EMBRACING SUSTAINABILITY IN CORPORATE AFRICA

As we celebrate the environment today on June 5, 2024, the need to slow down, reverse the damage inflicted upon the environment by human activities, and ultimately restore mother nature’s equilibrium has never been this pressing before. Calls for sustainability when it comes to human activities remain high. In deed sustainability is a term that has gained great usage in our times but what exactly does it mean and what ramifications does it portend?
Sustainability generally means the quality of being able to continue over a period of time. In the context of the environment and development, its defined by the UN Brundtland Commission as the quality of meeting the needs of the present without compromising the ability of future generations to meet their own needs.
Countries, companies, customers, investors, employees and regulators have increasingly become conscious of the need by companies to engage in sustainable business practices which require an integrated approach that takes into consideration environmental concerns along with ROI concerns. In this regard, climate change factors such as carbon footprint have become a critical factor that companies must deal with actively not just through whitewashing practices but through encoding sustainable practices in their corporate DNA which offers an opportunity for them to innovate and differentiate themselves in the market.

SUSTAINABILITY IN AVIATION
In the context of Aviation, operators are increasingly embracing sustainability to offer alternatives and raise awareness thus encouraging responsible choices. For instance, operators are investing in modern, fuel-efficient aircraft to replace older, less eco-friendly planes. In Kenya, Astral Aviation has been reported to execute a strategy of fleet modernization. In the period 2023/4, the company has replaced its Boeing 727 Freighters with Boeing 757 Freighters which has resulted in fuel savings in excess of 20% and therefore a significant drop in their carbon footprint.
Operators are also adopting other sustainable practices such as (a) the use of Sustainable Aviation Fuels (SAFs). For example, Kenya Airways became the first African airline to fly a long-haul commercial flight from Africa to Europe using SAF; (b) increasing operational efficiencies through optimizing flight routes, minimizing aircraft taxiing time, and reducing weight onboard; (c) engaging in carbon offsetting programs; and (d) engaging in strict reporting procedures.
These measures contribute to the global basket of sustainable practices that either slow down or reverse harm to the environment.

SUSTAINABILITY IN TECHNOLOGY
In the context of technology, it is self-evident that technology is embedded in every aspect of our lives, delivering many perks in terms of convenience, costs and connectivity. However, this has come at a cost to the environment. The global population is generating an endless supply of data consuming ever more power in the process. It’s estimated that the ICT sector’s share of the world’s carbon footprint is heading toward 14% by 2040 underscoring the fact that, if left unchecked, this rising trajectory of data and power consumption will only go up and eat up the gains the sustainability movement has made thus far.
For the tech industry to achieve sustainability a three-pronged strategic approach is required. The approach involves (a) Sustainability within tech companies; (b) Sustainability by use of tech; and (c) Scalability of sustainability.

1. Sustainability within tech companies involves tech companies measuring the ESG impacts of their technology, and working to ensure it’s designed, developed, and deployed sustainably.
2. Sustainability by use of technology simply involves the use of technological innovation in every sphere of human activities, either by tech companies directly offering tech solutions to the market for sustainability or by companies themselves using their own homegrown tech solutions internally to drive sustainability initiatives and transform the business model. For instance, the UN under the IKI Project, is using AI to help communities vulnerable to climate change in Burundi, Chad and Sudan. The AI technology helps predict weather patterns allowing them plan more effectively. AI has had many applications in the fight for sustainability including mapping deforestation; tracking and reducing emissions; recycling more waste; and even cleaning the ocean. Other technological tools being used for sustainability include digital infrastructure like the cloud technology, Machine Learning and Internet of Things (IoT). For example, the SmartGrid IoT technology by Eskom and Metito Utilities is being used in South Africa to make electricity grids climate friendly with various monitoring and control capabilities allowing for reliable energy management, high energy efficiency and reduced energy consumption.
3. Scalability of sustainability involves designing an ecosystem of businesses, tech companies, startups, non-profits and government organizations to use technology in innovative ways to solve the climate change problem and deliver sustainable outcomes.

SUSTAINABILITY IN FINANCE AND INVESTMENT
Finance and investment is the great engine powering commercial activities in any economy. Therefore, the decision by financial institutions and/or investors on where to invest capital/debt is crucial and impactful on the sustainability campaign.
In the context of finance and investment, to achieve sustainability, the sector and financial institutions require reliable data on the sustainability features of companies, to determine whether or not to put in their money. To aid in decision making, legislative disclosure requirements such as the corporate sustainability reporting by EU and/or contractual disclosure requirements as well as new technologies developed to record and analyze the data are critical in this regard. So, what can this sector do to drive the sustainability agenda?

1. The sector can invest in companies offering solutions to the climate change issue. IMF’s report, “Mobilizing Private Climate Financing in Emerging Market and Developing Economies” states that achieving net-zero emissions requires an estimated annual investment of $3.5 trillion from global private financial institutions between 2022 and 2050. The sector ought to meet these financial commitments with actionable sustainable strategies, including investing in renewable energy, sustainable practices, green job creation, and the promotion of sustainable supply chains.
2. Due to constantly evolving legislation and economic context, a lot of challenges persist that affect sustainability within the financial sector. Its therefore critical for financial institutions to plan ahead by analyzing impacts of upcoming market and regulatory developments. Having their own internal policies and procedures to make their organization, activities and services/products more sustainable for their clients will also come in handy.

CONCLUSION
Meeting the needs of the present without compromising the ability of future generations to meet their own needs is a critical issue that generally affects all companies including companies within Aviation, Technology and Finance/Investment sectors. As companies set ever more ambitious environmental, social, and governance (ESG) goals, their sustainability strategies need to become more tightly aligned.
Individually, companies must come up with sustainability strategies that create long-term shareholder, employee, consumer, and societal value by pursuing responsible environmental, social, and governance options, basically, an effective sustainable strategy helps drive business growth and ESG performance.
Intra and among sectors, scalability of sustainability is king. Companies must work together through use of analytics and technology to ensure that we have a global concerted effort towards sustainability.
As you celebrate the environment today, do you have a robust corporate sustainability strategy? If not, reach out and let’s make it happen.

Muga Maxwell
Advocate of the High Court of Kenya