Over time, the element of Environment, Social and Governance (ESG) has developed into a crucial component of any well-governed corporate entity.
Nowadays, it is a medieval practice, amoral, and unsustainable for a business to prioritise only the bottom-line over the community and environment it operates.
The concepts of ESG guide organisations to embrace the principles of good governance and provide pathways for the implementation of sustainable social, economic, and environmental support for the benefit of society. For a very long time, many corporations concentrated on the accumulation of financial capital.
However, there has been a discernible shift in the status quo, indicating that the fundamentals of sound governance, particularly in ESG, are being appreciated with corporates introducing dedicated ESG office(s) and CSI programmes.
While this shift is welcomed, a reflection on a Forbes article on ESG by Benjamin Laker, by some means informs that some companies’ CSI activities are mere socio-greenwashing tactics employed to parade companies as caring and responsible, while in fact, they are superficially adopting sustainable ESG practices that lack intent and genuine conviction to make a real impact.
It is dreaded that socio-greenwashing is a rudimental optional practice likely to be adopted by many capitalist entities whose focus is still glued on solely securing the bottom-line and satisfying shareholders’ high appetite for Return On Investment (ROI).
ROI is, of course, amongst others, influenced by business strategy, i.e. how and to what extent a company siphons value out of its capitals. Nevertheless, without disregarding other business capitals and digressing from ESG subject, let us briefly illuminate Human and Natural capitals and their contribution to business success. Human capital is the people, the society, without whom businesses will not exist.
Companies thrive on the patronage they receive from the societies in which they do business. Natural capital is the environment. It is critical that companies create and maintain a healthy relationship with the environment.
Otherwise, should they be reckless and destroy the environment by engaging in unsustainable business activities, then sheer threat will not just be guaranteed to future business continuity but to our overall social welfare. A green environment is essential for human and business well-being.
For all intents and purposes, sustainability is and shall remain a perpetual endeavour, and corporates must look into crafting holistic ESG frameworks upon which sustainable practices will be based and guided. Admittedly, we have companies whose ESG efforts are earnestly commendable, signalling that corporate entities in Namibia are heading in the right direction.
It will however be partial not to acknowledge that a significant number of corporations in Namibia still need to onboard the ESG cruise and genuinely contribute to effecting a positive impact on society and the environment. It is only sound governance if you are ethical in your dealings with people, society, and the environment.
Lastly, as more companies are starting to appreciate ESG, it is essential, and for a great impact, that they align and explore viable CSI areas to collaborate. Because it is through this that meaningful socio-environmental impact will be recorded.
* Erasmus Nekundi is a Communications Practitioner. The views expressed in this article are personal and do not reflect those of any other party.
