By BERNARD KIORE
Globalisation, digital connectivity, accelerated consumption and
disparate prosperity have combined with ecological decline, a lack of
global sustainability governance and resource scarcity to
transform the playing field for businesses. For 25 years or more, society has recognised that the way we do business has serious impacts on the world around us. Now it is increasingly clear that the state of the world around us affects the way we live and do business.
transform the playing field for businesses. For 25 years or more, society has recognised that the way we do business has serious impacts on the world around us. Now it is increasingly clear that the state of the world around us affects the way we live and do business.
Population
growth, exploitation of natural resources, climate change and other
factors are putting the world on a development trajectory that is not
sustainable. In other words, if we fail to alter our patterns of
production and consumption, things will begin to go badly wrong. How
wrong and for whom, is already evident in the natural disasters and
epidemics the world is currently facing.
At a national level, the transition to sustainable growth remains a goal rather than an achievement.
The
concept of “green growth” has gained ground but we still lack a precise
understanding of how we can achieve it along with higher standards of
living within the limits of our planet. The upcoming 7th Governors
Summit in Makueni will focus on the e
ffects of climate
change. This presents a good opportunity for county governments to
share good practices and reach consensus on action plans required to
implement the Kenya Climate Change Act and the National Climate Change
Action Plan.
Companies are, of course, not passive bystanders in any of this.
The resources on which businesses rely will become more difficult and
costly to access. There will be increasing strain on infrastructure and
natural systems as patterns of economic growth and wealth change.
Physical
assets and supply chains will be affected by the unpredictable results
of a warming world. As a result businesses will be confronted with an
ever more complex web of regulation, stakeholder pressure and market
dynamics.
But this is not the whole story. Consumer and
investor values are changing. And as these change, more companies are
recognising that there is profit and opportunity in a broader sense of
responsibility beyond financial results.
The bold, the
visionary and the innovative recognise that what is good for people and
the planet will also be good for the long-term bottom line and
shareholder value.
Competitive advantage can be carved
out of emerging risk. The top 10 risks in the most recent World Economic
Forum Global Risks report were environmental and social.
Organisations
need to understand how these risks will influence markets, customer
loyalty and impact profitability in the medium to long term. This means
moving on from old notions of corporate responsibility focused purely on
protecting and enhancing reputation.
It means being
aware that your business stands to be affected as supplies of fresh
water decrease and costs of energy rise and ecosystems increasingly feel
the strain of sustaining the world.
Knowing what those
effects will be and how your business can manage them successfully
means developing a sophisticated understanding of these risks and
carving out proactive strategies to harness opportunities and optimise
risks. We can never know the future, but it is good business sense to be
prepared for the possibilities.
While the transition
to a sustainable economy is technically possible, it requires widespread
support from businesses, governments and civil society. This transition
requires solutions that address both how and which goods and services
are produced.
The UN Sustainable Development Goals
(SDGs) present an opportunity for businesses to grow and profit by
collaborating with others to create a world which is more prosperous,
inclusive, sustainable and resilient.
The SDGs cannot
provide all the answers, and do not set out to, but they do suggest
approaches that will help to build sustainable business value in a
changing world.
The SDGs provide a useful springboard
for new thinking, debate and above all business action to deliver a
future that is both sustainable and profitable.
As we
enter the decade of action for the SDGs, both the public and private
sectors have a vital role to play. A coordinated approach holds the key
to sustainable development.
Kiore is a manager in Sustainability Advisory and Assurance Services, KPMG Advisory Services Limited.
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