History notes that there have always been people who have shown concern about the future of mankind. Their concerns have touched on the impact of human activities on the society, economy, and environment in which they live in.
Today, that concern has shifted; and businesses are continuously reviewing their impact on these three core components.
The effect a business has on the environment, and the society has steadily gained ground over the years with institutions increasingly becoming aware of their influence and becoming more intentional in having a positive impact. Today, businesses are expected to make profit and be deliberate about contributing to the greater good.
Notably, a considerable number of investors today look at factors such as a company’s carbon footprint, water usage, community development efforts and board diversity programmes before investing in businesses.
They use Environmental, Social and Governance (ESG) metrics to analyse an organisation’s ethical impact and sustainability practices. With these developments, it is evident that the focus on sustainability in business is stronger today, more than it was yesterday.
For many years, sustainability initiatives have been a secondary focus for most businesses. The scale however tipped after countries across the world signed the Paris Climate Agreement in 2016, prioritising matters of sustainability.
Since then, there has been progress on sustainability efforts within organisations. However, in order for these efforts to be entrenched in organisations, there ought to be a deliberate move to establish a sustainable culture.
One of the simple ways of doing this is by introducing successful employee strategies that involve smaller sustainable goals such as recycling, energy saving, water conservation and corporate tree planting activities.
At the business level, however, the ball game has to change, with emphasis being placed on a more strategic direction. Businesses ought to embed social, economic and environmental considerations into their strategies as they play a critical role in informing organisational decisions for growth, and posterity.
This way, institutions are also able to catalyse change while creating value through increased sales, decreased costs and reduced risks. Better still, the best of these businesses reate financial value in ways the market already assesses growth, returns on capital, risk management and quality management.
When it comes to growth, the environmental, social and economic programme of a business can help create new markets by facilitating exposure, meeting social needs and increasing product differentiation.
Such programmes can also catalyse cutting-edge technology accompanied by innovative products and services. This can influence higher brand loyalty, enhance the organisation’s reputation while gaining goodwill from stakeholders.
Organisations are leveraging these programmes to establish their presence in the markets, build businesses and also support Micro, Small and Medium Enterprises (MSMEs).
Stanbic Bank Kenya has been at the forefront of influencing economic change by developing commercially sound ways to address environmental and social challenges, accelerating economic growth, human development and making life better for communities.
In partnership with Microsoft Kenya and the Ministry of Trade and Industrialization, the Stanbic Kenya Foundation has been supporting MSMEs by building their capacity and equipping them with digital skills as part of their FutureNiDigital campaign.
So far, over 21,000 SMEs and individuals have benefited from the programmes and are able to position their businesses better in a digital world.
This has been achieved through the bank’s seven social, economic and environmental impact areas focusing on financial inclusion, job creation and enterprise development, infrastructure, trade and investment, climate change and sustainable finance, education and health.
As evidenced in the Report to Society 2020, Stanbic Bank stimulated economic activities during the national lock down by deploying enhanced digital channels, restructuring debt, providing pay holidays and removing interest on mobile money transfer, among others.
Legitimacy to operate
As we continue to have discussions around the social impact of organisations, it is also important to mention that companies need broad legitimacy in societies where they operate, if they are to sustain long-term ability to create shareholder value.
This legitimacy is reinforced by social, economic and environmental support offered by businesses.
At the same time, society depends on big businesses to provide economic benefits, and this is the type of relationship that forms the basis of an overarching contract between business and society as the two enjoy a symbiotic relationship.
It is therefore paramount for businesses to reinforce sustainability and good relations for the societal good as both go hand in hand.
Mr Mucai is the head of rsk andchair of SEE Agenda Stanbic Bank Kenya