May 9, 2016 | By isosteam |
Can Natural Capital drive progress for Africa?
Lead Contributor: Shenan Boit
May, 2016—Africa is a continent of extreme natural resource wealth, yet it still faces umprecedented challenges compared to other regions in the world. This is most likely a result of poor governance, low tax revenue and lack of local inputs and investments. Additionally, development is stalled by poor infrastructure, technological delays, limited market access, gender inequality, corruption, war and conflict, food-insecurity and disease. With growing inequality, high unemployment and a rapidly growing population of educated youth who have little to no income opportunities, African leaders must begin to adopt measures to ratify their countries’ situations.
Dialogue and attempts toward creating economic and sustainable development in Africa are not new concepts. They have been occurring for decades with mixed results. With Africa’s plethora of human and natural resources, the region should be able to slingshot itself toward the forefront of the marketplace in a responsible and sustainable manner – if it can utilize and mange these resources properly. The real question is – how?
- What are the right development concepts?
- What are the appropriate monitoring tools?
- Who are the right people to bring to the development table?
The Summit for Sustainability in Africa
In the first Summit for Sustainability in Africa held in 2012, ten African countries met in order to determine how African nations and their investment partners understand, manage and value natural capital to support and improve human well-being. Natural capital is the natural assets that make human life possible, such as soil, air, water and animal life. The nations agreed that they were caught in a trend of resource exploitation that was not sustainable. They agreed that natural capital should be considered when reporting and developing practices, policies and programs.
The summit produced the Gaborone Declaration, “to ensure that the contributions of natural capital to sustainable economic growth, maintenance and improvement of social capital and human well-being are quantified and integrated into development and business practice.” At Rio +20, the United Nations Conference on Sustainable Development, these ten African nations united under the Gaborone Declaration and emerged as global leaders. By understanding and promoting natural capital for all its citizens the African region has started to find the right developmental concepts.
Transparency and Reporting in Africa
The next step is to effectively monitor and report on economic, environmental, social and governance practices that are successful or faltering. There has been global uptake in transparency and reporting. Citizens are demanding fairness and action. Political and corporate transparency is becoming the new normal. In this spirit, several African governments have begun publishing contracts online so as to not be left behind and. Nigeria is even making its budget public record.
Increasingly, large companies and organizations are creating transparency reports and making considerable strides to building local communities through skills transfer and investment. According to the Global Reporting Initiative’s (GRI) Database in 2015 held a total of 5,454 organizations producing GRI-based sustainability reports. Of these, 296 were based in Africa. While that number does not seem large it accounts for almost 1,000% percent growth rate from 29 reports produced just ten years before in 2005.
Almost all of Africa’s GRI reports originate from one country, South Africa. As a handful of South African organizations began reporting they realized how financially beneficial sustainability has proven to be. They saw increased efficiency, preventative risk identification, improved stakeholder and shareholder reputation and engagement, in addition to the attraction and retention of high-caliber staff. As one organization benefited from sustainability reporting the organizations nearby began to take note and started following the trend. With a handful of reporters in Angola, Botswana, Cape Verde, Egypt, Kenya, Mauritius, Morocco, Nigeria and Zimbabwe, we expect to see a domino effect – with many more organizations and nation states following suit.
As environmental, social, and governance (ESG) reporting becomes more commonplace ESG monitoring systems will improve. The general public will grow accustom to transparency and will demand it. And with more transparency and community engagement, sustainable economic growth will emerge and help develop the African region. It has already started happening.
Interested in learning more? Join ISOS Group at Sustainable Brands, May 14-17 in Cape Town South Africa! We’ll be delivering a 3 hour hands-on session on alignment toward reporting efficacy!