Investment

South African SMEs and the business case for sustainability

David Morobe, Executive General Manager for Impact Investing at Business Partners Limited

The sustainability concept is top priority for businesses globally, gaining significant traction in recent years. As a result, an increasing number of emerging entrepreneurs are entering the business world with a “greener mindset,” succinctly aware of issues around people and the planet. 

According to David Morobe, Executive General Manager for Impact Investing at Business Partners Limited, there are several reasons why focusing on sustainability makes good business sense, not only in terms of the bigger picture, but also as a strategic tool for growth and development. 

One of the key drivers of this shift today is the rise of the conscious consumer, who is currently setting the pace.

Over the last decade,” explains Morobe, “there has been a noticeable shift in the way consumers make buying decisions. Today’s consumers are personally impacted by the increasing global focus on issues such as climate change, environmental preservation and social justice.” 

Its therefore no surprise that “conscious consumerism” is on the rise in South Africa, where shoppers are basing more of their buying decisions on what is best for the greater good. A study conducted by Mastercard showed that 54% of South African adults have been encouraged to make better environmental and sustainable decisions. As the world works collectively towards becoming more carbon neutral, this trend will accelerate and lead to inevitable changes in retail. 

“For small businesses,” adds Morobe, “this trend marks a significant turning point. More consumers are basing their buying decisions on whether brands use sustainable materials, employ environmentally friendly production and manufacturing processes, and provide safe and fair working environments for their employees. Small and medium enterprises (SMEs) who want to futureproof their business models by strategically aligning with this movement have the potential to reap unprecedented returns. 

“There has never been a better time for SMEs to tap into this global shift and join the ranks of the pioneering entrepreneurs who are changing the meaning of what it means to do ‘good’ business.” 

Access to markets

The rise of green procurement – particularly in the public sector – is another step in the right direction for sustainability. In fact, the past few years have seen the South African government taking a “greener” approach to procurement to stimulate and drive markets for sustainable production and consumption. 

“At the centre of this transition,” says Morobe, “are Green Public Procurement (GPP) policies, which consider a number of environmental criteria. Municipalities, state institutions and local government bodies now have a vested interest in working with suppliers that are actively working towards reducing their carbon footprint and making a positive impact on the wellbeing of their communities. This presents a golden opportunity for small businesses who wish to become state suppliers, to adopt greener practices and in doing so, increase the appeal and viability of their businesses to state procurement professionals.” 

Employee wellness

He explains that employee wellness and its link to profitability is another clear reason why sustainability makes good business sense. “There is a proven correlation between employee health and wellbeing, and sustainability. While this is particularly true within the corporate space, it is a philosophy that is slowly filtering into small businesses and their teams. 

“Sustainability issues within the workplace extend to the safety and security of working spaces and the environmental impact of working processes, to the sustainable use of office supplies and fair compensation,” says Morobe. “Furthermore, a number of studies have linked a positive workplace environment and culture to profitability. Employees who are happy, are simply more productive. And this has a knock-on effect on human resource issues like talent attraction and staff retention.” 

The business case for sustainability in terms of employee wellness is therefore compelling. Small businesses do not have to wait until they have scaled their businesses to apply this principle to their operations and staffing.  “Get the basics right in the beginning, and when you grow, that same positive culture will grow with you,” concludes Morobe.







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