IN times of economic and geopolitical uncertainty, how are businesses keeping sustainability at the top of the corporate agenda? How are chief executives and boards leading their organisations towards a more sustainable and profitable future?
Where sustainability and profitability conflict, how do you strike the right balance? As old business models fail due to climate change, how can organisations adapt and find new markets?
These are some of the questions that businesses are asking due to intensifying pressure from consumers, trading partners, investors, regulators, and employees to back their commitments with verifiable action.
The sustainability movement that began sweeping the corporate world in advanced economies decades ago is now hitting home in full force.
Companies are finding that mere pledges to go green and be socially responsible and transparent are not enough, they need to back their commitments with verifiable action.
It is exciting to see Zimbabwe taking charge. In November 2023, the Zimbabwe Stock Exchange published a practice note for issuers for the mandatory adoption of sustainability reporting.
The sustainability reporting framework came into effect on January 1 2024 and is ushering in a new paradigm for sustainability reporting in Zimbabwe.
It is fair to say that the framework is an effort to raise the significance of sustainability reporting to the level of financial reporting, while establishing transparent, comparable information regarding companies’ environment, social and governance (ESG) performance.
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But sustainability reporting is more than just a reporting obligation — it intends to transform the business sector into a more sustainable and resilient economy.
As I reflect on the outcomes of COP28, pronouncements of corporate commitments highlight the transformative potential that the private sector can play in driving real sustainable change.
Businesses should embrace sustainability across the organisation, go beyond compliance, and deliver the increasingly critical business sustainability.
Sustainable business practices are essential for creating a resilient, equitable and prosperous future for both businesses and society as a whole, ensuring that we leave no one behind.
Companies need to figure out how to manage physical and transition risks that may endanger assets, attract capital, align their climate strategies to global net-zero objectives.
They also need to develop products and services resilient enough to succeed in even the most dynamic of markets.
Several companies are taking actions that could help in key export markets. Last month, I met with a group of global sustainability leaders in London to discuss, among other things, how sustainability has become a global imperative for trade reflecting on two recent European Union (EU) regulations that will impact companies exporting into that region.
We are reminded that what happens in the EU does not necessarily stay in there, therefore, companies exporting into that market need to start embracing sustainability in their strategies and operations.
When people talk about sustainability reporting, the one thing I hear the most is what ESG material issues do we focus on.
Companies need to focus on areas that have the most potential to endanger enterprise value.
An accurate materiality analysis directs resources to the ESG topics that are most critical across your organisation’s value chain.
By identifying and addressing sustainability issues that are material from an impact or/and financial perspective, companies lay the foundation for a successful ESG and sustainability strategy and reporting practice.
As a chief sustainability officer, what happens when your board or CEO says, “I get that sustainability reporting is important but you got this right?”
Well yes, I have a plan but also, no, because I need robust data collection systems and new data governance. I need a new audit plan. I need new internal controls and I only got this if I have hands on deck.
It is really important internally to be able to drive this message that sustainability reporting compliance is not an exercise that happens behind closed doors of your ESG or sustainability team.
You are going to need your internal organisation finance, IT, internal control and internal audit teams on board with you on the road to compliance. You also need your human resources colleagues to help you with training the teams on how to record their data and ensure that processes are documented and followed.
It is a massive retraining exercise and you need them on board.
You need them on board to sell to them on it so that they are willing parties of the process.
Those that look at sustainability and only see the burden are missing the point.
If you think of sustainability fundamentally, it is changing the rules for ESG governance and setting a bar for compliance that ultimately helps the strategies that we are building within our companies.
To enable businesses to win with sustainability, they need to embed it into the company’s purpose, business strategy, and goals.
They also need to make resilience and change a priority of the organisation’s core operations through ESG initiatives.
There is need to leverage and accelerate technological innovation to reach sustainability, while considering new sustainable business models to capture emerging opportunities.
In addition to having science-based, publicly-stated and reported targets, businesses need to continually communicate and engage with stakeholders to demonstrate that the company is keeping its promises.
While the area of sustainability is rapidly evolving and may be daunting, aligning sustainability efforts with financial and operational strategy empowers organisations to lay the groundwork for transformation and growth in a resilient, climate-neutral and circular economy.
- Tapera is a certified expert in ESG and impact investing. She is also a sustainable business leader. — [email protected]
