What Is Essential To Sustainable Business?

This post has been adapted from a panel discussion held at Nation Builder’s In Good Company conference on 15 August 2019. Freek Robinson chaired the panel consisting of Hendrik Pfaff, Head of Sustainable Business Solutions, WWF-SA, Temba Nolutshungu, Director of the Free Market Foundation and Ndumiso Mngomezulu, Managing Director of The Associates, International Development and Business Strategy consultants.
Robinson asked Pfaff to open the discussion. Pfaff explained that to have a sustainable business you also need sustainable investment. Sustainable business has longevity which requires good management, a great product, good finances, profitability, a happy, productive workforce and the ability to look after natural and environmental resources. Unfortunately, this agenda has been isolated and fragmented for many years. This conference is probably happening because we are, at last, realising this fact. The requirements for sustainable business must be viewed collectively. The WWF will imminently be hosting an international forum to this effect because the world has finally realised that the environment is closely linked to people, society and business. We will only progress and eradicate the problems we face by treating nature, people and business as one.

Nolutshungu articulated a view which differed from one voiced earlier by Mr Roelf Meyer. He felt that the government should respect business at the micro-level. There is trouble in this country; a cataclysm, he said. There are 10 million people that are unemployed. This is not merely a statistic, but is a real problem. Policies which could alleviate the situation are not being instituted. The government should look at success stories from other countries and try to emulate them.

Mngomezulu spoke from a humanitarian angle. First, he said, we must all understand that the unemployment and instability crisis is not merely a South African problem, but is instead global. These social, economic and environmental challenges face the whole world. They need to be dealt with urgently as development goals are currently not being met. Secondly, we need to take a humanitarian approach. “Sustainable business is treated as a mitigating strategy for business to be able to extract and to be able to grow in an unending trajectory without reconciling a lot of the challenges that we’ve got,” explained Mngomezulu. There is no win-win solution; we need to take a people-centric approach to the idea of sustainable development and business if it is going to work.

Robinson asked Pfaff to address the new deal in business and what it will mean in practice. Pfaff replied that services from nature contribute about $125,000,000 annually to global business. This shows the huge connection between people, business and nature. The environmental agenda is greater than rhinos and whales. Discussion is underway regarding the health of business and people since we are totally dependent on our water resources, oceans and products which we harvest from water. Other important elements are air and water pollution, forestry, food security and how we are depleting nature. It is a resource which cannot last forever at the rate we are plundering it.

In order to understand the extent to which South Africa is depleting nature, one needs just to look at the oceans. Coastal goods and services produce 25% of the country’s GDP. Fisheries alone realise R4-billion; marine tourism another R4-billion; harvesting of fish provides 127,000 jobs and harvests 600,000 tonnes of fish. The ocean also supplies 50% of the world’s oxygen. It is, therefore, important to realise that this is ecosystem requires conservation or we may not be able to extract such high value from it in future. Another threatened element is the world’s forests. These supply 20% of the world’s oxygen and absorb 2.2 billion tons of carbon annually. Only sustainably produced products should be purchased. We must become aware of whether our paper and other products are drawn from a sustainable source. Otherwise, we may be contributing to the destruction of the environment. Nature supplies livelihoods, raw materials and food upon which we rely.

Robinson asked Mngomezulu to comment on reconciling the country’s challenges and business being more people-centred while reducing our effect on the environment. He replied that business is a constantly evolving concept rooted in the capitalistic system. Therefore, in reconciling between people, planet, the social element and business one must take a dialectical approach. There cannot be a win-win solution; somebody will lose. Well-meaning people are looking for ways to solve the problems apparent in communities around them. “But you are not asking yourself: how am I complicit in perpetuating inequality?” suggests Mngomezulu. Are you derogating the environment by consuming more than the planetary boundaries? That, then, is where you should start putting matters right.

Nolutshungu had been critical of something said by Roelf Meyer in an earlier address. Robinson asked what he felt was the role of the private sector in South Africa, given the challenges we face.

“What we want to achieve is a situation where there is no unemployment situation at all…because if you look at Mauritius…they have an employment problem,” Nolutshungu replied. Mauritius has programmes to entice skilled people to work there since introducing their Free Market policies. The bottom line in business is the pursuit of profits without which there will be no employment nor taxes paid. He said the government should leave businesses without constraints if it wants them to reach the heights to which they aspire. There should be incentives to induce business to forge ahead, but constraints make us globally uncompetitive. We need investors to come into the country but they are naturally interested in profit which cannot be realised under the current limitations.

Mngomezulu asked if Nolutshungu could name any country which had grown from Free Trade Initiatives alone. He claimed capitalism is the cause of the mess which the world is currently experiencing. Inequality is a global problem generated by capitalism.

Robinson asked Pfaff how we can reconcile the problems in this country, investing particularly in the environment. Pfaff replied that he supported responsible capitalism fully; it is the sustainable road. There is more than R8-trillion invested in markets, pension funds, and savings in South Africa, while internationally there is $100-trillion invested in markets. But are we investing in responsible businesses or in enterprises which are destroying the environment? We should be aware of whence our returns devolve. Some people want maximum returns for minimum input, irrespective of their origins. Others investigate the companies they invest in, ensuring they are not proliferating bad business practices.

Nolutshungu described how China had turned its economy around by permitting Free Market practices in certain zones after dismantling the agricultural communes. This sparked private enterprise and lifted the nation out of poverty. In South Africa the Government may be the disease and not the cure; State-Owned Enterprises are a case in point. They are a bottomless abyss while those running them are not answerable for their mismanagement.

Robinson asked Mngomezulu to comment on one of South Africa’s biggest problems, the youth. Mngomezulu replied that we have one of the highest unemployment rates across the world and that he, himself, is a product of Social Corporate Investment. Young people need to address the causes of unemployment and not allow themselves to be marginalised.

Pfaff concluded that we must reach a point where we work together to find solutions. All the points discussed are inherently connected and it is only by working together to solve the problems of the environment, unemployment and poverty that we can make a difference.

Nation Builder is a platform that equips and inspires businesses to have a positive social impact in South Africa. As part of the Mergon Group, they collaborate across sectors to co-create resources that assist businesses in their social development work. They host regular events that bring together people who are committed to using their business as a force for good, and their continuous research is aimed at supporting business to partner well with non-profit organisations and the government, in order to build a prosperous South Africa. Contact them for more information, or join their community for free by completing an online social impact assessment.