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Business sustainability trends to watch out for

Business sustainability trends to watch out for

Employees are showing willingness to come up with personal initiatives tailored towards the betterment of the environment. PHOTO | SHUTTERSTOCK Sustainability strategies have ascended quickly in the last five years and the Covid-19 pandemic has served as a catalyst of awakening interest and their adoption as reasonable approaches to remain resilient during these uncertain times.

Going by the number of companies that are reaching out for a diagnostic, if not strategy development – it is clear that sustainability is changing the way of doing business across the continent.

This week, I am reflecting on the four keys trends that are leading companies towards sustainability and what boards and senior management will need to consider as they design their strategies.

First, investors and other owners of money such as commercial banks are changing the finance narrative to include sustainability elements. More institutional investors are managing their portfolio through at least one type of sustainable investment strategies.

Strategies such negative/exclusionary screening, ESG integration and sustainability-themed investing are the top most deployed by institutional investors which private companies need to be aware of and align themselves on if they are to attract funding.

I expect these strategies are going to gain more momentum and are expected to continue to ascend as investors come forward to support companies to understand how they can best strengthen their ESG-related strategies and goals and link them to the core business models.

This calls for consideration of sustainability strategies to enable businesses to be favoured by the above strategies. This will not only lead to financing but also to cheaper financing for companies.

Secondly, in order to strengthen corporate governance and stewardship, companies are required by various parties such as regulators, shareholders and industry associations to consider sustainability reporting measures.

This coercion is mainly aimed at enhancing corporate governance and transparency within organisations. More companies for instance are being required to report under the Global Reporting Initiative (GRI) as well as capital market authorities and central banks requiring companies to disclose more information in regard to their sustainability journeys.

GRI is a component that organisations need to ensure that their senior officers are certified in. Organisations like KCIC Consulting Ltd have been accredited to provide GRI certification in Africa. The results of GRI certification include more companies embracing sustainability to show their engagements when it comes to sustainability matters.

A point in case for this is the financial sector which is undergoing a fundamental reshaping where I […]

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