The world economy has experienced downturns even after two years of managing the COVID-19 pandemic. It is, indeed, an open knowledge that the pandemic led to sharp disruptions in the global supply chains. In the case of Ghana, the United Nations Development Programme (UNDP) in collaboration with the World Bank and the Ghana Statistical Service’s Business Tracker revealed that Ghanaians’ businesses have been affected through a multiplicity of channels in the forms of demand and supply shocks as well as financial shocks with continued uncertainties which it said could result in a lower desire for risks and investments.
While the world was still grappling with the devastating effects of the pandemic, the subsequent outbreak of the war in Ukraine has made economies more vulnerable, uncertain and complex to manage. The United Nations Global Crisis Response Group (GCRC) reported in the year 2022 that 60 percent of the poorest countries are in debt distress or at high risk of it; developing countries will miss $1.2 trillion per year to fill the social protection gap, and $4.3 trillion is needed per year – more money than ever before to meet the Sustainable Development Goals (SDGs). The lingering effects of the pandemic, coupled with the war in Ukraine are in fact, externalities to business growth and development.
Many businesses leaders especially those in the Small, Micro and Medium-scale sector have been overwhelmed by the headwinds of the crises and are finding it difficult to have realistic plans and strategies to keep themselves in business. It is also at the backdrop of the fact that many businesses in Ghana are reported of not being able to sustain their operations beyond the lives of their founders. I am of the strong opinion that when business leaders adopt a paradigm shift in their orientations to business, the narrative can change and enterprises in Ghana can live beyond many generations. But the nagging question then is, what can the business leaders do to sustain their operations now and beyond? Based on this proposition, I would like business sustainability to be understood in the context of the ability of businesses to create long-term value for its stakeholders and continue to make a positive impact in society irrespective of the industry, goals, and the products or services the businesses provide to the public. The crux of the matter is that every business exists for an identifiable purpose and the decisions of its owners do have impacts on the businesses’ longevity or extinct from the corporate space. That is why every decision by business owners must be carefully made and consistent with its long-term strategies.
This article attempts to proffer the key indicators business leaders must consider in their business sustainability strategies and my focus is to use the perspectives of the Sustainable Development Goals. By Sustainable Development Goals, business executives must critically measure the sustainability of their businesses by looking at their operations both internally and externally using the environmental, social, and governance (ESG) framework since same is used by investors to conduct due diligence on them for potential investments.
Environmental Framework
In terms of the environmental framework, it must be noted that no business entity operates in a vacuum. A business’s immediate or remote environment impacts on its operations and it must be concerned about it. The environmental sustainability framework of a business, therefore, gives businesses the responsibility to ensure that their activities either directly or indirectly help to conserve natural resources. This way, they invariably protect the natural environment which supports health and well-being of the future generation. The understanding is that every business which operates in an industry, has its set of goals or values, offers certain range of products or services to the public and must, therefore, be mindful of the environmental consequences of its decisions and actions since same influence the business’s long-term value. I don’t expect businesses operating in the agriculture/forestry, banking/financial services/ insurance or manufacturing industries to have same environmental sustainability challenges because their lines of business and exposure to the environment have varying magnitudes. This is where businesses leaders who do not have the requisite knowledge in this area of business management, unfortunately make wrong decisions and end up misapplying their limited resources.
Businesses leaders must be aware of the core principles of business sustainability to enable them to position themselves and align their values, products or services with the underlying principles since they are the building blocks and pillars for their long-term survival. Such an awareness will also guide them to integrate their industries’ specific sustainability standards or benchmarks into their operations. To integrate those principles, businesses can re-shape their existing policies, processes, and attitudes through training of their employees on the sustainability principles.
Social Framework
The social aspect of business sustainability examines how a business manages its relationships with its employees, customers, suppliers or third-parties, and the communities where it operates. It also includes factors such as reporting on diversity, equity, and inclusion of the marginalised. The social dimension aims at creating a fair, safe workplaces that promote wellbeing and equality by understanding what employees need, where they live and work. The social consideration is equally not cast in stone; each industry has its own sustainability challenges, as such, businesses need to consider their sector specifics in their business sustainability plans. For instance, sustainability challenges which threaten workplace safety for employees in the manufacturing/industrial sector cannot be the same as those in the accounting, banking or legal services.
Governance Framework
The third framework of importance is the governmental sustainability which firmly deals with issues such as responsible leadership, shareholders’ rights, internal controls and audits. With this framework, I am concerned about how businesses implement their sustainability strategies across business units and manage goal-setting. Thus, building a sustainable business requires its managers to have crystal clear goals, yet making them stay flexible enough to evolve in the midst of crises. It is also important for businesses to strengthen relations with their external stakeholders, and ensure that they don’t compromise on reporting processes and accountability to avoid payment of fines or penalties for violating regulations or laws. Business sustainability is the of the essence in the fast changing world and without a plan, many business leaders run the risk of making wrong business and investment decisions which cannot withstand emerging crises.
BERNARD BEMPONG
Bernard is a Chartered Accountant with over 14 years of professional and industry experience in Financial Services Sector and Management Consultancy. He is the Managing Partner of J.S Morlu (Ghana) an international consulting firm providing Accounting, Tax, Auditing, IT Solutions and Business Advisory Services to both private businesses and government.
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