eBusiness Weekly
Tawanda Muzamwese
The leadership of an organisation determines its destiny and prosperity. In the 21st century risks facing businesses are on the increase.
Companies have had to wake up to changes in the business requirements as the supply chain gets tighter on firms that are not sustainable in their operations.
It is normally easier to look elsewhere for answers and blame-game becomes the order of the day.
However, the chief executive officer, managing director and executive teams are required to take action on sustainability and lead their employees to follow the requirements of the modern market.
Boards of directors provide leadership and governance on matters related to an organisation and it is now necessary that boards respond to the environmental pressures that companies face as well as provide the much needed oversight and strategic direction in order to encourage green practices.
Board meetings are evolving in many places and countries as boards are finding time to discuss not only the traditionally covered issues such as financial performance, operational performance, growth of the business and risks management but also there is incorporation of new issues that have an effect on the reputation of the organisation if not addressed.
Whilst some boards and CEOs have realised that sustainability has become a core element of the business strategy, few companies have already made sustainable development an agenda of board proceedings.
These issues may include but not limited to Environmental and Social Governance (ESG) and Global Reporting Initiative (GRI) Sustainability Reporting disclosures. Enterprise Risk Management has long been recognised as a key element of managing business risk.
Therefore, expanding its scope to touch on environmental and social governance is necessary.
The next time a board member enters into a boardroom, it is necessary to remember that risks associated with the environment are essential to be understood by the business.
Companies have been shocked to see an article related to their pollution practices appearing on the front page of a news tabloid.
Others have been surprised to see their water sources dwindling due to climate change. Board members have also been called in the middle of the night when a company is involved in serious incidents such as death of employees in the workplace as well a property damage.
Some of these issues can be prevented if the company’s highest governance body considers them as material to the progression of the business.
A chief executive officer is essential in leading the organisation on day to day basis and providing leadership to employees.
Leadership in Occupational Safety Management, Leadership in energy efficiency as well as leadership in environmental management are necessary to ensure business benefits are accrued.
If a CEO ignores the fact that he or she needs to promote a “safety culture” within the workforce there may be serious injuries and fatalities in the workplace which he or she may be accountable.
There is an increased recognition of the concept of “duty of care” and “due diligence” which entail executives to show evidence that they had measures in place to avert occupational hazards.
The modern day executive must realise that there are numerous examples such as those demonstrated by Occupational Safety and Health Authority (OSHA) and Health and Safety Executive (HSE) which are regulatory bodies in the United States and UK respectively and have had to summon corporate leaders to explain the circumstances surrounding serious occupational accidents. In brief, the CEO is responsible for providing a safe workplace.
In Zimbabwe regulations such as the Factories and Works Act 14:08 clearly make it a point that the employer must provide safe working environment as well as provide Personal Protective Equipment (PPE).
This entails that the employer as represented by the presiding CEO should make sure that all the preventive measures are in place in order to enhance workplace productivity.
With regard to environmental sustainability, CEOs are taking great strides in the positive direction by signing up for international and local initiatives that help their companies to adopt sustainability.
Tools that can be used by the executives and board members in order to instil a sustainability culture in the organisation are vast and wide.
The World Business Council for Sustainable Development (WBCSD) is a CEO driven organisation, which is represented by Business Council for Sustainable Development Zimbabwe (BCSDZ) has released various tools for use by companies across the world.
Companies whose CEOs participate in such initiatives have transformed their processes into green and cleaner ones thereby realising significant benefits in resource usage, cost savings and legal compliance.
Globally the CEOs Water Mandate has gained momentum and is being implemented in different sectors of the economy. The WBCSD has recently launched the CEOs Guide to the Sustainable Development Goals (SDGs).
This tool helps Executives to find strategies of how to align their business practices to the SDGs. Additional tools include the SDGs Campus Guide, which is freely available to provide information on how companies can align their strategies to sustainable development.
Through the guidance and leadership of forward looking CEOs companies have started signing up for the United Nations Global Compact, which has been accepted by many companies such as Akzo Nobel, Bayer, Coca-Cola, Dow Chemical Company, Eskom, Heineken, Microsoft, Nedbank, Nike, PepsiCo, Wilmar, Unilever, Veolia amongst others.
Zimbabwean CEOs cannot afford to wait any longer when it comes to adopting sustainability and championing it in their own businesses.
With the opportunities for expansion and growth abound, leaders of enterprises are expected to understand a broad range of issues and be able to deal with them before they are out of control.
An example that may arise is an organisation whose activities generates dust to the environment. If there are no dust control measures the issue can go out of control and attract negative publicity.
With regards spillages of hazardous chemicals into water bodies or during transit, it is becoming increasingly common for corporate executives being answerable for the actions of their companies.
In order to avoid unnecessary problems corporate executives can already reform their organisational structures by appointing individuals with sustainability knowledge or delegating responsibility to a specific department or setting up a sustainability division to manage sustainability affairs.
This proactive approach has facilitated prevention of environmental, social and occupational health and safety disasters.
Boards of directors should increasingly demand that those at the helm of companies demonstrate to the board that they are playing their part in managing environmental and occupational safety and health risk.
In some cases boards can require CEOs to facilitate disclosure of sustainability performance of the organisation.
Sustainability of a firm is not only based on financial success of the business but also on the environmental stewardship and social equity practices.
Boards may have to enhance their demands to CEOs who in the short term prioritise paying fines for environmental breaches than to implement environmental management programmes at company level. Education and training of board members is also necessary to broaden their understanding of sustainability.
In order to assess the progress that your organisation is making towards main-streaming sustainable development it is essential that the organisation, board and CEO ask themselves the following pertinent questions:
(1) Is sustainability a priority within our organisation or we are satisfied with making profits at the expense of environment and society?
(2) Does the Board of Directors discuss sustainability as part of the agenda of Board Meetings?
(3) Has the Board of Directors identified any metrics to evaluate sustainability to the business that it can use as a framework of evaluating progress from one board meeting to the other?
(4) Is there a specific committee within the board that looks into the sustainability performance of the organisation?
(5) Does the Chief Executive Officer show interest, leadership and commitment to sustainability?
(6) What sustainability risks does the company face and which specific stakeholders have sustainability needs to be addressed?
(7) How often does the Board make recommendations relevant to the sustainable development of the company?
(8) Does the company’s Annual Report and Corporate Disclosures include Sustainability Reporting and disclosures for accountability and transparency?
Answering these questions could be a starting point and stepping stone to transform the way your organisation does business.
In the world where sustainability has become a pre-requisite for business, the time is now to embrace sustainability and change the way we do business. It is no longer business as usual but business unusual.
If your organisation is unsure or ill-equipped to mainstream sustainability, get technical assistance from able experts for Board Training on Sustainability or hire competent employees in the area of sustainability. It is never too late to start your sustainability progression!
Tawanda Collins Muzamwese is an international consultant, trainer and auditor in sustainability. Chief Sustainability Consultant at Toxiconsol t/a African Sustainability Consultants. He leads the development and implementation of Safety, Health, Environmental and Quality Management (SHEQ) Systems for various companies. He is also an Executive Director of the Business Council for Sustainable Development Zimbabwe (BCSDZ). A Certified AA 1000 Associate Sustainability Assurance Practitioner for assurance of sustainability reports, Cleaner Production and Green Industry Expert. He can be reached [email protected] 0773472697.
