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Unlocking sustainable growth is every organisation’s goal. In practice, there are complex challenges to identifying growth opportunities and unlocking their value over a sustained period. The process begins with purpose-led strategies that build trust over time with customers, clients, communities and other stakeholders

Trust is earned and needs to be reinforced consistently, whereas the focus on sustainability is increasing, from all angles. How can organisations unlock sustained growth and outcomes whilst reinforcing trust in their wider purpose?

Navigate complexity by focusing on values

Balancing short-term operational demands with efforts to build long-term resilience in the face of rapid (and sometimes unpredictable) change, organisations and their leaders have no choice but to prioritise. When action is needed on timely or sensitive investments and business model changes that will serve the company over the long term, for example, the focus needs to be on how those investments will unlock sustained value. With their values as their “true north”, they can navigate complexity and prioritise effectively. 

Priorities include environmental risk factors that are not only increasingly urgent, but also highly complex and often unpredictable. They are also significant risks to resilience and sustainable growth. The World Economic Forum’s Global Risks Report 2023 indicates that today’s most significant environmental risk factors — a failure to mitigate climate change and an inability to adapt to climate change — will remain very significant risk factors in ten years’ time. In other words, there is too little action on these risks now to temper the future relevance of them. They will still be problematic and unpredictable and increasingly serious, and therefore environmental sustainability is likely to remain a priority.

By communicating the risks of inaction and the benefits of proactive collaboration, organisations can highlight the potential consequences of addressing sustainability challenges. Societal and financial outcomes can be sustainable, inspiring growth and development. For example, according to the World Weather Attribution group, the extreme rainfall in KwaZulu-Natal during April 2022 was twice as likely due to climate change. Clearly, there is increased risk associated with inaction. But by working together, the public and private sectors can help to address some of the underlying factors which contributed to the damage caused by extreme rainfall and reinforce resilience to help mitigate these events in the future. Collaboration and shared values can also help reduce emissions and other activities that contribute to climate change.

Leverage ecosystems and collaboration to deliver measurable value

Ecosystems play a critical role in creating and sustaining value for organisations and society.

Every organisation operates in a wider ecosystem— a network of interconnected organisations, individuals, civil society and governmental and other institutions. If this ecosystem works together to create positive economic, social and environmental outcomes, the structure will support sustainable growth and contribute positively to the environment and society.

Collaboration between industry players, communities, regulators, policymakers and public sector organisations can support an enabling environment for sustainable growth. Collaboration through shared values (such as social inclusion and sustainability in South Africa) can support the development of policy frameworks, incentives for sustainable behaviour and investments in infrastructure and technology.

Private sector organisations use ecosystems to reach new customers and develop new products and services. Ecosystems also harbour risks and challenge sustainable value creation. By collaborating and participating in efforts to strengthen the wider ecosystem, organisations can reap greater rewards and build more trust in their overall purpose, brand and reputation. For the public sector, there is much to gain by working collaboratively across the wider ecosystem, maximising skills and resources across the value chain to achieve objectives like socio-economic development. 

As local results from PwC’s 26th Annual CEO Survey highlight, there is growing pressure from stakeholders for South African organisations to take responsibility for their impact on society and the environment. The survey also found that South African companies are most likely to collaborate within their industry and with competitors to address societal issues. In turn, they are least likely to collaborate with entrepreneurs and start-ups. 

Entrepreneurs and start-ups may have a different and complementary understanding of communities, people and their surrounding areas, and may bring a practical and pragmatic approach to solving problems. Established corporates can contribute operational excellence, distribution and commercial insight, financial rigour and a legacy of trust to the table. Working together, they could make more of a difference to support the wider ecosystem.

Promote a shared vision for sustainability and value creation

To derive full benefit from a sustainable ecosystem requires continuous communication among the ecosystem’s stakeholders in a transparent and timely manner and working together in the co-creation of value and new ways of working. 

To walk this journey with investors, capital markets and other stakeholders, organisations must promote their evolved way of thinking and communicate the risks of inaction, demonstrate the rewards over time of sustainable initiatives, and address the perceived now-versus-later trade-offs involved. Capital markets have a significant influence on corporate behaviour and the allocation of resources and a shared understanding of sustainable value creation is a key step to achieving a joint vision. Developing new metrics and frameworks that go beyond financial performance and compliance and capture the full range of value created by companies will enable companies to promote socio-economic development and sustainability goals in a mutually reinforcing way.

Contribute to a more equitable future for thriving communities 

To operationalise the ecosystem mindset, organisations must reflect their role in creating jobs and driving economic growth in their sustainability goals. This, in turn, requires companies to adopt a more nuanced and context-specific approach to sustainability that takes into account local communities’ needs and priorities.. The more unequal a country is, the more critical this approach is.

Organisations also must prioritise short-term results and one way of doing this, while having a long-term vision, is to invest in sustainable initiatives now that improve operational and resource efficiencies, enhance their reputation, and attract and retain top talent. These initiatives have demonstrable, measurable value over the short term as well as long-term benefits.

To establish themselves as leaders in their industry, they need to take a proactive approach to understanding and accessing new markets and revenue streams. Actively pursuing socio-economic development and other sustainable initiatives (like reducing an organisation’s environmental footprint) in the execution of these strategies will most likely require changes to the current business model and the organisation’s culture. However, acting on this now will set an organisation on the path to a purpose-driven organisation, achieving long-term value. 

Creating holistic value and delivering sustained outcomes

Sustainability pathway to a purpose-led organisation creating value for the organisation and building thriving communities

Organisations also need to address the perceived trade-offs between value creation and financial profit. This perception is a mindset that needs to shift; by contributing to a resilient and adaptive ecosystem, engaging with stakeholders and building consensus around a shared vision, organisations will create a more holistic understanding of their total value. By involving diverse stakeholders collaboratively, South African organisations can identify win-win solutions that build trust and deliver sustained outcomes. The challenge is to take the first step, then another and another. Every step counts towards the momentum we need to unlock sustainable growth. DM

Lullu Krugel: Africa Sustainability Lead, South Africa Chief Economist, Strategy& Partner

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