By Moses Nosike

Dr. Ijeoma Nwagwu, graduate of Harvard Law School’s doctoral programme and Manager of Lagos Business School’s First Bank Sustainability Centre. In this interview , she speaks on the present business environment: where the social and environmental impact of a business is as important as its ability to make profit. She also emphasizes the difference between Sustainability and Corporate Social Responsibility (CSR) and addresses the contributions of Lagos Business School in creating sustainable businesses in Africa. Excerpts:

How do you describe corporate sustainability?
Sustainability is a mindset. It is the idea of business leaders and operators thinking long term about the society in which they operate. It is being considerate of the social, economic and environmental impact of a business’s activities across the entire value chain through which it creates goods or services, while being mindful of the profitability of the business.

Dr. Ijeoma Nwagwu

What is sustainable development?
It is living, using, and managing resources of the earth in a way that plans and caters for both present and future generations. That is, businesses with a sustainable mind set think not just of today, but also  of tomorrow  in the use of human and material resources. In addition, they make efforts to have positive impact on the society, economy, and environment in which they operate. The UN’s Sustainable Development Goals is a great reference for the kinds of issues we mean when we advocate for sustainable development – an end to poverty, hunger and a move toward quality education, healthcare and so on.

Considering the societal challenges in Nigeria, how do SMEs achieve sustainability?
We have particular challenges relating to sustainable development and doing business, which Small and Medium Enterprises (SMEs) suffer most. In terms of the business environment, SMEs in particular are faced with the challenge of infrastructure. As presented in the World Bank ranking on the Ease of Doing Business, we are at the bottom of the list, and a lot is linked to the problem of infrastructure. Today we have issues of infrastructure, multiple taxation, lack of policy transparency, corruption, and governance and these have made SMEs complain a lot about the policy environment. It is a difficult environment to do business. So sustainability is very relevant in this environment because it makes businesses think of themselves as part of the society, and are able to contribute to infrastructural development in the environment they are operating. Critically, this situation forces SMEs to innovate around the challenges facing them on a daily basis. For example, we have seen small furniture companies forced into backward integration to create unique brands when they could no longer easily import and sell foreign furniture.

Is there any relationship between sustainability and supply chain?
There is a strong link. As I said, sustainability is a mindset – the way you look at the world. For instance, if you say, I have a sustainability mindset, you are saying that you are thinking of today and  tomorrow, using things, and managing resources, living in a way that shows you believe there is  tomorrow. There is a link between sustainability and supply chain. That is, when you think of your supply chain as a business, where you source your material; or your value chain in terms of your logistic network, and how you provide your goods and services.

With your sustainability mindset, you will consider how to make certain that small businesses or sole proprietors in your supply chain are in a good place so that  tomorrow you will find the raw materials or resources you need from your supply chain to continue production. With the way the world population is going, that is, about 7 billion people and in a decade or more we will be talking about 9 billion or more, smart businesses will realise that there will not be enough to go round and the resources we are relying on to produce goods from our supply chain will be limited. Hence, businesses would consider how to invest in creating a more sustainable supply chain. A very good example is Nestle. Nestle realised that its supply chain for Cocoa in West Africa had some issues; farmers were not producing enough, the quality of their produce was questionable and there was a mismanagement of the production line.

The company decided to invest in the supply chain so the raw materials will meet up with long-term projections. In this case, part of the development was to work with those poor farmers to support them through high quality seeds and other inputs to achieve high yield, invest in educating them. Presently, it is a win-win: lifting people out of poverty and getting better produce to be able to sustainably supply the needs of the company and ensure the future of the company.

In terms of regulation, do you think the government has helped to sustain businesses?
The government is doing more than before. However, they can still do more. One thing we must realise is that the government cannot do it alone. Gone are the days when businesses and communities had issues and everybody called on the government. All the same, government can do so much more, even in this environment. More funds can been allocated to ensure that SMEs are able to get the capital they need to pump into their businesses to produce more goods and services so that more jobs will be created in the economy. Also easy access to such funds must be ensured. Government can create policy transparency and let us know what their policies are or likely going to be over the next ten or fifteen years so that businesses can plan.

Not that people would invest long term only to discover  tomorrow  there is a change in government policies that constrain business environment in various sectors. Engaging people in policy process of the government can go a long way in building and sustaining businesses. In addition, investment in capacity building, which is something we do here in Lagos Business School: ‘Knowledge they say is power’. As much as SMEs cry out for financial empowerment, sometimes, what leads to the crash of some businesses is not capital but lack of proper planning and information. In Lagos Business School, we do a lot of capacity building. In addition, within the Pan Atlantic University, we have the Enterprise Development Centre, a special centre to help SMEs plan and guide their business growth so that they are sustainable in the long term. Moreover, of course, we have infrastructure and power, which are areas government has embarked on. Nevertheless, government can do more to improve on the efforts they have made on power generation.

What is the focus of Lagos Business School’s First Bank Sustainability programme?
The focus is engaging a range of businesses, from small to large multinational businesses, around issues of sustainable development and ensuring that business owners realise that it is no more business as usual. Nigeria is a hard place to do business. However, at the same time, we are here to support businesses grow and more importantly, grow sustainably while carrying the society along. Therefore, we support, conduct research, build capacity, engage stakeholders, and engage businesses with the society so that it will be a balanced and inclusive development.