Last month, I was speaking at the International Trade Center (ITC) on commerce and sustainability. The key question was whether trade is good for sustainability? The answer is yes and we cannot do without trade. It is, however, imperative that we mainstream sustainability into trade matters.
Currently, and in the future, there is need to do more sustainable trade. Trade falls under the framework of the sustainable development goals (SDGs), specifically goal number 12 on sustainable production and consumption. There is a clear link between trade and production and consumption.
Sustainable development is defined as a that which satisfies the needs of the present without compromising the ability of future generations to satisfy theirs. For this to happen, there is need for the fulfilment of several conditions: preserving the overall balance, respect for the environment, and preventing the exhaustion of natural resources and ensuring that people (employees, communities) are better. Trade must be able to tick all the boxes if we are to call it sustainable trade.
Making trade sustainable calls for decisive action from big and small companies where their managements need to be deliberate on their action to make sure that sustainability is looked as a mainstream agenda as opposed to a peripheral agenda.
Sustainability is not for the big companies; it is also for the SMEs that want to survive in the 21st century and those that recognise that we do not have a “Planet B” for our future generations.
To achieve to sustainability, companies must consider which are the low hanging fruits within their production or service value chain and address those issues as a matter of urgency. These could be issues related to consumption of energy, water and other materials; audit of the product/service life cycle and determining how to make it sustainable, for instance taking back the packaging materials and reusing or recycling them; ensuring proper working conditions for the workers; observing the code of human rights for the workers and the communities that are affected by the operations of the business. All these will go a long way into making an organisation as well as its involvement in trade sustainable.
In 2019, we carried out a survey assessing the level of awareness of the Kenyan public on sustainability. Relatively to other developing countries, Kenya is doing well. Over 65 percent of the population are aware of the SDGs in Kenya. In more developed countries, the percentage is much higher with countries such as Denmark, Norway and the Netherlands having over 95 percent of the general public being aware of the SDGs.
What is even more interesting is that more than 55 percent of Kenyans have indicated that they will only buy from sustainable companies in 2020. This is clear evidence that if companies, big or small, do not embrace sustainability, their market share will shrink while those that do will thrive.
Other than the gains from market share, sustainability has helped companies to cut costs through use of renewable sources of energy, better usage of materials and better conditions for workers, which reduces staff turnover, which in turn leads to lower costs of hiring.
Sustainability is the new normal and many of the SMEs and even bigger companies are not conversant on where and how to begin. A good starting point will be to carry out a materiality assessment- an exercise aimed at determining what are the most important topics/issues that a company should aim to address.
The determination of these issues should be by management as well as other stakeholders. This exercise helps the organisation to focus on the most value adding topics/issues enabling the efficient uses of time and resources.
Once the material topics have been identified, the management should come up with sustainability strategies. The same process can be applied to determine which SDGs are relevant to a business leading to mainstreaming of ideals into the business strategies and operations.
Investors have been pushing their investee companies to embrace sustainability. Those businesses that are already sustainable are receiving additional financing and at better interest rates than those struggling to mainstream sustainability in their business models.
The call to action for businesses is to reconsider their sustainability agenda. It is the responsible thing to do for the company, for people; for money and for the environment. Climate change, for instance does not help in longevity of companies and if you want your company to go beyond 100 years the time to act is now!
The writer is CEO, Kenya Climate Innovation Center.