By Nompumelelo Sibalukhulu
The era of businesses simply prioritizing the bottom line and focusing solely on increasing profitability is long gone. Today, beyond making profits, businesses not only have to incorporate the principles and ethics of being good corporate citizens that add value to society, but also need to make considerations about conducting business sustainably.
Sustainability speaks to thinking about the longevity of a business not just in relation to the consistency of its earnings, but also in relation to the environmental impact of doing business. Ensuring long-term profitability means that business strategy should also focus on investing in the protection and preservation of the environment which provides inputs, contains the infrastructure used in production, and hosts communities and markets for the products and services offered by businesses.
The recent Financial Mail Green Economy Conference brought to you by Schneider Electric in partnership Mulilo, Siemens Energy Southern Africa, Sanlam Investments, Kyocera, Energy and Water Sector Education and Training Authority and Lesedi companies committed to environmental sustainability and to realizing a greener future, unpacked the practical steps companies can take to become eco-conscious.
The first step that companies need to take on the path to becoming more environmentally sustainable is to have a plan. “No company strategy can go without planning for green and the environment… Like good corporate governance we should see sustainability as an integrated part of doing business,” said Devan Pillay, the Cluster President, Anglophone Africa for Schneider Electric.
Pillay added that companies can simply begin by reviewing their power consumption. By developing a consciousness about high consumption, companies can begin to consider and implement interventions to decrease their energy footprint. Changing behaviour around energy consumption can assist companies to integrate greening practices to become more competitive by decreasing their costs.
Robyn Vilakazi, the Chief Financial Officer, Energy and Water Sector Education and Training Authority (EwSETA), reiterated that greening is not a nice to have. In the prevailing global economic climate, companies need to shift from seeing the green economy as a prohibitor of growth and profitability but as imperative to their survival, to job creation, and to South Africa’s overall prosperity.
Among the opportunities presented by an increased commitment to a green economy, are reuse and recycling. Fergus Slattery, Director of CF Africa Pty Ltd, using the example of the recycling of e-waste, emphasized that companies need to think about how they could make the products reusable by using recyclable inputs in their production processes as well as in their end products.
Recycling is crucial, as it decreases the demand for raw materials. Slattery also highlighted the opportunity to expand the job creation potential of recycling, which is already being demonstrated in the informal sector, where we find independent waste pickers whose waste products are processed by larger collectors and fed into recycling ecosystem.
For companies that are looking to attract large investors, developing eco-conscious business strategies is even more important because environmental sustainability is increasingly becoming a requirement to qualify for funding. According to Teboho Makhabane, Head of ESG and Impact at Sanlam Investments, some funders have a strict greening mandate and companies need to demonstrate clearly how they are ticking the greening boxes.
While the two panels spoke positively about the imperative to go green, some panelists underscored the existing tension between going green and its social impact.
As a country, we have already committed to a just energy transition. A just transition should be equitable and inclusive, and this speaks to how the dividends of the transition will be distributed, that is, who will benefit and who will lose. Ajay Lalla, Project Development Specialist at Lesedi contended that as a country, we have paid lip service to the just transition, thus far, because we are failing on indicators such as gender equality.
Stuart MacWilliam, Head of Strategy and M&A at Mulilo, submitted that the transition need not be presented as a zero-sum game. The nature of a transition is that it is a change over time. “We need to have the right conversation for the period that we find ourselves in now”, he said. Agreeing with this perspective, Thabo Molelekoa, Chairman /Managing Director of Siemens Energy Southern Africa, said we need to focus on progress rather than perfection and that the process of adding green energy into the grid needs to be incremental.
Too often, the conversation on the just transition focuses only on the generation of power. Xolisa Dhlamini, Head of Sustainability Ops and Impact at Sanlam Investment, cautioned that companies and funders need to take a holistic view. “Funding allocators are not looking at the entire value chain, there is too much focus on generation and not on transmission and distribution and this is important for justice”, he said.
The green economy is a reality that companies, governments and educational institutions need to plan for. And while the conversation on the just transition usually highlights its benefits, it needs to also consider the impact of renewable energy on communities and more focus needs to be placed on understanding the knock on effects of its use, because it is not all positive.
Image source: Arena Events