by Lionesses of Africa Operations Department
It was John Elkington who in 1994 originally coined the phrase ‘Triple Bottom Line’ to change the thinking within business from the view that ‘business is in the business to do business’, to, in his words “…provoke deeper thinking about capitalism and its future” (here). The trouble was (as John himself admitted here) that this quickly became an accounting add-on, and with that, for many (not all, as he highlights ‘heroes’ Denmark’s Novo Nordisk, Anglo-Dutch Unilever, and Germany’s Covestro), the tick boxes appeared and behind the smoke and mirrors, double counting, and dare we say it, being ‘economical with the truth’, the talk just increased, leaving the entire purpose - positive impact at scale through the transformation of capitalism, in the dust.
Reducing one’s carbon footprint of course has become a central part of this TBL and in recent years, the number of companies that have taken this seriously and avoided the meaningless, or as Greta calls it ‘Giving up’, ‘Net Zero by 2050’ announcement (here) have been increasing, but they are still in a minority in a world where Greenwashing is common and, in places where poverty is rife, finding the next meal (to be fair), trumps saving the globe.
However, it now feels like there is a real change underfoot as many western governments start to seriously clamp down on their businesses with new laws on plastic usage (here) and carbon footprints. Is this the catalyst that will create the change we have been waiting for?
We have written in the past as to why it is essential for those companies that have announced serious targets, to be on track (here) and even said we would be looking out for the EU’s Corporate Sustainability Due Diligence Directive in 2023. Well, the wait is over (here) and there in black and white it clearly states “To ensure that due diligence becomes part of the whole functioning of companies, directors of companies need to be involved…when fulfilling their duty to act in the best interest of the company, directors must take into account the human rights, climate change and environmental consequences of their decisions.” Why is that important (other than the obvious need for these to be taken seriously)?
Věra Jourová, Vice-President for Values and Transparency (here), said that this was to “…to support business by providing legal certainty about their obligations in the Single Market. This law will project European values on the value chains, and will do so in a fair and proportionate way.” - Directors of major EU companies beware: the phrase ‘providing legal certainty about their obligations”, will leave no one in any doubt that you need to check your D&O (Directors’ and Officers’) liability insurance! You will be carrying the can.
So now that the EU has got the Director’s of all the large companies in the EU awake (this covers all major EU companies and those who have large sales in the EU), it then slips in that although SME’s do not have to follow this directive, the supply chains of these huge companies will be front and centre. Didier Reynders, EU Commissioner for Justice said: “This proposal is a real game-changer in the way companies operate their business activities throughout their global supply chain.” In other words, don’t hide behind an inability to measure the impact your supply chain has. This is now the responsibility of the large firm and through that, the Directors!
Thierry Breton, the EU Commissioner for the Internal Market, left people in no doubt where the responsibility lay: “Complex global value chains make it particularly difficult for companies to get reliable information on their suppliers' operations…Our proposal will make sure that big market players take a leading role in mitigating the risks across their value chains while supporting small companies in adapting to changes.”…and in case anyone had any doubts (here) the press release states: “Gender equality and non-discrimination are crosscutting issues in these objectives.”
At the same time as this EU Directive has been making its way through the various stages (- not law yet, but that is only a matter of time), the world has recognised that to rely totally on China for its supply is not only dangerous, but also irresponsible and so the term ‘China+1’ has started to appear with increased regularity. Have a Chinese supplier? Add one from elsewhere to ensure the security of supply. Obviously this is not rocket science as even our Grandmothers would talk about not putting all eggs in one basket (and yes if you think about it - that is a supply chain at work, Hen, Eggs, Basket(s), Walk, Door, Kitchen, Pot, from producer to consumer), but that means that huge western companies will now all be looking for suppliers who are taking ESG seriously and most importantly measuring it, outside of China.
This is now the perfect opportunity for us to join these western supply chains. Sodexo (a major French company impacted by these new regulations, and given their footprint across Africa should be a purchaser of many Lioness goods or services) “…carried out a net zero survey of its supply chain in order to better understand the climate strategies and progress of its key suppliers…” (here). So how to we attract Sodexo and others’ attention?
It is of course easy to say that we need to shout about what we are doing, as we recently wrote here, but this is meaningless if we have not measured our impact and have the documents to back it up. Documents do not have to be complicated. If you have invested in Solar Energy (something perhaps that the ruling party (ANC) in South Africa should have considered for their recent conference on the Energy crises - see here, from 1minute 30s onwards), then find your kWh usage and find an online calculator, such as this. In South Africa given their reliance on Coal and now Diesel as the power grid collapses, this will dramatically highlight your efforts.
The WWF has done some great work on highlighting various tools to calculate your business’ carbon footprint for different industries (here). This will mean sometime spent in your accounts dept going through various bills for energy use, water use, paper and stationery, business travel, food and catering, waste and so on. Then organising all of this into a handy file, so you have it near at hand, but it is worth it.
The WWF also have an excellent guide to ‘Developing a climate and environmental policy’ (here). The reason all of this is important is because when you reach out to a western company for their business, you can instantly produce all your information, readily available. It is no longer just a case of ‘how can I solve your problem with my product’ but now we have to add - ‘…while I cover your back for EU regulations’. Never forget that this is not only for large EU businesses, but for any company that is part of their large supply chain. The large EU Business will want to drill down and through their numbers until they get to yours, so it might simply be you supplying a local company that in turn supplies (for example) Unilever Kenya, that is then part of the larger Groups footprint. These regulations are designed to cascade, so also check your suppliers and measure it.
Whatever the WWF suggests you do to show your carbon footprint and how you are reducing this, think how that process can be replicated and documented into other areas of the SDGs that you work on. SDG5 for example: ‘Achieve gender equality and empower all women and girls’. We have written before about the incredible multiplier effect of Lionesses as they employ more, have a great female to male ratio in their workforce and increase the wealth of the local communities, all whilst returning more per $1 invested than male run businesses as the World Economic Forum write (here). Document how many women you have in your workforce, what is the ratio between them and men. Document all minorities and how you impact their lives, your training, your advancement, your management, ownership and board. What is your company’s impact on their communities. Are you leading the world by having a children’s creche or kindergarten (or have set one up with other local factories)? Do you have a doctor available during office hours? Both of these two are central to making a dramatic difference to the lives of women across the globe.
Most importantly (as we are documenting Impact), what was there before? Measure that to show the change you brought. The impact.
As Deloittes confirm: ‘How consumers are embracing sustainability’ survey (here), having a ‘transparent, accountable and, socially and environmentally responsible supply chain’ is number 1 for increasing the trust consumers have of a brand’s products, our large EU buyer will know that.
As we move away from the Plastic Age, into the Data Age where Data is King, make it easy for large companies to welcome you into their supply chains. Don’t wait for others. That “the transformation of capitalism” that John Elkington wished for from global businesses starts with us and now it seems, there is a window of opportunity. The planets are aligning…
Huge global multi national companies have a problem.
Be part of the solution.
Stay safe.