To provide proper sustainability leadership in an organisation, company executives have to develop keen interest in sustainability issues through self-development and understanding of the basic principles espoused. This will contribute to the entrenchment of CSR and sustainability practices in Nigerian organisations.

Sustainability is gaining attention worldwide and the adoption of the Sustainable Development Goals (SDG) by many countries has pushed sustainability issues in business even further to the forefront. The SDGs provide aspirational goals for businesses to uplift the world and preserve its natural capital. The impetus is for businesses to operate responsibly and explore opportunities for solving problems that plague society in innovative ways, through partnerships with all stakeholders.

The Nigerian business environment is built on a hard core capitalist philosophy that emphasises profit making and satisfying the stakeholder by any means necessary. This business purpose and perspective puts a lot of expectations on businesses and managers who are charged with utilising resources to create value for their organisations. Companies are thus driven by numbers – of quarterly and annual profits. The success or failure of companies is judged by how much profit they have accummulated or the kinds of financially rewarding investments they made over the last business cycle.

There are pockets of companies in Nigeria that have imbibed the Corporate Social Responsibility (CSR) and Sustainability principles. They have moved away from the stockholder theory, which places emphasis on the role of firms as being entities designed to make profits for their financiers. Rather, these companies have embraced the stakeholder philosophy that essentially views the roles of companies as working to satisfy all their stakeholders, including the stockholders. This idea is rather contentious, especially in an environment like Nigeria and more so among small and medium scale enterprises (SMEs), because financiers of the operations of companies are considered as the prime movers and should also be the prime beneficiaries of organisational profits.

A poll of Nigerian managers will show that most of them are quite familiar with the concept of Corporate Social responsibility because this has been thrown around in business circles quite a lot in the past two decades. For most organisations, CSR is a way of giving back to the community as a payback for a license to operate. The current general practice is for organisations to look at their balancesheets at the end of the year and use any excess fund there to accomplish a project for the immediate community or some other organisation considered deserving of support. Is this really CSR or philanthropy? CSR in the true sense should focus on making the principles part of the organisational strategy, which looks for a cause that is closely tied to the business and then weave activities around it in ways that benefit the organisation, as well as some societal need. This way, CSR is not an afterthought but a conscious effort to address societal challenges.

Business Sustainability

What is sustainability? You might get varying definitions of the term if you were to poll business leaders around you because there is no universally agreed definition of the term. It is highly contextual and as such it means different things to individuals on the basis of who they are and where they are located in the world. In very basic terms, it is defined as the ability to meet the needs of the current generation without burdening the next generation. It is the conscious effort to see the interconnectedness and interdependence of the economy, society and the environment.

Business sustainability is therefore about the management of the triple bottom line (people, profits, and the planet), which involves the careful administration of financial, social and environmental risks and opportunities. On paper this looks simple and easily accomplishable but in reality it is a tough and most times rewarding path for businesses. It is not unusual today for external bodies or joint partner talks to include a request for the sustainability plans of a business. The truth is that most organisations have not given sustainability much thought, not to talk of articulating this in organisational policies.

Sustainability will not just happen to an organisation. There has to be conscious effort on the part of the organisation to move in that direction. The catalyst for such a move is not always from the leadership of the organisation. This can start from the manager cadre, especially in an organisation where managers are empowered to make decisions and justify the rationale for their actions.

Understanding Sustainability

It is important for sustainability advocates to understand the principles behind the concept to be successful in pushing the idea in an organisation. Since this is a new knowledge area, the ideas enshrined are constantly evolving but some key principles have emerged over the past decade to serve as signposts for practitioners. A manager should therefore be proactive in seeking new information to stay up to date with knowledge on sustainability. Nine of the principles that have been in circulation are outlined below.

Harmonisation of the triple bottom line: This calls for a consideration of the triple bottom line when applied in an organisation because you cannot separate business objectives from where a company operates. It means a contemplation of social issues (social justice, customers, ethical behaviour), environmental issues (renewable energy, pollution, degradation of the earth, emissions), and economic issues (ROI, business agility).

Consumption of income not capital: Our material and financial resources are not inexhaustible. Whether it is our natural resources, the extractive industry or how business is financed, managers should apply good judgment in decision making. If resources are not properly managed, this could lead to depletion or insolvency in organisations. To be sustainable, organisations must manage resources, giving consideration to people, profits and the planet.

Local, regional and global orientation: Projects are traditionally confined to organisations and their stakeholders without proper deliberation on results, asset and impact, but with sustainability things are changing. Globalisation is also having effects as companies expand beyond their traditional operating environments. The global movement of organisations have impacts on business operations and practices. This development means companies now have an expanded stakeholder group to deal with.

Short term and long term orientation: Organisations routinely effect changes through projects, which are short term in orientation but have lives going beyond the closure of the projects, after the delivery of products or services. Sustainability principles insist that organisations have to look at the benefits and impacts of projects as part of the planning and initiation process, in order to make them integral parts of the project life cycle. This view enables the organisation to look at processes, results, and asset related to projects.

Values and ethical consideration: We live in a capitalist society where profit is deemed the key driver for successful performance in companies. This drive for profit sometimes results in organisations engaging in sharp practices, especially if the society looks the other way to these. Good values and strong ethical behaviour are necessary in order to act responsibly in business. It takes one or a small group of people to tarnish a company’s image or bring the entire organisation down. There are examples we can learn from the collapse of Enron and Andersen.

Transparency and Accountability: These are important to ensure that sustainability takes a hold in an organisation. Managers are held accountable for organisational goals and deliverables. Sustainability adds new elements of accountability to these, with managers needing to worry about accounting for people, profits, and the planet. In the reporting requirements, project managers have to communicate triple bottom line issues also. Transparency is not necessarily emphasised in project management but this is a very important feature of sustainability because the disclosure of events, activities and policies indicates that an organisation is operating responsibly.

Risk reduction: Running a business involves identifying and mitigating risks to maximise the bottom-line. While the focus of companies is traditionally on profits, there is a need to also identify social and environmental risks and how they might negatively impact the organisation. These triple bottom risks have to be identified with mitigation strategies.

Stakeholder participation: Stakeholder are individuals or groups that have a stake in an organisation and are likely to be impacted by decision and actions of the company. Stakeholders usually have wide interests that are not aligned with those of the organisation but it is the responsibility of organisations to align stakeholders to their organisational strategy. Stakeholders have to be identified and their issues mapped in order to address them. The ultimate goal is to integrate stakeholders in the decision making structure of the organisation.

Embedding Sustainability in Organisations

Some organisations in Nigeria are already in the forefront when it comes to the journey towards sustainability. These organisations are applying sustainability principles by embedding these in their policies, operations, supply chain, and human capital development, among others. The best way to make sustainability issues resonate in organisations is to avoid using the technical jargons of the knowledge area, and couching the pitch in business terms – how organisations benefit from adopting sustainability principles.

Commitment from staff is critical to getting things off the ground because without the initial commitment, it is likely that the effort will result in a stillbirth. Obtaining commitment is not an easy task in many organisations but this should involve education to raise awareness, encouragement of business units to explore innovative ideas, recognition of individuals and groups with sustainability ideas that are in line with organisational goals, and the search for low hanging ideas that can easily be implemented to demonstrate potential impacts if organisations adopt larger sustainability ideas. It is not enough to heighten awareness in an organisation, the leadership must model the kind of sustainability behaviours they want to see. This will also mean commitment and the provision of resources for sustainability initiatives through budget allocation. There is also a need to constantly communicate the importance of sustainability and the direction that the organisation is headed with initiatives in this regard.

Embedding sustainability principles in the organisational culture is the best strategy for sustainability to stick to the minds of staff members. Organisational cultures emerge over time and new members are acculturated as soon as they sign on to work for organisations. The first step towards this process is making sure that goals, policies, procedures and practices are clearly defined for the workforce. Business unit objectives should flow down and be aligned with organisational goals. Policies make expected behaviours and standards in organisations very explicit. Sustainability principles for the organisation and its business units should be clarified to ensure that staff members are aware of their responsibilities in ensuring the organisation achieves its goals. The next step is to ensure these policies and practices are integrated into the organisational vision, strategy and business plans, since these are instruments that drive the operations of all organisations. To ensure success, tasks have to be assigned to individuals in the organisation. Some individuals might have sustainability knowledge, while others might not. Determining skills gap and training staff is pivotal for success. There is a maxim that says what is not measured does not get done, so metrics need to be developed for various sustainability activities so progress can be measured. The results of such measurements will inform the organisation is they are meeting their goals or falling behind. Either way, the results can be utilised for recalibrating the efforts of the organisation.

Sustainability and Business Leaders

For organisations that have attained the last stage of sustainability, sustainable business practices are central to their operation. The path to sustainability for organisations is a gradual process that requires some shepherding through well-crafted leadership, whether from the CEO perspective of an executive charged with overseeing sustainability issues. Organisations do not tow the path towards sustainability without conscious efforts to make this happen.

Like every strategic approach, the process starts from the visioning and positioning of the organisation in terms of what the goals and purpose are for the future. Organisational leaders would have to ask the question about how best the organisation can be positioned to create value for its stakeholders. In other words, there has to be a plan in place for sustainability.
To provide proper sustainability leadership in an organisation, company executives have to develop keen interest in sustainability issues through self-development and understanding of the basic principles espoused. This will contribute to the entrenchment of CSR and sustainability practices in Nigerian organisations.

Nubi Achebo is a sustainability professional and a director at the Lagos Business School, Ajah, Lagos.