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Is ESG just another buzzword or is something really happening in this space?
ESG stands for Environmental, Social and Governance. It is a system used to measure the sustainability of a company or investment in these three specific categories.
How does it work and what will guarantee its success?
“ESG is based on the idea that companies are more likely to succeed if they create value for all their stakeholders. It follows the concept of People, Planet and Profits, which was introduced in the 1990s,” explains Alison Wixley, Head of Legal and Risk at Bidvest Freight.
The Bidvest Group Limited employs approximately 132 870 people in six core divisions housing branded products, automotive, financial services and commercial products. While many Bidvest companies are already implementing ESG, the business has begun tracking reporting throughout the group.
“We have put together a team of dedicated employees to drive the process, chaired by the Commercial Director of Bidvest Freight,” says Alison.
“Bidvest International Logistics is strides ahead, particularly around environmental and safety initiatives. The company has entrenched and driven innovative and forward-thinking behaviour in safety and environment. For BIL it is a case of keep on doing what you are doing,” says Alison.
ESG a prerequisite in the tender process with multinationals
It’s no longer an option, according to BIL’s Willem Bekker, Supply Chain Solutions Manager. “We see it coming up a lot in tenders with large multinational clients, for example the automotive and fashion industries. As a first step in the tender process, they assess you on your ESG track record and initiatives. They are telling bidders to not even respond to a tender unless their ESG is solid and not just on paper. It is a sign of the market maturing to such a degree that ESG is starting to be taken seriously and is not just a tick box exercise.”
Bekker says ethics plays a big role in ESG. “Globally, large corporations are starting to demand that ethics come before financial reward. We all have a responsibility to limit our impact on the planet and to control the business system in which we operate. At BIL we strive to make a difference daily, in our choices and our actions. Transformation and social welfare are just two of our focus areas. It is what we do daily that makes a difference and not the face we put to the market,” he adds.
BIL has ISO 9001:2015 and ISO 14001:2015 certification
Lawrence Aldworth, BIL’s National Compliance and Risk Manager, has been driving the company’s compliance and risk standards for many years. “BIL was awarded ISO 14001:2015 in November 2021, after an intensive round of audits. It has many benefits, including being able to use the system to identify, control and reduce the number of environmental incidents that occur and to improve compliance to legislated requirements. We have also successfully converted our ISO 9001:2015 certification to a ‘BIL-level’ certification.”
Sustainable practices will provide the greatest return on investment
Bidvest Freight’s Wixley adds, “As millennials move into positions of decision making, they will choose to invest in and work at companies with a good ESG reputation. Investors will avoid companies that might pose a greater financial risk due to their environmental or other practices. Conversely sustainable practices will provide the greatest return on investment, making it easier for businesses to expand or enter new markets. In the future ESG will likely become part of financial reporting for publicly listed companies.
“Our goals for 2025 are: to reduce our carbon, water and waste footprint by a further 20%; to employ females comprising 35%-45% and African management comprising 50% of our South African businesses; and to become South Africa’s leader in supply chain transformation by targeting more than 90% local sourcing from suppliers with a Level 4 or better B-BBEE rating,” concludes Alison.