By Ndidi Nnoli
The Nigerian Stock Exchange (NSE) recently launched Sustainability Guidelines in a forum called “Shared Goals, Shared Future”. This triggered my reflection on sustainability as “building upon the resources and heritage of past generations, to meet the needs of present generations, without compromising the ability of future generations to meet their own needs.” (Nnoli-Edozien, 2006:8). I had then argued that culturally, socially and economically many African identities understood property as a natural right and thereby a human right. Indeed, the Igbo understanding of ownership – as the basis of wealth – was aligned with communalist concept of “I am because we are, and since we are, therefore I am” as embedded in the concept of ‘Omenala’. This made everybody a stakeholder, rather than strangers in their community. In other words, private property in traditional society implied ‘trusteeship’ and conferred a right of ‘access’ and of ‘use’ in a proximate, not ultimate sense (Nnoli-Edozien, 2006: 10; Ike/Nnoli-Edozien, 2001: 106; Gluckman, 1977:42). According to my research at the time, the traditional African approach to business management intuitively protected stakeholder interests (past, present and future) whilst acknowledging the responsibility of private interests towards natural resources, which belonged to the entire human community. In other words, traditional Africa was once intuitively ahead of her time. I truly believe we need to reflect on our past and look inward, in order to leapfrog and succeed going forward.
Two decades ago sustainability was still considered somewhat peripheral by many listed businesses. It was perhaps cited when discussing the reduction of energy consumption, recycling initiatives, community empowerment, initiatives to ‘save’ the planet, and good causes to empower women, youth and children. In recent times however, there has been a big shift with regard to mainstreaming sustainability as core to business operations, even in evaluating leadership capabilities. Forward-thinking companies are now developing business strategies and corporate cultures that embody sustainability as central to business modelling, growth and risk management. New business principles like ‘circular economy’ have emerged – whereby environmental concerns, that impact all stakeholders, are interrelated with operational efficiency that benefits shareholders. As such, we increasingly track business profitability alongside its impact in economic, environmental or social terms. Managers, investors and financiers alike place higher weighting on environmental, social and governance factors in evaluating the creditworthiness and risk of investment options. Sustainability has become more tangible and visible in the business world.
Companies are also being held accountable by a wider range of stakeholders, alongside shareholders. Terms like ‘social license to operate’ infer the emergence of host communities as core stakeholders. Data abounds to make a business case for the introduction of responsible business policies and sustainable business practices which result in better sales, improved customer loyalty and deliver more sustainable brands, products and organizations. The GBF-Unilever Nigeria Women Empowerment Programmes at the Bottom of the Pyramid is a case in point – whereby 2500 rural women contributed over N3billion to its annual sales turnover, whilst also impacting communal health, wealth and nutrition. Within corporations, Human Capital is also increasingly attracted, engaged and incentivized through leading Sustainability Indicators. Top Talent often cite businesses furthering the ‘doing well by doing good’ agenda as a strong reason for employee loyalty. In summary, businesses now have the opportunity (and responsibility) to contributeS directly towards building inclusive, resilient and sustainable economies as well as extending sustainability best practices through their value chains and supply chains.
The United Nations Sustainable Development Goals (SDGs) also clearly acknowledge the critical role of business, beyond the responsibility of governments, in promoting prosperous economies and inclusive growth. This global approach may even foster the ideal economic model to achieve the idealized ‘Wealth of Nations’. Possibly it is “sustainability” that was the missing ‘capability’ (Amaeshi & Nnoli, 2018) in Adam Smith’s ‘invisible hand’; and if so, ‘Sustainability Thinking’ may now be well positioned to guide that ‘hand’ to serve stakeholders and shareholders alike?
I commenced work in the sustainability space as Founder of the Growing Businesses Foundation (GBF) in 1999. Two decades ago, through GBF, I was privileged to witness the synergy and catalytic impact made possible when business leaders take on the role of responsible global citizens. I quickly learned that when inspired leaders engage to serve stakeholders (and not just shareholders), their functional heads respond by designing creative and innovative solutions to serve the common good, long-term.
The ‘Sustainability Action’, which ensues, enables both local and global economies thrive alongside securing the well-being of businesses, people, communities and planet. Everybody becomes a winner. As such, from my experience, businesses have always been in the strongest position to close economic inequalities and promote inclusive growth, by improving per-capita wealth and prosperity in tandem with business profitability. Starting with GBF I quickly learned that those approaches which link social and economic prosperity with operational efficiency and financial profitability are the more sustainable success stories.
I joined the Dangote Group exactly two years ago. I had previously resumed at the Lagos Business School as Faculty, for the second time hoping to find the quiet time to document and publish the 7 Sustainability Pillar Methodology which I had started to crystallize during my PhD (2004 – 2006). The rare privilege of applying the 7Pillar Methodology at Africa’s largest business as the Group Chief, Sustainability & Governance, has been insightful. I have been privileged to drive the Operationalization of Sustainability across the business, commencing with NSE Premium Board listed Dangote Cement Plc (DCP) as pioneer.
Adopting the 7Pillar Methodology requires every aspect of the business to become involved in the agenda to build a sustainable global brand. DCP proved to be perfectly primed to embrace this transformational approach to operationalizing sustainability. The ensuing 2018 Sustainability Report shows an approach centered around people and systems which involves all business functions including Operations, Marketing, Finance, Risk, Community Relations, Health & Safety, Environment, Social, Procurement, Human Resources, Communications, Internal Audit, Legal and Compliance. The Sustainability Champions created a community connected by shared interests and values, aligned through the Cultural Sustainability Pillar which defines a common language and optimizes shared capabilities. Beyond our ‘local’ actions, Sustainability Thinking and Reporting at Dangote is centered around the global GRI Standards: ‘think global, act local’.
Elation aside, the process of defining the Dangote Sustainability Journey adopted a methodology that prioritized stakeholder engagement. This involves nurturing a uniquely customized culture of sustainability thinking and doing among employees, anchored at the highest levels of governance. This internal ownership of both the sustainability vision (‘thinking’) and sustainability implementation (‘doing’) is in my view highly relevant in this era of ushering in ‘Sustainability Compliance’ as anchored by the Nigerian Stock Exchange. I foresee that while the pressure of regulatory compliance will fast-track Sustainability Reporting, corporate commitment to sustainability principles and the alignment of Sustainability KPIs with local and global laws, regulations and guidelines, are critical to deliver true value and lasting impact.
By convening leading stakeholders, NSE in collaboration with the Global Reporting Initiative (GRI), has introduced ‘compliance’ as an ‘incentive’ and/or ‘consequence’ to facilitate ‘action’, beyond talk. Sustainability Reporting, per GRI Standards, involves extensive Stakeholder Engagement.
The 7Pillar Methodology, which is founded around a more African understanding of Sustainability, goes beyond Stakeholder Engagement to also advocate for participatory management in the deployment of Sustainability Principles. At the Dangote Group for instance, in defining and operationalizing an approach to Sustainability from the highest levels of governance to the lowest level of employee within the organization, our first act of sustainability ‘doing’ was Sustainability Week.
It was an almost entirely employee-led initiative and served as a unique means to enable employees give back to society. Backed by top leadership, it offered a great opportunity for employees to interact informally across functions/levels for a good cause, inspiring innovation across 7 African countries led by 500 Sustainability Champions.
Dangote Cement’s adoption of Cultural Sustainability Pillar at the core of its Methodology has significantly helped mainstream the business’ commitment to evolve holistic strategy, structures, processes, systems, human capital and internal capacity to drive the Group-wide sustainability agenda across all its operating companies in Africa. The effort to institutionalize sustainability and achieve GRI-Certification has been significantly enhanced by putting people and values at the center of our approach.
I believe every African-owned, managed or focused business will build a more robust and sustainable strategy by focusing on 3 levels of stakeholder interests: past, present and future (Nnoli-Edozien, 2006: 2). It is even possible that SDG Goal #17 will benefit from specifically highlighting partnerships across generations, as an important aspect of ensuring we ‘leave no-one behind’.
Chief Sustainability and Governance Officer, Dangote Group.
She is a social entrepreneur
Frontpage January 11, 2018