In November this year, leaders from around the world will gather in Glasgow for the UN Climate Change Conference to explore ways that governments, the private sector, and global institutions can promote sustainable development. For me, the starting point is clear: Without a healthy planet, businesses cannot thrive.
This puts Environmental, Social and Governance (ESG) considerations at the forefront of business decisions, supported by the UN Sustainable Development Goals (SDGs) and increased awareness of the climate emergency. It is, therefore, a business imperative to adhere to frameworks, to sustainably exist in years to come.
As the world struggles with the reality of climate change and calls for businesses to operate as responsible corporate citizens in everything that they do, ESG reporting has become a key pillar of resilient and responsible markets. Additionally, many market regulators are now actively promoting disclosures by public listed companies. The Nairobi Securities Exchange (NSE), for example, is pushing all public listed companies to report on their ESG priorities and track performance of the same.
Investors, employees, customers, and other key stakeholders are also increasingly demanding that businesses have strong ESG credentials.
ESG analysis and reporting, therefore, provide valuable insights and help create long-term value for stakeholders. It can significantly impact the financial performance of a company and better inform investment decisions.
How then, can we ensure the ESG priorities anchor our business priorities? To accelerate a sustainable future together, companies should commit to the adoption of the SDGs, that align with their core activities. Other opportunities exist in the UN Global Compact and the Paris Climate Agreement, of which Kenya is a signatory, among others.
Adoption should then be followed by setting targets to be met across the various SDGs and a clear roadmap defining on how to achieve the same, with clear governance structures lead by senior-most executives. This process helps with staying away from “short-termism” as appropriately labeled by Harvard researchers, that prioritizes profit over planet, and pushes companies to “greenwash” to appease short term, growing consumer demand risking their future.
However, the efforts made by the private sector efforts towards coalescing around this cause, within and across various industries and sectors, is commendable. For instance, East African Breweries launched their inaugural sustainability report that gives an overview of the processes and mechanisms they have in place to support their commitment to doing business the right way.
The report gives some great highlight on the direct impact their sustainability work is having on various stakeholders and communities they operate in.
Financial institutions globally are also leading the way by signing up to the UN Principles of Responsible Banking, which offer a framework for a sustainable industry while promoting responsible lending practices.
Business leaders today – more than ever before – will need to reexamine the purpose of their businesses and honestly look beyond profits to people and the planet.
This is the time to ensure that supply chains are kept going whenever and wherever possible. It is time to ensure that business decisions promote human rights, align with globally accepted labor practices, protect, and enhance the environment, and boost anti-corruption techniques.
It is not an easy call to make in the middle of a distressing pandemic. But the pandemic has placed us in a position where we must make some of the most difficult decisions faced by leaders in a century. There is no higher calling.
As the United Nations Global Compact, our goal is to accelerate and scale the collective impact of businesses and deliver on the SDGs by 2030 through accountable companies and ecosystems that enable change. We believe that by committing to sustainability, businesses are united for a better world. We remain committed to supporting companies to align their practices towards a sustainable and inclusive future while building back stronger from the COVID-19 pandemic.
Judy Njino is the Executive Director of Global Compact Network Kenya