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Sustainable Development ~ A Scorecard of Progress & Pitfalls

Author: Wayne Visser ~ Sustainability specialist, author, speaker & consultant

( Article Type: Sustainable Development )

There is no doubt that business is doing far more than ever before to tackle the sustainability challenge. Evidence appears in plain sight: a plethora of voluntary codes, management systems by the truckload, volumes of sustainability reports, socially responsible indices and funds, and an increasingly conscious business press.

Even so, all of this activity has failed to turn the tide on some of the most crucial inhibitors to sustainable development: ecological decline, poverty, greed, trust, and hope. The first part of this article presents a few facts and figures to illustrate these sustainable development imperatives that remain unmet.

The second part of this article highlights the significant progress that has been made by the private sector, as well as the potential for South Africa to continue to shape a new agenda for capitalism across seven key dimensions: legal reform, corporate governance, socially responsible investment, HIV/Aids response, niche excellence, partnership, and values-based philosophy.

Five sustainable development gaps

The Eco Gap

  • A billion people depend on fish for protein, yet 75% of the world’s fisheries are over fished or fished at their limit;
  • More than 40% of the world population live in waterstressed basins and 65% of global agricultural lands show soil degradation.

The Poverty Gap

  • 54 countries are poorer now than in 1990; in 21 of those countries a larger proportion is going hungry; in 14, more children are dying before the age of five; in 12, primary enrolments are shrinking; in 34, life expectancy has fallen.
  • Sub-Saharan Africa would not attain the goals for poverty reduction until 2147, for child mortality until 2165, and for HIV/Aids and hunger, trends in the region are heading up, not down.

The Governance Gap

  • The pay ratio between average workers and large company CEOs surpassed 300-to-1 in 2003, up from 282-to-1 in 2002 and just 42-to-1 in 1982.
  • It would take one Haitian worker producing Disney clothes and dolls 166 years to earn what CEO Michael Eisner was earning in one day in 2001.

The Trust Gap

  • Global companies are the world’s third-least trusted institutions in the world and large national companies are the second-least trusted.\
  • Executives of multinational companies are the second-least trusted of eight categories of institutional leaders.

The Existential Gap

  • Two-thirds of all 18- to 35-year-olds are unhappy at work, and the proportion rises to 83% among 30- to 35-year-olds.
  • One in 15 has already quit the rat race and 45% are seriously contemplating a career change.

South Africa’s scorecard

In light of these challenges, what progress has South Africa made along the journey of sustainable development? In fact, within the space of a decade, South African business has moved from being pariahs of the world to leaders in this global corporate responsibility movement. The following key points highlight the progress already made and present an aspirational outlook for the next 10 years.

 

In the last 10 years:

  • South Africa has introduced some of the most progressive legislation in socio-economic and environmental development in the world, backed by its Bill of Rights.
  • By inextricably linking social, economic and ecological development in its legal framework, South Africa is showing the world that the old conflicts between environmental conservation, social development and economic growth can be resolved by adopting a new model of integrated sustainable development

In the next 10 years, we can expect to see:

  • Civil society demonstrating increasingly healthy activism to bring about environmental and social justice
  • Government continuing to enact and refine progressive legislation and to enhance its enforcement capacity;
  • Business becoming the primary vehicle for ensuring that integrated sustainable development is delivered on the ground.

Corporate governance

In the last 10 years:

  • The King Report on Corporate Governance in South Africa has led the world through its inclusion of the stakeholder concept in 1992 and integrated sustainability reporting in 2002.
  • Surveys by KPMG show 85% of South Africa’s top 100 listed companies in 2003 were already reporting on sustainabilityrelated issues, compared with only 48% in 1997.
In the next 10 years, we can expect:
  • South Africa’s top companies to achieve full compliance with King II, proving that they have among the best corporate governance practices in the world;
  • The influence of South Africa’s corporate governance agenda to spread throughout Africa, contributing to the African Renaissance;
  • Civil society begin to employ the underlying corporate governance principle of transparency in order to uphold their constitutional rights.

Socially responsible investment (SRI)

In the last 10 years:

  • South Africa has introduced more than 20 SRI funds nationally, with almost all of them using a screening approach to bring about constructive change.
  • In May 2004, the Johannesburg Securities Exchange launched its own tradable SRI Index, based on the triple bottom line approach of environmental, social and economic sustainability, underscored by good corporate governance, making it the first of its kind in an emerging market.

In the next 10 years, we can expect:

  • South Africa to attract significant international investment through its alignment with global SRI funds and sustainability indexes;
  • The JSE SRI Index to become a benchmark for all emerging markets to engage in the SRI movement; A ‘race to the top’ by South African companies competing for good rankings on the South African and global SRI indexes.

HIV/Aids response

In the last 10 years:

  • The South African Business Coalition on HIV/Aids (Sabcoha) is leading the way in tackling the pandemic, and played a leading role in the drafting of the Global Reporting Initiative’s Reporting Guidelines on HIV/Aids.
  • Anglo American showed itself to be a global pioneer when, in August 2002, they announced that they would enhance their HIV/Aids wellness programmes by making antiretroviral therapy available at company expense to HIV-positive employees.

In the next 10 years, we can expect:

  • The vast majority of South African companies to have developed an HIV/Aids policy and a programme to address the disease in the workplace;
  • Progressive South African businesses continuing to take the world lead in developing and sharing solutions for combating the disease;
  • Significant turnaround statistics that show the spread of Aids in southern Africa being halted and reversed, thereby giving hope to the rest of the continent and the world.

Niche excellence

In the last 10 years:

  • In a number of specific areas, South Africa is demonstrating that it can blaze a trail for responsible business worldwide.
  • Examples include Sasol’s eco-friendly technological innovations, Spier Wine Estate’s embedding of sustainability principles, and Collect-A-Can’s remarkable recycling achievements and empowerment through job creation.

In the next 10 years, we can expect:

  • South Africa to become a hotbed for social and environmental entrepreneurship;
  • South African multinationals to become increasingly recognised for global best practices in social and ecological design;
  • Certain niche sectors in South Africa, such as organic farming and catalytic converter manufacturing, to become global centres of excellence.

Partnership

In the last 10 years:

  • The South African private sector has shown itself to be both willing and able to engage in partnership with various sectors of society to bring about social transformation.
  • Pioneering examples include the Urban Foundation, the Consultative Business Movement, Business Against Crime and the National Business Initiative.

In the next 10 years, we can expect:

  • South African companies being at the leading edge in helping government to address the Millennium Development Goals;
  • South African business continuing to forge new and innovative public-private partnerships to achieve social ends;
  • South Africa, especially top executives, increasingly playing a role in brokering key global bridge-building initiatives, such as between the World Economic Forum and the World Social Forum.

Values-based philosophy

In the last 10 years:

  • Along with the wave of black economic empowerment, the values-based philosophy of African humanism (ubuntu) has begun to transform the corporate culture in South Africa towards a more people-centred style, which is inclusive, participative and integrity-based.
  • South African business is in fact the crucible in which a new model of capitalism is being forged, one that transcends the divisions between First and Third world, one that integrates economic, social and environmental goals, one that balances shareholder returns with stakeholder returns, and one that brings the heart and soul back into the workplace

In the next 10 years, we can expect:

  • South African companies to continue to break new ground and find new ways to express ubuntu in the workplace;
  • South African business to be regarded by the rest of the world as pioneers in embedding responsible, ethical and sustainable practices in their business culture;
  • South Africa to take the lead in beginning to shape a new model of free enterprise in the world, one which may even become known as ubuntu capitalism.

Conclusion

This is a plea for us not to be complacent about corporate sustainability. Much has been achieved, but the most fundamental challenges remain. Let us not fool ourselves into thinking that we have turned the titanic around, when the iceberg still looms large straight ahead. But to change course, we need to reconnect with our passion for the sustainability ideal. Our predicament is not something we are going to rationalise or engineer our way out of. We need visionary leadership, heartfelt commitment and enduring hard work. And each of us, in our own way, in our own place, has a contribution to make.

We see that across a range of issues, from legal reform, governance, SRI and HIV/Aids to partnerships, niche excellence and values-based philosophy, South Africa has laid the platform for some truly remarkable achievements in the coming decade. I fully expect that South African business will be heralded as global leaders in all of these highlighted areas in the next 10 years and that we may indeed be instrumental in writing a new chapter in the story of capitalism, which may yet prove to be our most significant legacy for the world and all its people.

(This article is a condensed synthesis of two articles: ‘Five Corporate Sustainability Challenges That Remain Unmet’ (Ethical Corporation, Issue 31, July 2004), and ‘Sustainable Business Futures: Setting the Global Agenda for Corporate Responsibility and Ubuntu Capitalism’ (South Africa 2014: The Story of Our Future, edited by Bret Bowes, Guy Lundy and Steuart Pennington, SA Good News, Johannesburg, 2004).
Both articles appear in full in Wayne Visser’s book, Business Frontiers: Social Responsibility, Environmental Sustainability and Economic Justice, ICFAI Press, 2005. For more information, see www.waynevisser.com)