Sustainability: ‘complicated’ road for Small and Medium Enterprises?

Sustainability: ‘complicated’ road for Small and Medium Enterprises?

Sustainability is defined by the United Nations World Commission on Environment and Development as ‘meeting the needs of current generations without compromising the ability of future generations to meet their own needs’.

However, it seems as if the topic is taboo for some African SMEs, mostly black-owned. Many African SMEs, whose short-term goal is to make lots of money ‘at all costs’ to boost growth and put food on the table, totally ignore the topic perhaps due to the lack of knowledge.

For some, however, sustainability – a process that extends beyond the sole aim of making profit – is a clear and present danger to their business, and constitutes a complicated and expensive exercise.

“I have no idea what this sustainability and green business thing is,” one man (57) only identified as Johnny, the owner of a bakery and dairy business employing 25 people in Johannesburg, South Africa, said.

“We are in the business to make lot of money, that’s the only way you can stay alive, fight poverty and make a living, especially in this country. And I don’t know how this is related to future generations which I won’t even meet,” Johnny said.

“Surely, these future generations can take care of themselves. If it is an expensive, complicated exercise, it’s not definitely for small business – I think it is a terrain for large industrial companies.”

Brigitte Burnet, head of sustainability at Nedbank, warns that being sustainable is not just about staying in business from a financial perspective.

“True sustainability is when that impact is evident everywhere – from raising living standards and preserving the environment, to improving futures and enhancing the cultural, social and economic fabric of society,” she explains.

Johannesburg-based Nedbank is one of South Africa’s biggest four banks, and is partly owned (53%) by insurance giant Old Mutual.

Evy Crals and Lode Vereeck, of the Hasselt University in Diepenbeek (Belgium), urge SMEs to look at the return and the opportunity costs of a sustainability strategy rather than the financial costs.

The Lifetime Company in the UK put it this way: “One of the key arguments used to persuade SMEs to move towards more environmentally sustainable business practices is the cost savings that typically come hand in hand with these measures.”

Dr Marco Lotz, sustainability carbon specialist at Nedbank, said: “Most responsible corporates have got sustainability criteria implicitly or explicitly embedded in their vendor selection processes.

With South Africa aiming to shift towards the green its economy, Dr Lotz said it was critical for SMEs that want to do business with larger companies to, at least, start the sustainability journey to ensure longevity in the market.

Dr Lotz, who slams as incorrect reports that the sustainability journey needs to be difficult or expensive, reiterates that to be a (preferred) supplier to larger companies SMEs should consider becoming more sustainable.

Nedbank Group Chairman Reuel Khoza said: “Sustainability is about walking the path to a better future, together, and helping one another to complete the journey.”

Johnny believes government and big businesses must organise workshops nationwide to teach black entrepreneurs about sustainability and green business.

*Photo by Green Biz







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