Contrary to a popular belief that adopting the culture of sustainability by corporations drains their profits sustainability experts say the concept adds value, innovation and more profits to organisations grow their bottom-line, reports Bamidele Famoofo
A report from the United Nations Sustainable Development Goals (UNSDGs) disclosed that by 2030, corporations across the globe will make up to $12 trillion in savings and revenue and create up to 380 million jobs if they keep to the practice of making their businesses sustainable.
Meanwhile, developing countries like Nigeria are not left out of this huge economic benefit as “over 50 percent of this value can be unlocked in developing countries.”
In addition to the imminent economic benefits expected to come from making businesses sustainable, the report disclosed that “pricing environmental externalities would increase the value of market opportunities by another 40 per cent in the same period.”
Ellen MacArthur Foundation and McKinsey in 2015 also carried out a major study that demonstrated that the adoption of sustainable practices could boost Europe’s resource productivity by three percent by 2030, generating cost savings of €600 billion a year and €1.8 trillion more in other economic benefits.
According to the Global Reporting Initiative (GRI), the company believed to have the most recognised sustainability reporting standard, 93 percent of the world’s largest 250 corporations report on their sustainability performance as at the moment. GRI helps both businesses and governments worldwide understand and communicate their impact on critical sustainability issues such as climate change, human rights, governance and social well-being. This enables real action to create social, environmental and economic benefits for everyone.
It was for this same reason that Africa and especially Nigeria to quickly take position and prepare for the benefits in the days ahead that informed the strategic partnership between the Nigerian Stock Exchange (NSE), The Dangote Group and GRI to stimulate corporations in Africa, and especially Nigeria to join the fast-moving train of sustainability.
Towards achieving their common goal, the trio organised a workshop for accountants, financial analysts and communications practitioners to help them see their roles in making the biggest economy in Africa to take the centre stage in the continent of Africa.
Director, GRI Africa, Mr. Douglas Kativu, defined sustainability reporting as an organisation’s practice of reporting publicly on its economic, environmental, and/or social impacts, and hence its contributions -positive or negative -towards the goal of sustainable development.
Kativu argued that sustainability, rather than being treated as mere corporate social responsibility as has been postulated by some schools of thoughts, is not just the right thing to do; but also a means to foster innovation, cost savings, brand differentiation, long-term thinking, employee engagement and customer engagement by organisations.
Also justifying a business case for sustainability reporting, Kativu said the external benefits include building reputation and trust for corporations. “Proactive and transparent communications about your sustainability efforts builds goodwill, reducing reputation risks. It also improves product image, brand name and reputation.”
Speaking about how sustainability can attract capital for organisations, he said, embracing the concept will reduce risk through sustainability management while communication can help signal quality and good management, providing potential for new sources of capital and lower costs.
Kativu noted that sustainability reporting is a powerful tool to build or restore trust among stakeholders, while companies gain competitive advantage as their customers look for suppliers that minimise environmental and social risks. “By reporting, companies can increase customer satisfaction and loyalty, and access the supply chain,” he said.
Sustainability ‘The Dangote Way’
After launching its sustainability report on the floor of the Nigerian Stock Exchange in May 2018, the Dangote Group especially the Cement unit has made tremendous progress in internalising the culture of sustainability within its workforce while also making measurable impacts in its operating environments.
Chairman of the Board and Group President/CEO, Dangote Group, Alhaji Aliko Dangote, presenting the group’s sustainability performance report hinted that their approach to sustainability has been developed through an extensive stakeholder engagement process, led by the sustainability and governance department of the group.
In what he described as ‘The Dangote Way’, he said “our unique approach towards engendering sustainability across all our operations embeds at the core of our procedures and corporate culture, indicative of our absolute commitment to sustainability; powered by the highest levels of governance.”
Describing the importance of sustainability to the Dangote Group, Mr. Olakunle Alake, Group Managing Director, Dangote Industries Limited, said the beauty of sustainability to the group was that it has brought out the best in who they are as a business while laying a strong foundation for the group’s sustainable future.
“There is a strong business case for sustainability that we must leverage to drive the actualisation of our corporate goals and objectives. As one of Africa’s biggest conglomerates and one that aspires to be among the major brands in the world, we have commitment to lead by example by building a business where best practices are the norm,” Alake revealed.
Chief Sustainability Officer, Dangote Group, Dr. Ndidi Nnoli, presented the Dangote’s phased journey towards best-in-class sustainability and impact reporting. According to her, the group started the long journey in sustainability in 2017 by customising its seven pillars of sustainability based on extensive stakeholder engagement.
“We developed and institutionalised a robust data gathering framework and capacity building to embed a strong sustainability culture across the core business functions. We also facilitated road shows, workshops and stakeholder surveys which would inform the sustainability policy, processes, systems and culture,” Nnoli hinted.
The group in 2018 extended its reach to sustain its business by first engaging stakeholders internally for identification of material aspects. Then it expanded sustainability reporting to cover the cement group across Africa. Nnoli disclosed that the group embedded sustainability thinking and doing at all levels of governance, operations and corporate culture.
“We embed ‘The Dangote Way’ of sustainability action through innovation (circular economy and corporate volunteering initiatives,” she enthused.
The group’s custodian of sustainability said she built a case for systems-driven, institutionalised, group-wide reporting from 1st January 2019 while executing full reporting across all Dangote businesses in Africa, leveraging lessons from Dangote Cement Plc and building internal capacity and know-how to execute.
Dangote planned to establish full GRI standard compliant sustainability reporting across the group in Africa by 2020. It will also perform third-party assurance of (non-financial) sustainability alongside financial reporting beginning from next year.
Training was key to the success that Dangote group has recorded so far in its unending journey towards making its business sustainable. Since 2017, the group delivered executive education for 700 Dangote professionals across Africa, for in-house capacity in Sustainability and Impact Reporting. “Most recently, between 7 -17 May, 2019, we held a 2-week IMPACT focused workshop prioritising sustainability reporting, circular economy, innovative social investments, Women in Sustainability and Sustainability Systems. In May, 140 participants from head office and the three Nigerian plants were certified by University of Edinburgh. Innovative ideas were generated to enhance DCP’s continuous improvement in its social, environmental and governance responsibilities, including the Extended Producer Responsibility Initiative.”
Hitherto, 37,000 jobs (direct, indirect and induced) have been sustained at Dangote Cement Plc (DCP) while total gross value added increased to N504billion across the group. According to a DCP performance tracker report obtained by THISDAY, household income in the communities where DCP operates stood at N72.7billion while community compensation spent on land acquisition and involuntary resettlement in Nigeria stood in excess of N102million.
Health investment (that is, money spent on health initiatives in Nigerian operations) was estimated at N40million while educational investment for scholarships and other educational investments in Nigeria stood at N78million.