This is the ‘Decade of Action’, which calls upon all stakeholders to accelerate efforts to attain the United Nations Sustainable Development Goals (SDGs). The SDGs aim to tackle poverty and climate change challenges and close the financial gap among the world’s most vulnerable communities.
However, a UN SDGs report released in 2023 showed that we are still behind schedule in achieving the goals, with only 15% of the goals targets on track despite the 2030 deadline.
The ‘Decade of Action’ is a call for all institutions, including the private sector, to implement policies and regulations that support the achievement of the Global Goals by 2030. This shift has led to companies adopting Environmental, Social and Governance (ESG) principles as a guiding force for their operations. The consistent application of ESG principles not only leads to business growth but also empowers us to be a force for good. A study by Ipsos revealed that the majority of people believe that private organisations can make a profit while supporting communities, reinforcing the power of the private sector in driving positive change.
Adopting ESG principles is crucial for business growth. Addressing social and environmental concerns while implementing watertight governance structures can elevate our organisations.
One key highlight of ESG’s impact on business is its ability to attract more investment and opportunities. Governance structures that promote transparency earn a reputation among our customers and potential investors. The push towards achieving the SDGs is challenging for established businesses since it involves channelling a lot of investment and resources into their operations.
Partnerships are not just a key, they are the bridge that can help us overcome the challenges. By aligning with like-minded entities, we can secure investment opportunities. Maintaining a strong reputation and being accountable to ourselves and others is crucial. Transparent governance structures can pave the way for expansion and growth.
ESG offers us a unique opportunity to connect with communities. Investing in their most pressing social needs can foster unwavering loyalty and consistency towards our brands. Reinvesting in communities, especially the vulnerable, through social programmes gives us a social license to operate and builds reliable relationships that lead to a strong brand affinity.
In the environmental space, organisations’ expectations have increased for responsible production and consumption. The consequences of climate change are pronounced, especially in our continent, as sustainable business practices supporting environmental stewardship are a catalyst for growth. In a report released by the Global Commission on the Economy and Climate in 2018, climate initiatives should generate profits of $26 billion and create 65 million new jobs by 2030.
The push to adopt clean energy is an avenue for employment opportunities. According to the International Labour Organisation (ILO), in 2022, employment in the renewable energy sector hit 12.7 million jobs globally, with the taking up of solar energy among domestic and business interests being cited as the leading front of job creation.
Investing in the environment is a pathway towards partnerships that elevate an organisation’s platform while being responsible for job creation opportunities. Environmental stewardship also makes business operations more affordable, thus making them sustainable.
As much as we advocate for ESG alignment in our business operations, challenges remain. Considerable investment is needed to make businesses ESG compliant, especially in the social and environmental space. Challenges also lie in getting full backing from internal and external stakeholders to rejig business operations to meet the required standards.
Partnerships with private and public players can help us accomplish our ESG agenda and tackle these hindrances. Stakeholder engagement and consultation are also vital for winning support from stakeholders to establish long-standing ESG principles in our business.
At Watu, we have consistently built sustainable business practices. Our ESG agenda is supported by three pillars: financial inclusion, road safety and health, and climate action. Through these pillars, we have positively impacted over 8 million people across seven African countries by providing financing solutions, investing in e-mobility, and giving back to the community through rider training, literacy forums, and education programs.
Andris Kaneps, the writer, is the Group CEO and Founder at Watu Credit.
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