By Marcel Bruyns
If any trend signals the next evolutionary stage of business in South Africa and around the world, it’s sustainability. Environmental, social, and governance (ESG) discussions have become ubiquitous, illustrated by the number of companies that are setting science-based carbon targets and pledging to reach net zero by 2050.
Prioritising sustainability in South Africa is now a strategic necessity, at least from a local SME perspective. According to a survey by Retail Capital, small and medium enterprises (SME) respondents identified improved customer relations (41.6%), cost savings (37.8%), and improved brand reputation as benefits of incorporating sustainability into their operations.
This trend applies to all sectors, and a fundamental part of it is taking responsibility for the entire value chain of products and services. That means working to achieve supply chain sustainability and adhering to ethical practices that touch every corner of businesses’ operations and activities.
There are several facets to this, and by taking a strategic approach, enterprises can contribute to bettering themselves and the world we live in.
Taking control and having oversight
Supply chain sustainability occurs when organisations integrate ethical and environmentally friendly practices into their business model. This means considering the whole chain, from sourcing natural resources and labour to manufacturing, logistics, and transportation, as well as product end-of-life cycles and their long-term environmental impact.
For many organisations, the road to sustainability is paved by globally recognised agreements such as the UN Sustainable Development Goals, specifically Goals 12 and 13, which govern responsible consumption and production, and climate action. Key to achieving these goals is transparency. Launching products that are branded as “sustainable” is not comparable to actually overseeing and being cognisant of ESG factors across the value chain.
There is also an incentive from the side of the consumer. PwC research shows South African consumers are willing to pay more for products that incorporate sustainability considerations. Increased social media chatter about the topic shows an inherent risk in disregarding those considerations, leading us to the four pillars that reinforce a roundhouse sustainability strategy.
The four pillars of sustainability
Responsibility to people
Inclusion and diversity are very important to growing a business. Not only does it promote a welcoming and accommodating workplace environment, but also a culture of innovation. People can come up with new ideas, offer different perspectives, and unlock previously unseen value in a company. Beyond that, companies need to adhere to fundamental human rights such as workplace health and safety, labour conditions, and remediation and legal compliance procedures.
Responsibility to the planet
Spurred by consumer preferences and evolving legal requirements, organisations need to double down on minimising their environmental impact. This goes beyond simply committing to using fossil-free energy or being carbon neutral by a specific date. Organisations should consider their use of other resources such as water, the production and use of materials such as plastic, and emissions that stem from product packaging, transport, and end-of-life. There is also an emphasis on adhering to and setting ‘science-based’ emissions targets, meaning they fall in line with the latest targets climate science deems necessary to meet the goals of the Paris Agreement.
Responsible innovation
The proliferation of digital technologies gave way to a new frontier in information. But, at the same time, it raised the stakes and demanded organisations take extra steps to safeguard that information, ensure the privacy of individuals, and protect their investments. Companies need to protect data assets and digital resources, which involves training staff and raising awareness of security’s importance. They should also ensure the digital products and services they offer adhere to international certification standards, and be prepared to support those products with security updates and patches throughout their lifespan.
Responsibility to partners and suppliers
The majority of businesses do not operate in a vacuum. They have partners, suppliers, and relationships that help them build resiliency and are consequential to their long-term success. Organisations should be inclined to share knowledge and expertise and share a common vision when developing new solutions and technologies. This also falls back on the question of transparency. By publishing sustainability and governance reports in line with Global Reporting Initiative (GRI) principles, companies have the receipts to prove their efforts and can identify ethical and logistical weaknesses in the supply chain.
Everything is connected
Compartmentalisation may work for some areas of business activity, but not when it comes to being sustainable. Visibility remains a top priority for supply chain executives as it is an element that can compromise any long-term vision or sustainability initiative. South African brands derive value and resiliency by being sustainable. It is, therefore, a key ingredient to business success and, by embracing it, we will get closer to a brighter future.
Marcel Bruyns is a sales manager for Africa at Axis Communications.
BUSINESS REPORT