By Johnson Manyakara

I’m unaware of any research carried out on Boards awareness of Sustainable Development Goals (SDGs) and responses thereto in Southern Africa. According to the Global Opportunity Report 2016, a report on the results of a survey carried out on CEOs on both dimensions, 32% of CEOs surveyed were aware of SDGs and 23% of them were reported as planning a response on the SDGs. Although the survey was not directed at Board members, most CEOs are Executive Directors on their organisation’s boards and, therefore, the survey results can be safely representative of Board members in terms of level of awareness of SDGs and planned responses to the goals.

What Is Sustainable Development?

The World Commission on Environment and Development (1987) defines Sustainable Development as –

“Development which meets the needs of the present without compromising the ability of future generations to meet their own needs”.

Clearly, organisations have, or should have, a purpose beyond simply being profitable!

The global 2030 Sustainable Development agenda was ushered in in December 2015 at the end of the Millennium Development Goals (MDGs). Sustainable Development in organisations is anchored on balancing three pillars in business operations, namely, Profits (i.e. Economic pillar), People (i.e. the Social pillar in terms of benefits to staff in the business and benefits to communities) and Planet (i.e. the Environmental Pillar), an accounting framework for measuring organisational performance commonly referred to as the Triple Bottom Line – the 3Ps. Embracing this framework will not only provide organisations with a model for responding to some of the SDGs but it will also ensure that organisations achieve their business growth objectives in a manner that “meets the needs of the present without compromising the ability of future generations to meet their own needs”.

The Role of Boards

Pressure related to Sustainable Development is being put on Boards through new regulations and “licences to trade” in some markets being granted or withheld on the basis of the extent to which companies embrace Sustainable Development thinking and practice. Most Boards today are increasingly aware of the environmental and social impact their decisions are having but, alas, few Boards are moderately engaged with the Sustainable Development agenda. This begs the question, “Do Boards want to leave the planet in a worse condition than when it was given to us by our forefathers?”

The Sustainable Development agenda is now a strategic imperative and, as such, Boards should aspire to inspire their organisations to contribute towards business growth initiatives that meet the needs of stakeholders without compromising the ability of future generations to meet their own needs. Below are some of the areas in which Boards should play a role in furtherance of the Sustainable Development agenda.

Governance for Sustainable Development

Any responses to the sustainable development agenda that are not founded on a sound governance structure are bound to fail. Governance for a sustainable development response in an organisation can be structured along any of the following lines:

• Oversight provided by the full board;
• Oversight provided by a board Risk Committee; or
• Oversight provided by a specialist Sustainable Development Committee.

Best practice also suggests that organisations can form coalitions with like-minded organisations to share and promote the sustainability cause.

Sustainable Development Dashboard  

While the  3Ps tool for responding to the Sustainable Development agenda is a powerful one, it will not fully give organisations the intended outcomes without a calibration of an appropriate performance dashboard that will facilitate performance tracking. Boards should, therefore, play an oversight role in this regard. While the traditional measures of the financial health of the organisation (i.e. revenue growth, profitability, return on capital employed, etc.) will suffice for the Profit pillar, creative thinking is required in calibrating measures for the People (i.e. staff and community) and Planet (i.e. environmental) pillars.

Possible dimensions to consider for the People pillar include share options for Senior Management and dividends through an Employee Trust for middle management and below. Learning and Development measures for all levels of staff may also be considered. For the community, a good number of organisations are already doing a splendid job through various CSR initiatives. These need to be quantified, however.

For the Planet pillar, SMART goals are required around waste management, energy consumption, water consumption, air quality, etc. Major projects should also be preceded by Environmental Impact Analyses. The various eco-initiatives such as recycling wherever possible, use of biodegradable cleaning agents, composting all biodegradable waste etc., should be considered.

Building a Sustainable Development Culture

Building a Sustainable Development culture in the organisation should take centre stage. The Board is ultimately responsible for the organisation’s strategy. Boards should, therefore, strive to build a Sustainable Development culture by ensuring all 3Ps considerations are holistically integrated into the organisation’s strategy. This sets the tone at the very top.

While economic performance (i.e. Profits) is a key driver of business sustainability, Boards also need to prioritise social (i.e. People) and environmental (i.e. Planet) factors.