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Businesses’ push for sustainable models gaining momentum

Vienna Court office block
PDM Holdings’ Vienna Court office block in Nairobi has eco-friendly design. PHOTO | SALATON NJAU 

In 2019, I conducted a survey to understand the state of environmental sustainability in corporate Kenya.

The survey conducted in May and June through random sampling involved 852 firms. The general trend that emerged is that more firms are increasingly becoming conscious of how operations, consumption and production are impacting the environment.

And even more, are exploring avenues for improvement as company boards and managers become more environmentally conscious amid growing calls for accountability in light of climate change.

Interesting takeaways surfaced from the survey.

To begin with, companies with one or more women on their boards or in top management tended to perform a lot better in the environmental management side of their business. It’s a no-brainer that gender diversity in the composition of the board plays a big role in promoting sustainability practices, beyond strengthening a firm’s business case.

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Along the gender diversity line, the study revealed yet another finding, a less glamorous one.

The longer the female executives sat on company boards and held corporate leadership, the less their advocacy became for sustainable business practices. With time, they progressively showed apathy to environmental concerns, among other sustainability concerns.

It was almost as if the hand of time moulded women executives into a profit-first mindset, traditionally associated with their male counterparts.

Another glaring finding is that home-grown businesses are still playing catch-up with foreign-owned companies in observing eco-friendly practices. Overall, firms with any form of foreign influence and exposure had a lot more far-reaching, progressive programmes around environmental management than local ones.

Similarly, companies listed on the stock market had better management of their environmental footprint, probably because they’re always under the radar of public scrutiny, and the watchful eye of regulators.

More tellingly, local companies surveyed became only proactive in their environmental practices as a result of their international exposure through exports to overseas jurisdictions with stricter environmental regulations.

Unlike most markets in Africa, where purchase decisions are based mainly on price, consumers in developed countries are more likely to push for green consumerism. This has compelled firms trading in such markets to commit themselves to sustainable operations with a lower carbon footprint.

Only 38 percent of the sampled firms said to have a dedicated sustainability department, some of which have committed themselves to the United Nations Global Compact sustainability principles.

Of the firms surveyed, 12 percent were foreign-owned, 20 percent were listed on the Nairobi Securities Exchange while 36 percent exported goods and services overseas.

With potential health and environmental risks associated with companies’ activities during the production of goods and services, none can escape the responsibility of caring beyond profitability to include people and planet.

Vision 2030 economic blueprint places the exploitation of natural resources at the heart of growth but also warns of negative consequences should it be done in an unsustainable manner.

At the corporate level, decision-makers must deploy strategies geared towards reducing their company’s harm to the environment even as they pursue growth avenues.

Unfortunately, some firms shy away from building environmentally-friendly practices into their business models, citing extra costs. This is the part that policymakers should step in to enable the transition to eco-friendly equipment and practices not only pocket-friendly but also flexible.

While climate change remains the biggest threat to agrarian economies like Kenya, the shift in focus to manufacturing as a job creator has led to the mass exploitation of natural resources and discharge of refuse into rivers.

Tied to this is the explosion of urbanisation that has led to a surfeit of effluent discharged, which has put a strain on the outstretched disposal infrastructure.

It’s heartwarming to note that more firms in Kenya, including shopping malls, are increasingly opting for energy efficiency through the use of clean energy, with solar leading the way.

Some have even gone a step further to manage their effluent effectively while adhering to policies and standards in place. Better still, several others are adopting a circular economy — reusing resources to avoid wastage.

Not to be left behind, consumers should constantly be educated on the importance of reusing and recycling products. For instance, they could be incentivised to return used packages like bottles to stores. As a good practice, it is laudable that most organisations are communicating environmental performance to their stakeholders through sustainability reporting which is the highest mark of environmental accountability.

To recap the findings of the survey, eco-friendly companies are most likely to have women representation in top management, be foreign-owned, publicly traded, or and have overseas clients.

The study report will be unveiled on Thursday in Nairobi.

The writer is CEO, Kenya Climate Innovation Centre.

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