Managing risk by investing in sustainable environmental, social and governance strategies
For decades the business sector has recognised its corporate social responsibility and has invested in sustainability programmes aimed at supporting, amongst others, community health, access to quality education, infrastructure, and enterprise development initiatives. The philosophy that the success of a business is directly linked to the stability and growth of the country and the communities in which it operates dates back to the early 1970s.
Tshikululu’s 2013 research entitled Value and Values: What motivates corporate citizenship in South Africa, highlighted the key reasons that influence corporate social responsibility. A commitment to support South Africa’s growth; company culture, traditions, and values; and that it is an ethical imperative; were ranked the top three motivators, whilst reducing business risks was ranked the lowest.
Since then, how businesses manage corporate social responsibility and more specifically environmental, societal and governance (ESG) criteria, particularly in an increasingly complex and volatile society, has grown in relevance given the impact that the operations of a business has, positively or negatively, on business profitability, the environment, society and its relationships with investors and other key stakeholders.
In addition to measuring ESG criteria, other frameworks such as the King IV Code on Corporate Governance, FTSE/JSE Responsible Investment Indices,The Board-Based Black Economic Empowerment Act 2003,GRI Sustainability Reporting Standards and the Sustainable Development Goals Disclosure reporting, have led to a set of complex requirements for business to integrate, monitor and act on.
The complexity of managing numerous reporting initiatives, across a business and often in a disparate way, by various functions, can lead to inefficiencies, duplication of effort and inconsistencies in providing a consolidated view of the impact of a business on the environment and society and ultimately a more sustainable future.
By adopting sustainable business practices and integrating environmental, social and governance dimensions across the business as part of an overarching strategy requires commitment from the Board to ensure that the right governance structures and resources are in place to translate strategic intent into plans that supports daily practices and are continuously monitored based on measurable and credible data.
For the past 24 years Tshikululu has developed, implemented, and evaluated sustainability strategies that consider the intersectional nature of environmental, societal and governance dimensions on business and society. Developing strategies and ensuring that these are integrated and continuously measured across the business, whether the focus is on biodiversity, water security, or supporting local communities to access quality education, health and employment opportunities, contributes towards the management of country risks such as climate change, unemployment, poverty and inequality. The business sector is recognised as a key partner in addressing societal issues and the opportunity to refine and strengthen sustainable business practices for the benefit of the environment and society is more important than ever.