Kenyan government officials, diplomats, and business leaders during the launch the Partnering 4 Green Growth national platform in Nairobi in July 2018. PHOTO | DIANA NGILA
Globalisation, digital connectivity, accelerated consumption and disparate prosperity have combined with ecological decline, a lack of global sustainability governance and resource scarcity to transform the playing field for businesses. For 25 years or more, society has recognised that the way we do business has serious impacts on the world around us. Now it is increasingly clear that the state of the world around us affects the way we live and do business.
Population growth, exploitation of natural resources, climate change and other factors are putting the world on a development trajectory that is not sustainable. In other words, if we fail to alter our patterns of production and consumption, things will begin to go badly wrong. How wrong and for whom, is already evident in the natural disasters and epidemics the world is currently facing.
At a national level, the transition to sustainable growth remains a goal rather than an achievement.
The concept of “green growth” has gained ground but we still lack a precise understanding of how we can achieve it along with higher standards of living within the limits of our planet. The upcoming 7th Governors Summit in Makueni will focus on the e
ffects of climate change. This presents a good opportunity for county governments to share good practices and reach consensus on action plans required to implement the Kenya Climate Change Act and the National Climate Change Action Plan.
Companies are, of course, not passive bystanders in any of this. The resources on which businesses rely will become more difficult and costly to access. There will be increasing strain on infrastructure and natural systems as patterns of economic growth and wealth change.
Physical assets and supply chains will be affected by the unpredictable results of a warming world. As a result businesses will be confronted with an ever more complex web of regulation, stakeholder pressure and market dynamics.
But this is not the whole story. Consumer and investor values are changing. And as these change, more companies are recognising that there is profit and opportunity in a broader sense of responsibility beyond financial results.
The bold, the visionary and the innovative recognise that what is good for people and the planet will also be good for the long-term bottom line and shareholder value.
Competitive advantage can be carved out of emerging risk. The top 10 risks in the most recent World Economic Forum Global Risks report were environmental and social.
Organisations need to understand how these risks will influence markets, customer loyalty and impact profitability in the medium to long term. This means moving on from old notions of corporate responsibility focused purely on protecting and enhancing reputation.
It means being aware that your business stands to be affected as supplies of fresh water decrease and costs of energy rise and ecosystems increasingly feel the strain of sustaining the world.
Knowing what those effects will be and how your business can manage them successfully means developing a sophisticated understanding of these risks and carving out proactive strategies to harness opportunities and optimise risks. We can never know the future, but it is good business sense to be prepared for the possibilities.
While the transition to a sustainable economy is technically possible, it requires widespread support from businesses, governments and civil society. This transition requires solutions that address both how and which goods and services are produced.
The UN Sustainable Development Goals (SDGs) present an opportunity for businesses to grow and profit by collaborating with others to create a world which is more prosperous, inclusive, sustainable and resilient.
The SDGs cannot provide all the answers, and do not set out to, but they do suggest approaches that will help to build sustainable business value in a changing world.
The SDGs provide a useful springboard for new thinking, debate and above all business action to deliver a future that is both sustainable and profitable.
As we enter the decade of action for the SDGs, both the public and private sectors have a vital role to play. A coordinated approach holds the key to sustainable development.
Kiore is a manager in Sustainability Advisory and Assurance Services, KPMG Advisory Services Limited.
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