The current expectations around environmental, social and corporate governance (ESG) performance include protection of the environment, social responsibility investments and corporate governance standards such as holistic accountability as highlighted in the latest King IV standards; in essence, overall good corporate citizenship promoting the holistic view that sustainability extends beyond just the micro business environment.
Local certification body JC Auditors MD Oliver Naidoo says ESG has evolved over the years with the framework continually embracing a wider range of criteria and stakeholder inclusivity.
He outlines that, in the 1980s, the Environmental, Health and Safety (EHS) movement promoted regulations for the reduction of pollution and sought to improve employee labour and safety standards.
“EHS paved the way for the Corporate Sustainability drive, which emphasised the protection of the environment using best practices that exceeded legal requirements.
”One of the criticisms of the Corporate Sustainability movement was that it was used as a marketing tool to overstate or otherwise misrepresent efforts and environmental impacts – a practice that is nowadays often referred to as greenwashing,” Naidoo avers.
During this period, the International Standard of Organisation (ISO) 14001 environmental management standard was published, specifically in 1996, which quickly became a tool for companies to effectively demonstrate their sustainability practices, he says. It was soon thereafter, in the early 2000s, that corporate sustainability then migrated to corporate social responsibility (CSR), of which corporate philanthropy was a key component, together with employee volunteerism.
“Finally, by the late 2010s and moving into the 2020s, ESG started to emerge as a comprehensive framework that includes implementing governance structures to optimally manage environmental performance, social impact, and inclusive stakeholder well-being,” Naidoo explains.
When considering ESG, “one is compelled to embrace risk management” as well as management systems that promote and entrench sustainability. There are a host of such ISO management standards, each of which is focused on a specific discipline, and all aligned to the philosophy of risk identification and implementing appropriate mitigating and improvement processes. As JC Auditors notes, these standards are quite firmly entrenched in the leading global economies with three standards being the most popular.
ISO 9001, which focuses on quality management, aligns with ESG principles in the sense that it actively promotes business sustainability by providing the client with the desired product or service level.
ISO 14001 focuses on the environmental impacts, espousing efficient use of resources and waste minimisation, including a commitment to the prevention of pollution.
ISO 45001, which concentrates on occupational health and safety, ensures the protection of employees and promotion of well-being by proactively identifying and mitigating workplace hazards.
There are three elements that are fundamental requirements of all these ISO standards;
Consideration of the needs and expectations of all stakeholders; adoption of a risk-based, structured process approach to business systems; and promotion of continual improvement to ensure the business keeps abreast of a constantly evolving landscape.
As stated, local certification body JC Auditors is actively involved in providing ISO certifications and it recently awarded ISO 14001 certification to Super Group’s Freight division.
Naidoo notes that “forward-thinking companies don’t just want ESG to be a marketing slogan, but actively look for innovative and practical tools to demonstrate their ESG performance. One such tool, the ISO 14001 environmental certification, provides evidence of an organisation’s commitment to the environment, specifically the prevention of pollution and responsible energy consumption.”
JC Auditors has been in the certification business for almost two decades and, he says, has a unique understanding of African industry across a wide range of business sectors, with a country-wide footprint and extensive expertise. The company has been steadily working on providing a wider range of solutions for companies across all industry sectors.
JC Auditors states that at the recent inaugural Africa Supply Chain Excellence Awards, JC Auditors and the Road Transport Management System (RTMS) were presented with the outstanding achievement award in the special projects category for the RTMS Project.
The firm states that, in May, a one-stop certification solution that delivers a simplified process for businesses to achieve certification to multiple ISO standards using an integrated audit approach was launched. “This cost-effective and innovative approach allows a single assessment solution for various standards and legislative requirements for a business, regardless of the sector.
“There is no duplication of processes or documents and instead of managing several systems, an integrated approach that is efficient and cost-effective ensures companies are meeting the necessary standards, and regulatory and legal requirements,” says Naidoo.
He concludes that there is no doubt that ESG will continue to evolve and adapt to the changing landscape in the years ahead, but adds that ESG need not be another compliance objective to be painfully negotiated but is rather a business fundamental that should be embraced.