This year marks the 53rd anniversary of Earth Day – an awareness drive and advocacy movement dedicated to unifying global stakeholders and civil society towards creating a greener and more sustainable future.
The message behind Earth Day is simple. In order to bring about the social and environmental change needed to continue sustaining the planet and its people, we all need to work together.
In promoting a practical approach to the global goal of carbon neutrality by 2030, the UN has set 17 Sustainable Development Goals (SDGs) as guidelines for member states. As part of the UN, South Africa has expressed its commitment to working towards these goals, with a particular focus on job creation, poverty elimination, the reduction of inequality and the growth of an inclusive economy.
Over the past decade, ESG (Environmental, Social and Governance) objectives have become a focal point for leadership teams and industry regulators in the corporate world. Many of South Africa’s larger corporates now employ in-house specialists and teams dedicated to ESG reporting, ‘green auditing’ and policymaking. In the small business sector, however, progress has understandably been significantly slower.
With much of the legal and ethical scrutiny falling on big corporates in recent years, small businesses have often been overlooked. However, as engines of economic development, and critical sources of job creation, more small businesses need to commit themselves to a more sustainable future.
In South Africa in particular, where small businesses employ a large proportion of the workforce, these businesses have the opportunity to lead the way and set the benchmark for sustainability in the business world. Together, the country can achieve big wins by starting small.
In previous years, data on the impact of factors like energy-saving in the workplace, transparency, better workplace culture and waste reduction was limited, with the industry being relatively new. However, with the integration of sustainability goals becoming more mature and with the data collected becoming more robust, a clearer picture is emerging.
The data available makes a compelling case for the fact that business profitability and sustainability are not mutually exclusive. In fact, there is a strong business case to be made for sustainability. These are a few of the benefits of adopting more sustainable practices in your small business:
1. Cost-cutting: A measure as simple as replacing the lighting in your store or office for energy-saving alternatives can save you a substantial amount of money in the long run. In light of the ongoing energy crisis and the looming prospect of rising energy tariffs, cutting the cost of energy in your business is one of the key ways to futureproof yourself.
2. Improved profitability: A recent report published by the International Finance Corporation found a correlation between business profitability and sustainability activities. This has been illustrated across several examples in a number of sectors including agriculture, technology, microfinance and eco-tourism.
For small businesses, better profitability due to cost reductions, increased revenues and boosted productivity translates into better credit worthiness – a vital factor for businesses who may need access to finance in future.
3. Unique selling point: A recent study conducted by Mastercard showed that over half of South African consumers feel compelled to make more sustainable buying decisions. As a small business owner, foregrounding your sustainability-first philosophy and talking to the green benefits of your product or service can help you grab more wallet share, expand your customer base and attract better quality suppliers.
4. Happier employees: The “S” in ESG is often overlooked. But in countries like South Africa, where the need for social justice is particularly pressing, fostering healthier workplace cultures is imperative to business growth and longevity.
Workplace cultures that are more conducive to employee wellness and job satisfaction have been linked to lower staff turnover rates. This, in turn, translates into greatly reduced hiring and onboarding costs. Ultimately a team of workers who feel valued will feel more equipped and motivated to deliver value.
Ben Bierman is the managing director of Business Partners.
BUSINESS REPORT