycotting at least one company on the basis of politics and values.

A deeper look at this decision reveals that 23% of boycotting consumers have made this decision based on accusations of racism from a company or its employees, with the diversity of a company’s executives also playing a role in whether they choose to do business with a company or not.

CSR and value-driven community engagement is therefore not just important for a company’s bottom line, but also for its future sustainability and corporate survival. Social responsibility is a vehicle for business success and growth.

When it comes to social and societal issues, it cannot be business as usual. Companies and their executives are expected to have a voice — and to make that voice heard when it matters most.

A Sustainability Roadmap

Today’s consumers have choices, and a company’s social footprint and lived values increasingly influence where they take their business and which brands they continue to support. Corporate social responsibility (CSR) is about much more than just corporate or legislative compliance. It is a vital tool to empower communities, uplift societies and promote the environment, all while driving consumer engagement and brand loyalty.

Here are some of the trends that companies should consider when planning how they can take CSR to the next level:

Increased Transparency
Consumers want to know what is happening behind the scenes. According to a report from the Institute of Supply Chain Management (IOSCM), more buyers are demanding that businesses make their internal dealings open to the public.
“Consumers want to know more about the inside deals that businesses have done in the past,” the study found.

This increase in the demand for transparency comes as a response to heavy regulatory oversight and to consumers wanting to know who is actually benefiting when they exercise their spending power. This is especially true in South Africa where businesses have been implicated in widespread corruption and even state capture.

Consumers are no longer satisfied with shady business dealings and hidden agendas. They demand to know more about matters that would previously not have been in the public eye. Just as non-profit organisations are subject to rigorous impact reporting, financial transparency and accountability, experts agree that increased transparency is a CSR trend that will only grow in the coming years.

Green Technology
The climate crisis is high on the agenda and it is increasingly clear that this cannot be mitigated without the involvement of all stakeholders. The green revolution is taking the business world by storm as more companies realise that they have a responsibility towards the planet and not just towards the people who live on it.

Environmental sustainability is intrinsically linked to business sustainability.
Green technologies are technologies implemented with the aim of mitigating climate change and reducing the harmful and degrading effects on the environment.

In 2021, there was around $755 billion invested into green technologies globally. The use of environment-friendly technologies is widespread and growing across the board in almost every industry and sector — from alternative fabrics for clothing manufacturing to energy-efficient construction and building practices; from large-scale production processes to office recycling plans.

Employee Volunteer Programmes
Companies have found a way to combine social responsibility, community engagement and team building by implementing employee volunteer programmes. This is according to a blog published by Everfi, a company that promotes Impact-as-a-Service. The company says that volunteer programmes can have “a lasting and positive effect on our society and on our businesses”. Activities can include tutoring, mentoring, training classes, free services or physical outreaches like street clean-ups or building renovations to schools or other community centres.

Whether in-person or remote, these engagement initiatives are powerful team-building exercises and go a long way to encourage a company culture of giving and sharing It increases morale and job satisfaction among employees. It also stimulates inter-team and inter-departmental collaboration.

Greening Africa

Climate change is one of the biggest threats that humanity has faced and the impact of the climate crisis on every aspect of living has forced governments and businesses to seriously reevaluate how things are done. With the survival of both people and planet in the balance, it cannot be business as usual.

Renew, recycle and reuse relocates waste from the end of the supply chain to the beginning. Photo: Jamaine Krige

During a Cloud Debate hosted by the University of Johannesburg, experts explained that today’s circular economy is a space of creation and innovation as consumers and corporations shift from a linear “take-make-waste” model of operating towards a system that aims to eliminate pollution and waste and provide room for natural systems to regenerate.

This circular, green-focused economy also offers opportunities to bolster employment and create a more resilient economic environment, while safeguarding Africa and her residents and resources for future generations.

Eliminating Waste for Planet Health
Dr Naudè Malan is a senior lecturer in Development Studies at the University of Johannesburg. During the debate, which dealt with how recycling and reforestation are being advanced in Africa with fourth industrial revolution (4IR) technologies, he described the linear economic model as a system where consumers buy products from a distributor and after the product or service is used, it is discarded, usually with some form of waste.

“There is waste in manufacturing, there is waste in retailing and distribution, and there is waste in and after use,” he explained. “Often the product is designed to be obsolete at the end of its lifetime, and this in itself is incredibly wasteful.”

This waste produced in a linear economy contributes to pollution and adds to the worsening state of the planet, in serious and often unnecessary ways.

“A laptop has 300g of gold in it, and when it reaches the end of its life we often just discard it without a second thought,” said Malan, adding this is a problem, but also an opportunity.

“There are huge economic opportunities in this context because you can design a product so that it doesn’t incorporate as much waste in the manufacturing, retail and use systems. And you can design the product so that it can be refurbished, reused, reconditioned or repurposed.”

Full Circle: Renew, Recycle and Reuse
According to the Ellen MacArthur Foundation, a circular economy is the only way forward as it can address and curb environmental issues before they even take place, while building a more resilient economic landscape.

“We must build an economy that eliminates waste and pollution, keeps products and materials in use, and regenerates natural systems. The circular economy can help address climate change by reducing emissions from industry, land use and agriculture.”

According to the United Nations Industrial Development Organisation’s (UNIDO) Circular Economy paper, this type of economy “works by extending product lifespan through improved design and servicing, and relocating the waste from the end of the supply chain to the beginning — in effect, using resources more efficiently by using them over and over, not only once”.

According to UNIDO, this creates new and exciting opportunities for innovators and entrepreneurs who are tasked with designing products for “durability, reuse and recyclability”.

Opportunities for a Better Africa
The concept of a circular economy creates the space for many entrepreneurs in Africa to be innovative and feed the economy while still reducing waste and helping the planet. One such example is K1-recycling, a business run by Tshepo Mazibuko that processes waste and sells it back to manufacturers in the form of plastic pellets. These pellets can then be used to create new products.

Speaking at the UJ Cloud Debate, Mazibuko explained how his business works.
“We sell our final product to the manufacturers of products like chairs and blades, so we are actually producing raw material for their final product while minimising waste.”

According to Malan, this is the future of manufacturing and business in South Africa, on the continent and globally.

“As we recover the waste in manufacturing processes, instead of just discarding it and losing that value, we can create opportunities,” he explained. “Not just recycling, but recycling and reprocessing, remanufacturing and more — this is really the frontier of business.”

While the concept of a circular economy is sound, successful implementation is needed for the effects and benefits to be seen. This is why there is an increased push for governments and businesses to adopt strategies and policies that enable circular economies and promote a recycling strategy.

Experts agree that a future based on a thriving zero-emissions economy is not only possible, but vital to secure a better future for Africa and the world.

Lighting the Way to a Brighter Future

In South Africa, electricity is a scarce resource and keeping the lights on is an increasingly difficult task, literally and figuratively! Unscheduled power outages and rolling blackouts like those implemented during load-shedding can be the nail in the coffin for many businesses, especially small and medium enterprises that are already struggling to stay afloat. With unreliability from South Africa’s power utility Eskom, rising pressures to mitigate climate change, skyrocketing energy prices and a more competitive business environment, bigger companies who can afford to make the shift have been left with little choice but to invest in renewable, sustainable, efficient and independent energy technologies that do not rely on the national power grid.

Load-shedding has been hard on many businesses, especially small and medium enterprises that are already struggling to stay afloat.

For smaller businesses though, this is not always possible, despite the obvious benefits like reduced running costs, lowers carbon emissions, and increased customer loyalty to brands that show a level of environmental awareness.

Energy efficiency is a modern business goal, and should be treated as such by companies that want to sustain and grow operations.

Cutting Costs
Many business owners shy away from installing new energy-efficient systems due to the large upfront investment needed. Despite this, experts say that energy efficiency should not start and end with installing expensive technologies. Small changes can make a big difference. One example is to send out a memo or remind employees during a weekly meeting to switch off the office lights when they leave or turn off computers when they’re not in use. This can be the first step towards changing attitudes and fostering an office culture of energy efficiency and sustainability.

Energy efficiency can also help businesses save money and cut running costs. In the US, it was found that high-performing buildings, or buildings that deliver a higher level of energy efficiency, save $0.60 per square foot on operations and maintenance expenses per year, and $0.53 per square foot on utility expenses annually.

Saving the Planet
South Africa is the fourteenth largest emitter of greenhouse gases globally, and South African businesses must incorporate energy efficiency into their operational goals in order to promote sustainability and protect the planet for future generations. Studies have found that widespread use of efficient appliances, electronics, equipment, and lighting, along with better insulation and other weatherisation practices, could cut around 550 million metric tons of carbon pollution a year by 2050.

Conserving energy also helps protect the environment and its natural resources from being unnecessarily pillaged. Cutting back on energy helps conserve limited natural resources that would otherwise be used to power the power plants, while a lower demand for energy also results in lower demand for fossil fuels.

By becoming more energy efficient, businesses can help mitigate the damage that mining for fossil fuels does to ecosystems, fauna and flora, and its impact on climate patterns and depletion of natural resources.

Corporate Values for Brand Reputation
Another great benefit that being energy-efficient can bring to businesses is through increased brand reputation and consumer loyalty. Climate change and environmental issues are a hot topic of conversation globally, and consumers are increasingly expecting the companies they interact with to act as custodians of the planet and conduct their operations in a more sustainable and eco-friendly manner.

A recent study by Unilever found that a third of consumers choose their brands based on their social and environmental impact. “More than one in five (21 percent) of the people surveyed said they would actively choose brands if they made their sustainability credentials clearer on their packaging and in their marketing,” the study found.

Energy efficiency is clearly a potent avenue for businesses to save money, impact positively on the environment and increase their social impact in the communities they work with, all while fostering brand loyalty and growing their reputation as a business that cares.

The question is no longer when, but rather how all enterprises will implement energy efficiency as a vital business goal.

Articles written by Wessel Krige