Letters

LETTERS: Sustainable enterprise goes beyond CSR activities like sponsorships

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A dentist assesses a woman during at a medical camp in Nairobi organised by a corporate body. FILE PHOTO | NMG

It is easy to give after you have made the money, but intricately binding your business’s impact on society and environment with financial return takes vision and hard work. Why? It takes investment and the rewards are not always immediate.

In an era of quarterly reporting to shareholders and the 24-7 scrutiny of financial analysts and market pundits, that can be daunting.

The idea of business is to make profit by providing a good or service to paying clients. The profits are then divided among lenders and shareholders, employees, and the taxman.

Challenges dot the world or business locations.

For your business to thrive it has to manage the interests of a multitude of stakeholders, not just your lenders and shareholders, employees, and the taxman.

Board and management have to build relationships and balance the competing interests of all stakeholders. All this has to be done using less resources to achieve more.

I have read in this newspaper, that Kenya Breweries Limited (KBL) is preparing to start production at its Kisumu plant. They are going to make more affordable products using locally sourced ingredients.

It targets to start producing one million hectolitres of Senator Keg, a brand targeting people consuming illicit alcohol because of cost. To cynics, this is just big business chasing an opportunity. But business has to balance the interests of competing stakeholders.

First, the board and management of EABL had to sell the Sh15 billion investment to Diageo Plc, the majority shareholder, the production of Senator Keg has to be cost-efficient, and quality standards need to meet requirements of the Kenya Bureau of Standards, Ministry of Health, and Pharmacy and Poisons Board, among others.

KBL is partnering with farmers in semi-arid areas to source sorghum. This is instead of the traditional barley used to make the Guinness, Tusker and Pilsner brands that KBL is most famous for.

A 2005 report by Export Processing Zones Authority on the Kenyan beer industry, notes that the British first grew barley as animal feed until 1929, when it was used one of the main ingredients for beer. The report adds: “Barley does well at high and medium altitudes with consistent annual rainfall of more than 635mm”.

According to a 2013 report by the Food and Agriculture Organisation of the United Nations (FAO), sorghum is the only cereal species indigenous to Kenya.

Sorghum can grow anywhere from sea level to 2,500 metres above sea level and requires a minimum rainfall of 250mm per year.

Additional sources of income are particularly important to our farmers during these times of uncertain weather conditions.

READ: KBL targets 15,000 sorghum farmers in lake region

Low-income farmers across Eastern, Western, Nyanza and Rift Valley can now supplement their incomes by selling sorghum to KBL.

Besides switching to sorghum, which uses less water to grow, KBL’s refurbished plant will be much more energy-efficient.

KBL saw a business opportunity, but to make it work, it is collaborating with farmers, authorities, and regulators while striving to save energy and water to create win-win outcomes for stakeholders.

How we conduct business has an impact on society, environment and economy. It will drive or destroy long term value. It is true, whether you are a family run business or a global, public company.

The King IV Report says, “organisations contribute to the broader society as creators of wealth; providers of goods, services and employment; contributors to the fiscus; and developers of human capital.”

Good hard-nosed business is moving beyond corporate social responsibility and weaving sustainability into your business model.

Meshack Joram, CEO of the Institute of Directors Kenya.