Business Case for Environmental Sustainability in Nigeria
‘Businesses’ often ask why they need to integrate environmental sustainability (ES) into their strategy and operations. “What is in it for us” and “how does it add value?”
First off, we must understand that ES is a conduit for inclusive sustainable development. Any business (especially those with direct impacts and dependencies on nature) with plans for longevity should include the natural environment as part of their bottom line. The Nigerian economic sector is already under pressure to respond to the changing scenarios, which is forcing the review of traditional business practices. Some of these include scarcity of raw materials through depleted stocks, saturated markets, limited energy, and restricted access to innovative technologies among others. Consequently, any business still prioritizing financial capital over the environment and society does so at their own peril!
Secondly, it is already public knowledge that the impacts of businesses on nature are coming under increased scrutiny for best safeguard practices from consumers, investors and stakeholders. Investors are now not only attracted to stock prices and financial reports but also look out for aligned sets of data points on environmental and sustainability performance. At the financial space of the spectrum, an environmental management and safeguard plan is a prerequisite for funding large infrastructural projects. The International Finance Corporation Performance Standards (IFC PS) and African Development Bank’s policy on integrated safeguards systems are examples. National governments are also joining the party with over 100 governments either developing or have developed national legislation around environmental safeguards within the last decade. In Nigeria, the environmental impact assessment (EIA) law of 1992 and the sustainable banking principles of 2012 readily comes to mind. Without a doubt, reducing impacts on the natural environment has gathered momentum, not only to secure economic growth but also for environmental stewardship and social equity.
The third case touches cost and brand reputation. Every business owner likes to know how investments will reduce cost and enhance their social perception. If we consider natural and ecosystem services as element of business infrastructure, we can always leverage on them to reduce operating cost in the long-term. For example, edifices and roads construction that ensures the reliable and sufficient flow of waterways, or large-scale agriculture that allows the regeneration of productive soil. Through reconciling development and nature, ES can easily avert such reputational risks, reduce operating cost and yield opportunities that improve customer loyalty and allay stakeholder’s concerns.
Undoubtedly, ES is a long-term investment and should not be seen as a cost centre. If we want something in the short-term, then the way to go is superficial ‘green washing’ and one-off initiatives that just tick the box. Proper ES achieves long-term improvements in business outcomes and performance, which require bespoke frameworks and strategic directions with policy reinforcements. Of course, we can only harvest what we have planted, and not what we say we will plant; the act is in the action.
I will round this up in a succeeding piece with a focus on the role of government MDAs and regulatory bodies in ES while touching the uncertainties around its implementation.