SUSTAINABILITY
Adopting Sustainable Practices Key To Longterm Success For SME ’ s
By Lim Hazel
According to the United Nations Economic Commission for Africa ( UNECA ), African countries face significant environmental and social challenges , including climate change , biodiversity loss , deforestation , water scarcity , and poverty . These challenges pose a threat to economic growth and sustainable development in the region .
To address these challenges , African countries have made commitments to the United Nations Sustainable Development Goals ( SDGs ), which provide a roadmap for sustainable development . In addition , the African Union has launched Agenda 2063 , which is a long-term strategic framework for the socio-economic transformation of the continent .
According to a recent poll done by the world economic Forum ; 88 % of institutional investors put Environmental , Social , and Governance ( ESG ) at par with operational and financial considerations when making investment decisions ; 60 % of employees choose a place to work based on their beliefs and values , while 58 % of consumers buy or advocate for brands based who match their beliefs regarding sustainability .
Due to the overall growing awareness of the importance of sustainability practices in Africa , initiatives are being undertaken to promote sustainable development in the region , with a special focus on Small and Medium Enterprises as an integral contributor to the growth and development of the African continent , being the industry that creates more jobs annually .
Sustainability reporting has become an integral part of the business ecosystem in the recent past since investors are not only interested in supporting businesses that meet existing demand but also businesses that are both scalable and sustainable .
Investors are attracted to companies that prioritize environmental , social , and governance practices because they believe that these companies are more likely to be sustainable and responsible .
ESG-focused companies often have a better reputation and are more transparent , which can lead to increased trust from customers and other stakeholders . Additionally , ESGfocused companies may be more efficient and have a lower environmental impact , which can lead to lower costs and improved
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Sustainability reporting has become an integral part of the business ecosystem in the recent past since investors are not only interested in supporting businesses that meet existing demand but also businesses that are both scalable and sustainable . financial performance .
ESG risks are becoming more and more relevant for investors , and companies that are not able to manage these risks can be exposed to negative financial impacts . ESG risks can include a wide range of factors such as climate change , human rights , and data privacy , which can significantly impact a company ’ s operations and financial performance .
Investing in companies that prioritize ESG practices can mitigate these risks and potentially achieve higher returns in the long run .
Additionally , with a lot of efforts geared toward addressing issues of climate change and attaining sustainability , ESG investing is becoming more mainstream , and investors are under pressure to align their portfolios with their values and beliefs . Therefore , many investors are attracted to invest in companies that mainstream sustainability practices as they align with their values .
Benefits of adopting Sustainability practices
Adopting sustainable practices can ensure long-term success for small and mediumsized enterprises ( SMEs ) in several ways :
Saving on costs
Sustainable practices such as energy and water conservation , waste reduction , and eco-friendly product design can lead to cost savings for SMEs . For example , reducing energy consumption can lower electricity bills , while reducing waste can decrease disposal costs .
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