Happily nestled between industry giants, with the power to implement new systems and technologies, and people on the ground, who truly understand community needs, is ESG authority Kalnisha Singh.
“I am cautious about the term ESG authority – I don’t care much for the standards, frameworks and methodologies. What we now call ESG simply happens to embody values that I have long believed result in better business and a better world,“ she is quick to point out when answering questions from ESG Global.
Reservations about the term notwithstanding, the well-established development economist considers herself really fortunate to be able to integrate the ethos of sustainable development with the value of doing business better in most of the work she has produced over the last 21 years.
“I fell in love with the concepts of sustainable development during the early days of my undergraduate degree. It made sense to me that business could be structured without doing harm. And, coming from a significantly underserved community and a very humble, but hustling, household it made even more sense that doing business without doing any harm was the better option for society,” she explains.
“I started consulting at the ripe old age of 19! My start was accidental or predestined depending on how you look at it,” she adds.
Passing the test
Kalnisha’s initial foray into sustainability focused on the fields of industrial and economic efficiency, specifically, intergenerational business planning and industrial development as a mechanism to both enhance financial sustainability and minimise negative impacts on the environment and society.
It became more and more apparent to Kalnisha that plans with sustainability at the heart lead to great outcomes that have multivariate benefit. She cites the following examples:
- Localising supply chains reduces wasted time and costs in distribution/logistics, increases production efficiency, minimises carbon emissions in value chains, and boosts the local economy;
- Investing in people improves their wellbeing, and also happens to improve productivity; and
- Investing in bursaries through CSI initiatives enhances a company’s reputation, improves brand sentiment and therefore enhances brand value, and also potentially ensures a skilled labour pipeline for the business.
In a departure from the norm, the founding director KD Strategies is wary of the current obsession with ESG scorecards, viewing them as tools that prioritise passing the “test” over genuine application of principles.
“I am quite cynical when it comes to ESG scorecards,” she explains, “Most of us were taught how to pass an exam, but passing doesn’t mean you know how to apply the knowledge. It just means that you know how to pass the test.”
“ESG scorecards, dashboards and assessments have also increased the cost of participation – and effectively given businesses an out. I am increasingly hearing the complaint that it’s expensive to be ESG-compliant. When ESG becomes just a buzzword and check-box exercise, that undermines the very spirit of it,” she says.
Local is already global
Ironically, Kalnisha’s foremost bugbear at the moment is that South African companies are positioned to be international market leaders in ESG – yet they are not taking pole position.
“Yes, you read that right. See, love them or hate them, South Africa’s regulatory frameworks and legislation bring companies as much as 80-90% of the way to ESG compliance. Any local company will be largely ESG compliant if it meets national regulations and guidelines on skills development, employment equity, B-BBEE, health and safety and the King Code on corporate governance,” she reveals.
Secondly, she says, the problem is exacerbated when companies approach ESG as separate from core operations and other compliance activities for the business.
“Add-on ESG units tend to operate in relative isolation — and costly international consultants even more so. This leads to far too much ineffectual effort and wasted expense without genuine impact,” Kalnisha explains.
Thirdly, the actual values that drive ESG are really ethical standards, some of them universal and dating back as far as human memory. There are logical reasons why sustainable practices relating to the environment, society and governance yield long-term returns in many respects, including financial profits.
“Corporates forget all too easily that while terminology for ESG may be new, the principles are not. For everyone to win from ESG, all the stakeholders need to buy into the why of it — not just the what and how,” she says.
Areas to excel
The why of it is exactly where Kalnisha’s expertise comes into play. She has identified key areas where companies can excel:
- Explore local possibilities. The full value of ESG comes into play in practical application, often with very unique solutions for each region and organisation. The real value of ESG lies in context-specific practice. “International practice is not necessarily better, and it is certainly not always relevant. We need to remove ourselves from the subservient position of bowing to the developed world.”
- Conduct a well-informed business analysis process. It is worth finding out exactly what is being done with ESG initiatives across the company. With this understanding, the paperwork is a second step — and it is far more manageable. “There is a disturbing narrative around local companies’ ESG compliance struggles. South African companies are doing the work, but they are not equipped to track, report on and present it effectively.”
- Strategic Corporate Social Investment (CSI): Shifting focus from simply spending budgets to carefully selecting, allocating, and tracking projects can yield significant ROI for both companies and communities.
- Empower women: Championing gender inclusion, particularly relevant in South Africa’s context, aligns with ESG principles and offers measurable financial benefits.
See the multiple benefits of renewable energy solutions: South Africa’s energy challenges have positioned it at the forefront of renewable energy solutions, presenting opportunities for local companies to contribute to both sustainability and economic growth.
“As South Africans, our apologetic, subservient bow to the developed economies blinds us to the fact that we are positioned to be global leaders in ESG. Companies still find it too easy to throw money at the ESG ‘problem’, when in fact this is an area that is already half solved thanks to our existing regulatory frameworks. They simply don’t know it because departments operate in silos, ESG is misunderstood and the pressure for ESG compliance urges poorly informed (and costly) decisions,” Kalnisha says.
Dinner table conversations
Looking deeper into the ESG “problem”, Kalnisha points out that too many South Africans simply do not yet understand how far-reaching the benefits of sustainability can be.
“The everyday challenges businesses face do not make the trying South African economic climate any easier. Some of these are, indeed, ESG-related, such as electricity shortages, transport issues and unusually common waves of social unrest. This can leave the business sector constantly fighting fires, rather than preventing them. Sound ESG practices can go a long way towards preventing those fires,” she advises.
In bridging the gap between awareness and action, Kalnisha believes in fostering positive dinner table conversations about ESG by focusing on local successes like the tremendous opportunities presented by the local energy crisis; the cost of living crisis in developed countries shows that the grass is not greener elsewhere; the great strides being made in women’s empowerment; and the major role that South Africa is playing in the global rise of sustainability awareness.
“As South Africans, we have the opportunity to work together towards a humanity that is united in the true spirit of ubuntu. We can transcend the false divisions of politics, economics and skin colour with what makes us the same — our humanity,” she says.
“I believe the deeper ESG focus for South African companies should be what is intangible. What matters most in this country is not easy to measure. For example, the discomfort around diversity and inclusion remains, despite the integration we have on paper. That is where we need the work. It’s time to move from tolerating each other to really seeing each other,” she adds.
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