The sustainability challenge of business in South Africa
| dc.contributor.author | Kramer, Diane | |
| dc.date.accessioned | 2019-02-15T09:40:37Z | |
| dc.date.available | 2019-02-15T09:40:37Z | |
| dc.date.issued | 2018 | |
| dc.description | MBA Thesis | en_ZA |
| dc.description.abstract | Since the 1800’s the world has seen rapid population growth and even faster economic growth. Higher living standards are linked to improvements in life expectancy for billions of people. However, these perceived benefits come at a cost, where this progress highlights that humanities production and consumption patterns are exceeding the planets supply limits; and therefore unsustainable. (Nedbank, 2014). This growing concern around the consumption and production behaviour of humanity is described in the literature as a concern to find equilibrium between the three pillars of sustainability; economic, social and environmental. Satisfying the needs and wants of humanity is a daunting challenge in light of population growth, depletion of irreplaceable resources, climate change, poverty, the lack of energy, water and access to minimum basic services. Longterm sustainability, shared value creation and an urgent response to climate change are emerging as key imperatives to consider when providing for the needs and wants of 7.4 billion people (and at an effective rate). Over the past two decades, a shift in business strategy has emerged, moving from that of a narrow view focusing on the individual corporate economic mandate of growing profits for shareholders, to a broader view, which encompasses social and environmental shared value creation. This new approach is to create equilibrium between the three pillars of sustainability. Numerous definitions and methodologies have emerged over the past 50 years of how business is supposed to achieve this balance, which in itself has created a divergent and slow response to long term holistic sustainability. The research therefore sought to identify the response of the largest South African companies to the sustainability challenges of climate change and the warnings for assuring sustainability on the planet; where global warming is slowed down to 2C within the next 15 years, whilst remaining competitive in the market place. From the review of literature, common key sustainable development (SD) drivers and activities are identified to achieving sustainability. Some of the common social drivers emerging from the literature are; fair and compliant governance, leadership, innovation, corporate culture and its evolution into corporate citizenship and individual behaviour change. Some of the common environmental drivers emerging from the literature are climate change and global warming, biodiversity protection, innovation and renewables, energy, water, and waste. The concern for business is to overcome the insufficient time remaining to mitigate the impact of population growth and to find the global solutions to create sustainability between people, profit and planet. The literature highlights perceptions around upfront costs of SD activity, which are argued as having either a positive or negative impact on company profits. The research report therefore investigated if there is a relationship between SD and economic performance and if that relationship is positive or negative. The research therefore focused on understanding if the largest companies operating in South Africa are succeeding in their attempt to mitigate negative impacts of production and consumption behaviour, to reduce long-term costs, understand risks and improve impact, whilst remaining competitive in the market place. This research report resulted in identifying a negative relationship between corporate SD activity and Return of Net Assets (RONA). This could be attributed to many factors or combinations of them, which are discussed in the results section of the research. However, it is clear from this research that relying on the scenario of ‘business as usual’ presents undeniable risks. The most likely explanation for this negative relationship is that more time and research is required to fully measure and understand the impacts of social and environmental change. The true impact of corporate SD change has not yet had enough time to yield a conclusive result and therefore its true value to creating balance between the pillars of sustainability could be underestimated. Therefore, the main recommendation from this research, even though the results proved a negative relationship between economic performance and SD, is that the academic view that business takes seriously the first mover advantage by adopting sustainable development activities throughout their value chain and to shift their view from narrow to shared-value, is supported. Leaders must embrace sustainability as the most important imperative facing the short and long-term outlook for their business and humanity. If not, the results could be disastrous for current and future generations, ultimately affecting the balance between all three pillars of sustainability and economic profit long-term. Sustainable development should therefore be embraced into the DNA of the business culture, as the main driver of economic performance and not pushed aside as a compliance cost on the short-term bottom line. In conclusion, shifting the business focus from a narrow view of shareholder profitability to the broader view of shared-value creation is required. Fulfilling this recommendation will help create a viable planet, able to provide the needs and wants of current and future generations. | en_ZA |
| dc.description.librarian | NM2019 | en_ZA |
| dc.identifier.uri | https://hdl.handle.net/10539/26427 | |
| dc.language.iso | en | en_ZA |
| dc.subject | Business enterprises -- Environmental aspects -- South Africa. Industrial management -- Environmental aspects -- South Africa. Sustainable development -- South Africa | en_ZA |
| dc.title | The sustainability challenge of business in South Africa | en_ZA |
| dc.type | Thesis | en_ZA |