/ 7 June 2022

OPINION| Building business sustainability is not just an expensive, developed-world problem

The Economy Has Slowed Down During The 21 Day Lockdown Photo Delwyn Verasamy
The lockdown provided us with a prism through which we could look at our crazy lives and simplify them. It was a strange and special time

Although most businesses understand the importance of sustainable business practices, they tend to steer away from them because of the belief that all sustainable business models and practices are expensive but “nice to haves” built for the developed world. This is a myth. 

In reality, many sustainability and circular economy business models are financially viable and create lasting competitive advantage.  

Moreover, holistic models play an important role in reducing the disastrous effects of extreme weather (both flooding and drought) through conservation practices such as removal of plastic waste, retention of drainage lands and use of regenerative agricultural practices including aquaculture, pasture cropping and biochar.

Some notable corporates have successfully adopted sustainable and circular economy business models into financially viable businesses. Nestlé Africa, for example, is planning to support the transition to a regenerative food system — one that aims to protect and restore the environment and improve the livelihood of farmers and the well-being of farming communities. 

Furthermore, in Central and West Africa, Nestle’s focus is on ensuring the supply of local agricultural materials, creating inclusive livelihoods for smallholder farmers, women, and youth, while protecting environmental resources.  

In 2021, Nestlé East and Southern Africa region unveiled an industrial-scale pilot project that successfully tested a global-first, artificial intelligence technology in Africa that reduces emissions and saves water, at its Babelegi factory in Pretoria.

Leading African retailer, Spar aims to have 100% reusable, recyclable or compostable plastic packaging and make sure all the paper and board they use is 100% sustainable by 2025. Their approach to agricultural practices has also been critical to their overall sustainability drive. 

According to Zaa Melaia, group fresh brands manager at the Spar Group South Africa, the retailer’s “Growing the Good” initiative focuses on biological farming best practices, training farmers and growers’ on best practices such as night irrigation, soil restoration and using natural parasite products. In addition to reducing direct environmental footprint, Spar invested in energy efficiency and solar photovoltaic initiatives to reduce energy consumption and energy costs while mitigating the risk of load-shedding.

And other corporates are also pressing forward with their sustainability goals, notably Tiger Brands, which is Africa’s largest food company and has also recently indicated the intention to be net-zero by 2050. According to Robin Sundaram from  Nestlé UK, achieving this will require deep sustainability practices across all areas of the business from the supply side all the way through to the end consumer.

As we know, fossil fuels such as coal, oil and gas are by far the largest contributor to global climate change and are deeply embedded in all aspects of the economy from energy to plastics production. Yet despite having contributed the least to global warming and having the lowest emissions, Africa faces exponential damage from the effects of climate change, posing systemic risks to its economies, infrastructure investments, water and food systems, public health, agriculture, and livelihoods, threatening to undo its modest development gains and slip into higher levels of extreme poverty.

Clusters of climate-related disasters such as the KwaZulu-Natal floods that claimed over 400 lives, resulting from tropical storm Eloise, the deadly tropical storm Ana that made landfall on 24 January 2022 and affected Madagascar, Malawi and Mozambique, followed by tropical storm Dumako on 17 February and tropical cyclone Gombe making landfall less than a month later in March are a stark reminder for us to pay attention to climate change.

Yet how? With increasing population growth and urbanisation, as we succeed in creating more jobs we will create more waste-creating households and more fuel-consuming cars on the road, together with higher electricity needs, all of which will have a negative knock-on effect on the environment.

The question is, how can we build businesses and create jobs that are “net zero”? How can we build inclusive wealth and better livelihoods that are good not just for today, but for the planet too?

According to the World Bank, many African countries have made significant development achievements in the last few decades with annual growth averaging 4.5% in building resilience and growth through climate change, but increasing weather, water, and climate risks threaten these gains

Luckily Africa is among the most innovative continents when producing sustainable solutions to climate change, such as Gjenge Makers, a Kenyan based small enterprise. Having observed the volumes of plastic bags polluting the streets of Nairobi, the start-up developed a machine that compresses a mixture of plastic and sand into bricks, solving both the environmental issue and providing affordable housing or building materials. And we are seeing an Africa-wide revolution of businesses, fly larvae turning organic waste into animal feed and rising numbers of solar and wind generators, biogas generators and regenerative agriculture initiatives across the continent.

Each of us is responsible for acting upon climate change, and big and small businesses, can take responsibility for their own sustainability and environmental footprint by adopting sustainable business models, practices and programmes. This should be more than just a sustainability drive; it should be part of our everyday business growth model.

Through Fetola’s Circular Economy Accelerator (CEA), we’ve also come to understand that businesses can practice sustainable business models that make good financial sense, so much so that specialist finance classes are emerging to finance exactly these types of business models. And increasingly, as local and international consumers demand more climate-friendly products and services we anticipate more and more businesses will be pulled into a virtuous cycle of business that is good for the pocket and  the planet.

Circular economy practice is built on the fundamental goal of  “design out waste”, thereby keeping materials and products in circulation — without introducing new raw materials, or dumping waste.

Fetola’s CEA programme is an end-to-end growth solution built with a high level of confidence built on the results of two previous sustainability sector initiatives. The programme empowers entrepreneurs to succeed as thriving, profitable circularity enterprises. The CEA is projected to impact 5000 SMEs and create 11 836 jobs over the next 10 years, resulting in positive outcomes for entrepreneurs who follow these practices.

It is increasingly evident that sustainable business models can indeed be profitable. And as growing demand for a better global future compels businesses to do away with the old inefficient business models and seek ways to be responsible for their sustainability footprint, we must find ways to build livelihoods that bring a better future not just for today, but for generations to come.

The views expressed are those of the author and do not necessarily reflect the official policy or position of the Mail & Guardian.