Ideas & Debate

Why companies need to reconnect business success with social progress

tree

Eldoret City Marathon director Moses Tanui (right) and Uasin Gishu County Ecosystem Conservator Thomas Kiptoo during a tree planting exercise at Kapseret Forest on September 11, 2020. PHOTO | JARED NYATAYA | NMG

Summary

  • The principle of shared value advocates creating business value in a way that also creates value for both the society and the environment. In essence, businesses must reconnect company success with social progress.

Historically, companies have invested in corporate social responsibility programmes which have mostly taken the form of philanthropic engagements.

And whilst there is nothing wrong with businesses giving back to the communities within which they operate, this approach is undergoing a fundamental transformation as businesses increasingly realise that these efforts could be more sustainable and impactful if they became part of the core business.

Today, it has become more apparent that businesses can make money by resolving deep-rooted societal, economic, and environmental challenges.

Various empirical studies indicate that unless affirmative action is taken now, environmental degradation will continue to deplete food production and access to water, with compounded adverse impact on lives and livelihoods.

In line with this, it is imperative for leaders to act today in order to safeguard not only the future of our children, but also the sustainability of the businesses that we run.

The solution to this lies in the principle of shared value, which advocates creating business value in a way that also creates value for both the society and the environment. In essence, businesses must reconnect company success with social progress.

That’s the bedrock of sustainable business development and the impetus behind the launch of our Absa Sustainability Commitment report last month.

Over the last one year, Absa Bank Kenya has embarked on a journey to embed sustainability as a strategic business principle with the objective of creating incremental shared value for all our stakeholders, both in the way we do business and the services and products we offer.

As part of this journey, we have marked several milestones among them the development of a Sustainability Strategy and Implementation Framework. Last year, we became one of the Signatories of the Principles for Responsible Banking, committing to strategically align our business with the Sustainable Development Goals and the Paris Agreement on Climate Change. We also became a signatory of the United Nations Global Compact.

Whilst we support the implementation of all the 17 SDGs, we have selected four high impact goals as our primary focus namely; Quality Education, Decent Work and Economic Growth, Reduced Inequalities as well as Responsible Consumption and Production.

We have identified SDG 16 on Peace, Justice and Strong Institutions as well as SGD 17 on Partnerships for the goals as key enablers to implement and scale our impact.

With our Sustainability Commitment Report, we have committed to focus our efforts on delivering the triple bottom line of people, planet and profit in all our strategies, products and propositions. We are taking a bold step that will inspire our innovation on social and environmental challenges in line with our commitment to be a more active force for good in the communities where we operate.

As a financial institution, we are in the businesses of lending and therefore we have committed to proactively increase our capital allocation and diversify our portfolio to support sectors that drive sustainable developments. These include renewable and clean energy industries; innovation and infrastructure, as well as funding financially excluded groups; sustainable cities and communities. We will also advocate and drive responsible consumption and production within value chains.

We recognise that diversity forms the fabric of modern society, making it an asset for our business and for that reason we commit to increase diversity in the supply chain focusing on Women, Youth, and Persons who are differently-abled. This is a sure way to foster innovation and creativity, while releasing unparalleled levels of productivity that impact business and society.

We acknowledge that we cannot meet the global goals without the involvement of young people, and we have committed to continue investing in their future through skills development with our ReadyToWork program.

We have also committed to increase the proportion of women across all levels of management and board positions in our organisation. Gender diversity is a proven enabler of better financial performance. We have made progress in this area and recommit to promoting further gender diversity within the bank.

We have committed to empower our suppliers and create awareness on corporate sustainability and responsible business practices. As we embark on our sustainability journey, we are empowering our suppliers on driving sustainable businesses through the SDGs and the UN Global compact principles underpinned by the shared value principle.

Mindful of our environment and recognising that we have a responsibility to safeguard it not just for ourselves but for the sake of future generations, we have committed to plant 10 million trees in the next five years.

In the famous words of the prominent environmentalist David Brower, we do not inherit the earth from our ancestors; we borrow it from our children. In line with this, we commit to increase biodiversity and encourage environmental responsibility through planting trees.

We are inviting other business leaders, partners and stakeholders to join us on this exciting journey and together, we shall make a difference.

Awori is Managing Director, Absa Bank Kenya PLC