Corporate Sustainability – How Organisations Can Accelerate Long-term Shared Stakeholder Value Leveraging Short-term COVID-19 Rebuilding Efforts

Corporate Sustainability – How Organisations Can Accelerate Long-term Shared Stakeholder Value Leveraging Short-term COVID-19 Rebuilding Efforts

This crisis should serve as a wake-up call for organisations to re-examine their role in the society to ensure that it leaves a lasting legacy that helps enhance their corporate sustainability post COVID-19. As Nigeria prepares for the gradual easing of confinement measures from 4th of May 2020, many companies are already in a hurry to get employees back to work. Corporate eagerness has only grown as businesses have been shut down over the past four weeks causing them to lose money per minute. 

Many believe that COVID-19 will have a far more reaching impact on all kinds of businesses than any crisis in the past half century. Despite this gloomy outlook, it is common knowledge that change creates opportunities. The day of reckoning has arrived. Having staggered over the years to integrate strategies for environmental protection, social wellbeing and economic development into business planning and corporate governance, the pandemic has once more provided businesses with another opportunity to fast-track that process. 

Business leaders who act now, communicate common value system to customers and take proactive approaches to the changing markets will do much better than those who will ignore the present situation. Here are six concrete ways to accelerate long-term shared stakeholder value leveraging short-term rebuilding efforts:

Make Corporate Sustainability a top-level function and hire qualified CSR Practitioners 

Organisations need to urgently reconsider appointing sustainability heads into top-level management positions – sustainability having now evolved not just for “doing good” but also “doing well” – a key top-level management responsibility cutting across all business units ranging from human resources to procurement, health and safety to environmental management, IT to security, legal to accounting, etc. For clarification, Corporate Sustainability is defined as a business approach that creates long-term stakeholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments. 

To bolster the “can do” belief and attitude among line managers and heads of business units, it is important to invest in educating these key operational staff on sustainability strategies and implementation as well to easily understand the global trends, some of which will be discussed in this article. They will also be required to help create systems and processes to integrate sustainability into their business decisions. CSR is no longer any-and-all comers profession. Many sustainability initiatives require specialised knowledge and expertise—such as talking to suppliers about sustainable sourcing or using an eco-efficiency tool to evaluate a new product probably working with a research partner institution or integrating a framework such as an ISO standard as part of a business continuity plan. Sustainability managers as well should have good knowledge of all processes, procedures, frameworks and standards being utilised within the organisation and in all business relationships in order to help improve and innovate to create long term shared stakeholder value. Let’s also define a Corporate Sustainability Manager as a person responsible in an organisation for developing, implementing, assessing and reporting on strategies that create long-term stakeholder value by embracing opportunities and managing risks derived from economic, environmental and social developments. 

Be useful – be part of the emergency response teams 

Earlier in March, Nigeria’s private sector leaders announced the creation of the Coalition Against Coronavirus (CACOVID). The initiative is being spearheaded by Access Bank Group and Dangote Industries Ltd, with support from Zenith Bank, Guaranty Trust Bank, MTN, ITB and others. CACOVID will work to fight COVID-19 by raising public awareness, supporting healthcare professionals, institutions and governments, and by rallying private sector leadership and resources. On April 22, 2020, the coalition announced that it has ordered for 250,000 supplies for tests and another 150,000 extraction kits to fast-track molecular testing for the deadly coronavirus and no less than 1.7mn households would benefit from its food relief package as well. This is an excellent way for organisations to positively impact on society. It also provides for an opportunity for long-term good to come out of this temporary crisis provided organisations are willing to embrace changes for the benefit of all.

The pandemic has obviously created an opportunity for organisations to reconsider their approach to Corporate Philanthropy (CP), an integral part of Social Responsibility (SR) initiatives and position themselves as the player of the future. It has become easier to seek out strategic alliances and joint ventures on increasing numbers of emergency response initiatives in order to solve our immediate challenges but can also be a way to gain competitive advantage and enable the organisations to achieve objectives that would not have been possible without the alliance. Organisations – public, private and civil societies should leverage on these relationships and joint projects for critical institutional positioning towards achieving mutual goals. Herbert Wigwe, group managing director of Access Bank Plc, said that the CACOVID-19 is approaching the fight against the virus from three levels. “One, it was clear from the beginning that no one institution can go it alone, so we solicit everybody’s cooperation in tackling this scourge. Two, while several measures are being taken to stop the spread, including lockdowns, restriction, social distancing, there is the need to address the hunger.” He explained that the third level was the thought leadership aspect of the plan which is to tackle the post-pandemic aspect. 

That indicates that the coalition may continue to work together even after the pandemic. These organisations are building ‘ethical brand identifications’ based on the collaborative work they are doing. These emergency response initiatives are meant to demonstrate a system that values a culture of care and support, fulfilling missions, and acting as models for society. At an organisational level, as a result of this crisis, many organisations will increasingly be pursued to develop structured corporate sustainability programmes after the pandemic as those organisations engaging in strategic and sustainable activities will gain strength and power through innovation therefore become of high importance in the global marketplace. 

Research and development (R&D)

Research and development are the innovative activities undertaken by corporations or governments in improving or developing new services or products. Research and development constitute the first stage of commencement of a potentially new service or the production process. It differs from a variety of corporate activities in that it is mostly not intended to yield immediate profit, and generally carries greater risk and an uncertain return on investment. However, it is crucial for acquiring larger shares of the market through the marketisation of new products or localisation of the supply of important raw materials. Most importantly, it provides innovative opportunities for what Prof. Ndubuisi Ekekwe, Founder & Chairman of Fasmicro Group would term as Perception Demand Marketing – creation of products that the customer never imagined or thought of its demand domain in order to stimulate latent demands. You simply empower your customers to discover the possibilities and future in their ecosystem with a good sense of direction. This is not just a research and development or marketing function but a key sustainability innovation for business continuity as well.

As the world counts the human and economic costs of COVID-19, global supply chains –already stretched thin by the turbulent geopolitical environment are showing the strain. One fact is beyond doubt anyway – COVID-19 has laid bare the vulnerabilities of the world’s supply chains. Hence a definite need for companies to build in greater resilience to mitigate their effects. Additionally, many customer behaviour changes will require new or modified products and services. New market leaders will emerge while some past leaders may falter. Many companies will struggle post COVID-19. As against globalisation, localisation will become the new norm. For this reason, companies will seek access to faculty who create the cutting-edge knowledge and technology central to industry research and interest. 

However, knowledge creation and technology development require considerable capital investments, historically provided by governments. The declining federal funds as well as increased competition for monies allocated to human services will force African Universities to seek new sponsors. This provides for mutually benefiting opportunities for both industry and institutions. The interdependent research relationships between universities and companies will enable both entities to sustain growth in their areas. While companies rely on university researchers for product innovations, faculty gain prestige through increased external research funds. Just as industry needs innovative ideas to ensure profits, researchers need additional research funding to sustain faculty productivity. 

As it stands, even with infrastructural challenges in Africa, we are already starting to see some real innovations in supply chain agility. Several academic institutions, clothing, auto and electronics companies are quickly repurposing their laboratories and production lines to produce sanitisers, masks and ventilators to address current shortages. Simply put, when we put ourselves on a war footing, we can make big things happen fast.

In the west, there are so many examples of fruitful collaboration between universities, industry partners and start-ups. Many ideas from research in universities are utilised through collaboration between universities and firms. Others reach the market through licensing or start-up companies. Jean-Marc Frangos, chief innovation officer at BT, said: “BT’s university and start-ups collaborations have reaped great rewards. We jointly developed field scheduling algorithms with University of Essex which have resulted in 400,000 extra engineering tasks performed a year”. To this end, endeavours to find solutions to complex social, environmental and economic challenges for example, in energy, health or security will increasingly require collaboration between universities and industry because few organisations have the internal capacity to deliver results on their own.

Socially Responsible (SR) Joint Ventures

CSR joint ventures between firms and non-profits entail the union of profit and principle. Different from the response to emergency situations as already discussed above, which some may wrongly term as a CSR initiative. These SR collaborations are highly targeted, mission-driven, mutually beneficial, and create a distinctive brand for the joint initiative. In addition to being socially responsible, these ventures can provide partners with improved image, enhanced resources and stronger brand differentiation (Andreasen, 1996; Rondinelli & London, 2003; Shumate & O’Connor, 2010). Such ventures are principally aimed at helping achieve sustainable development in key need areas such as health, education, agriculture, etc. In this regard, Schumate & O’Connor’s (2010) symbolic sustainability model proposes the following:

  1. The value of such joint ventures is co-constructed by the alliance’s partners and stakeholders 
  2. Such alliances mobilise and restrict different forms of capital for nonprofits and corporations
  3. Partner formations are based on perceived mutual value
  4. There is a risk of the loss of legitimacy from each organisation’s stakeholders because of the alliance; but 
  5. Non-profit and corporate partners in such partnerships will be more buffered and less vulnerable to environmental threats compared to those organisations not in cross-industry alliances. 

The model noted above is crucial in achieving the sustainable development goals (SDGs). Partnership for sustainable development has shifted from idea to action with numerous examples emerging from around the world. Despite a long history of confrontation between industrial developers, local communities, NGOs and governments, the natural environment has become one of the main arenas for partnership in recent years. The shift from protest to partnership has been most pronounced in the area of business-NGO relations. Explanations for this transformation may be due to greater understanding of the concept of globalisation and the consequent rise of market-oriented NGOs and consumer protest aimed at making business more accountable for its adverse social and environmental impacts. Others suggest that some businesses and NGOs are beginning to find common ground around the concept of sustainable development in order to unravel some global-local problems which intergovernmental processes are failing to resolve. Several leading consulting and auditing firms around the world today are actually registered NGOs, suggesting that business-NGO Joint Venture initiatives is the right way to go in sustainability innovation.  

Turn remote working and telecommuting into long-term efficiencies

The key to differentiating between a workplace trend and an economic strategy lies in the hands of the businesses. If corporate leaders throughout the world believe remote work is beneficial to the sustainability of their brand, then they’ll invest in its development as a resource according to Laurel Farrer, a remote work strategist and contributor at Forbes. In Africa and particularly in Lagos and other major African cities, there is great value in telecommuting to all key stakeholders – organisations, employees, the environment and wider society. 

Despite Africa’s socio cultural challenges and poor infrastructure, I believe that remote work will revolutionise the way we live and work. American researchers already show benefits to include:

  • Higher Productivity — Higher flexibility and performance combine to create stronger productivity and lower absenteeism. The time spent on traffic will be used for more productive work helping to achieve work-life balance
  • Employee Loyalty and Retention — Employees will be happier with a company that offers flexible work structure than one that does not. Working from home for two to three days in a week will definitely be of interest to a number of employees. 
  • Profitability — Organisations save an average of $11,000 per year per part-time telecommute, or 21% higher profitability. This is in the western world where there are better road networks and much lesser traffic gridlocks. It is right therefore to assume that the benefits for African companies will be much higher.
  • Environmental Benefits — Companies committed to reducing their carbon footprint will embrace this opportunity and use the opportunity to invest in clean sources of power for their employees. 

Making sustainability the future blueprint for business

Business as usual won’t get the job done anymore—and sustainability as usual won’t suffice. According to Paul Polman, former CEO of Unilever, we should all aspire to leave our world a better place. For an individual, that means behaving in a sustainable manner in his or her personal life. For a company, that means having a meaningful and strategic purpose and finding ways to tie that purpose into the values and day-to-day work of individual employees. This includes working to mitigate the catastrophic effects of climate change, build truly fair and inclusive economic growth, navigate a radically reshaped world of supply chain to localise or create transparency and traceability; define, monitor activities, track sustainability performance, set objectives, and identify improvement opportunities! You’ll need to be ready to measure the success of your sustainability strategy —placing sustainability at the heart of business strategy, not just in the glossary reports but using systems thinking approach, some of which were explained in my article of April 16, 2020 “Integrating Sustainability Principles into Business Continuity Plan: Mitigating COVID-19 Impacts in Africa” published on tekedia.com.  

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