Spotlight on ESG

Over time, the element of environmental, social, and governance (ESG) issues has developed into a crucial component of any soundly governed corporate.

Nowadays, it is a medieval practice, amoral, and unsustainable for a business to prioritise only the bottom line over the community and environment in which it operates.

The concepts of ESG advise 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 corporates 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 offices and corporate social investment (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 social greenwashing tactics employed to parade companies as caring and responsible, while they are in fact 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, of which the focus is still on solely securing the bottom line and satisfying shareholders’ high appetite for returns on investment (ROI).

ROI is influenced by business strategy, i.e. how and to what extent a company siphons value out of its capital.

Nevertheless, let us briefly illuminate human and natural capital and their contribution to business success.

Human capital involves people – society.

Without them, businesses would not exist.

Companies thrive on the patronage they receive from the societies in which they do business.

Natural capital involves 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, sheer threat would 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.

Sustainability is and will remain a perpetual endeavour, and corporates must look into crafting holistic ESG frameworks upon which sustainable practices will be based.

Admittedly, we have companies whose ESG efforts are commendable, signalling that corporate Namibia is heading in the right direction.

It would, however, be partial not to acknowledge that a significant number of corporates 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 that they align and explore viable CSI areas to collaborate.

Through this, a meaningful socio-environmental impact will be recorded.

Erasmus Nekundi