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My feedback from the recent Sustainable Development Conference
Posted by Cornilius in Sustainable Development on November 2nd, 2009
We had a very good time of acquiring practical knowledge at the recent Sustainable Development Conference co-hosted by EconoBEE together with Kulima Solutions. The two-day event was an eye opener to the delegates who attended. Everyone was satisfied with the quality of the presentation and knowledge benefit.
The conference was hinged on the fact that something serious needs to be done with the unsustainable use of resources across the globe. Sustainable Development was defined as the “… development that meets needs of the present without compromising the ability of future generations to meet their own needs.” Many organizations throughout the world have talked about sustainability but less effort has been put into the practical issues of the subject. It looks like everyone is scared of one day waking up to a resource-depleted earth but nothing further is undertaken to avert such a possible danger. The presenter touched on Malthus’s Basic Theory which projects that one day the world will reach a point of crisis where the population will be more than the available resources. Companies especially need to revise the way they deplete the earth’s resources if future generations are to find anything at all. Closely associated with how people are imposing their demand on the earth’s resources is the concept of ecological footprint. This compares the human demand with the earth’s ecological capacity to regenerate. In simple terms it shows how many earths are needed to sustain the global population supposing everybody lives a given lifestyle. In 2005 it was 1.3 earths. On comparative terms more developed countries have a higher number of earths needed to sustain human life.
It was realized that there are three main aspects that the subject of sustainable development centers on – Environment, Society and Economy. The impact of climate change was emphasized. Developed countries emit more gases into the atmosphere which contributes to adverse climate change and unsustainable lives. In response to the scare of the changing climate and continued unsustainable practices by organizations the UN has convened a number of summits. Notably, the UN commission for Sustainable Development meets annually to discuss progress on combating bad practices on this subject.
The conference discussed the different reporting systems. Some of the systems that were discussed include (AA) 1000; ISO 14000; FTSE 4 Good; DJSI World Index; JSE SRI Index and the GRI. A practical session was held where delegates discussed how the GRI has been implemented by one of the biggest companies in South Africa. Some areas that the company had not considered which are obviously relevant where highlighted. This session opened the eyes, especially to those delegates who have not yet started on the reporting of sustainability in their respective companies. It was quite enriching because it examined practical issues and how best reporting could be done. Keith Levenstein of EconoBEE had an opportunity to present a very rich reporting system that is currently being used by one of the leaders in Sustainability reporting in South Africa. The web-based system makes it so easy and funny to report on Sustainability instead of it being a burden. It consists of a variety of questions that are analysed in a very understandable way that produces the most objective results.
The conference presenter emphasized the need for companies to move further in practicing the most “green” habits. With the guidance of the presenter, delegates were given an opportunity to share some of the initiatives that go towards promoting sustainable development in their companies. It was unanimously agreed that all companies should enlighten the entire workforce on the importance of conserving resources so as to maintain the earth sustainable. The co-operation of every department and hierarchy in the company was identified as a vital thing if sustainable development is anything to materialize in companies.
All companies have procurement
Posted by Cornilius in procurement on September 7th, 2009
Every company in South Africa has procurement spend. When the codes of good practice talk of procurement they include even the milk for the staff members’ tea, the paper for printing, the office fan, to mention but a few instances. More often companies tend to ignore the smaller amounts spend from their procurement calculation. This has led to some companies claiming that they are net importers and so they will not get any points under the Preferential Procurement element of the scorecard. The fact that imports are eligible exclusions from the scorecard calculation makes it sometimes even easier to score more points. Even more pleasant for a company that imports the majority of their procurement is the fact that the small amount of local procurement is likely going to be from small suppliers. The small suppliers are likely going to be EMEs (businesses with annual turnover below R5 million) or QSEs (businesses with annual turnover between R5 million and R35 million). For procuring from these businesses an entity’s spend gets an enhancement because such procurement counts under two indicators. More still, it makes the calculation of Preferential Procurement points easier to follow and also easy to get scorecards from the fewer suppliers.
Don’t fear your Verification Agency
Posted by Cornilius in Verification on August 25th, 2009
The reason why any company should produce a BEE scorecard is not to please their Verification Agency. In reality, the Verification Agency should not be in the position of dictating the whole process of BEE compliance. The company has all the responsibility to make sure that the process towards getting BEE compliant is effective and produces the desired result. The scorecard is essentially produced for the customer so that the company does not run the risk of losing business because of failure to produce a good scorecard. This means a company is actually supposed to work on the scorecard because they fear losing business from their customers. In most instances, the customer wants a scorecard with good points. The urgency to work on the scorecard should not be initiated by the Verification Agency. Verification Agencies are in no position to punish a company for failing to produce a scorecard. Therefore, companies should make decisions that ensure they have the best BEE scorecard points. Some companies have even gone as far as skipping important stages in the BEE compliance journey like getting a consultant’s help because they have been given undue pressure by Verification Agencies..
Black owned companies need the B-BBEE Scorecard
Posted by Cornilius in True Empowerment on July 23rd, 2009
There is a misconception held by some companies that are Black owned that they do not need to go through the compliance process. Such companies feel that the fact they have a high percentage or even 100% Black ownership and management they have met the B-BBEE requirements.
All companies in South Africa need to work on the B-BBEE scorecard. Ownership alone constitutes 20 points on the Generic scorecard (scorecard for companies with annual turnover of more than R35 mil) and 25 points on the QSE scorecard (scorecard for a company of between R5 mil and R35 mil annual turnover). Earning full points on the ownership element for either a Generic or QSE entity without points elsewhere does not make them B-BBEE compliant. The broadbased nature of the B-BBEE scorecard means all companies have to train their Black employees, buy from B-BBEE compliant suppliers, help other Black owned businesses to grow, donate to charity apart from other initiatives if they are to be labelled as truly empowering. This will speed up the process of emancipating the disadvantaged in South Africa.
What those Black owned companies that feel it unnecessary to work on the B-BBEE scorecard are doing is to drag and frustrate the process towards economic parity among the South African racial groups.
Appointment of new Reserve Bank governor
What will the detractors of BEE say now that a Black man has been replaced by a White person to head the South African Reserve Bank?
Personally, I see no problem with the appointment as long as she is the best candidate in the market. I have always supported the notion that BEE should make good business sense.
This appointment should send a strong message to those who think BEE is applied blindly on the basis of colour. BEE is about a progressive nation where every race is given an opportunity to contribute towards economic growth.
BEE points for large corporates for trading with smaller businesses
Posted by Cornilius in procurement on July 8th, 2009
The B-BBEE codes have encouraged the growth of small businesses (those with annual turnover below R35 million) and Black owned businesses through the element of Preferential Procurement. Generic companies (companies with annual turnover of more than R35 million) earn 8 points for spending just 25% with suppliers with annual turnover below R35 million as well as Black owned and Black women owned businesses.
This certainly encourages large generic companies to buy from suppliers who need support to grow leading to more empowerment of the more deserving entities and individuals. The growth of any company heavily hinges on the number of customers that they have. Having customers in the form of large corporates is more desirable for any small business because they have more capacity to pay for orders.
In other words, there is a benefit to the generic companies in the form of getting more BEE points while helping the sustainability of the smaller businesses.
EMEs need support
The goal of BEE is not to make life difficult for anyone. It is about affording opportunities to those who did not have them before. It is also about making life easier for those businesses with an annual turnover below R5 million. Making huge demands on them will be like militating against investment and national prosperity. One potential client of ours is an EME (businesses worth less that R5 million annual turnover) and needs all the support he can get in order to thrive. I have always said patriotic huge corporates should take it upon their shoulders to make sure such businesses prosper.
Small enterprises are crucial to economic growth
Large corporates in South Africa are failing to absorb the swelling number of candidates looking for employment. This is due to various factors. The most recent one being that they have felt the impact of the global economic meltdown more than the the small enterprises. Most processes in large firms require much more advanced skills and expertise. The other reason is that it is easier for huge corporates to employ from internal sources instead of going to the external labour market.
On the contrary, small businesses have been employing many potential job candidates. This is because they do not have the money to pay very skilled and experienced employees. They do not have the manpower to head-hunt or advertise widely. They do not have complicated processes that require very skilled people. As a result, they can afford to recruit newly qualified graduates. In so doing they are playing a critical role in reducing unemployment and poverty levels.
In view of this, large corporates can play their part by supporting small enterprises, most of which are Black-owned, and earn points under their enterprise development element of the scorecard. The support may not be directly monetary but it can be helping them market their products and services, training their employees, paying COD and allowing discounts. The small enterprises’ capacity to absorb more people from the labour market will be boosted as a result. By so doing the BEE goals will be met sooner rather than later and the economy will grow at a better rate.
BEE now than later
We cannot deny the fact that race was used to afford some South Africans chances to get the best education, jobs, business opportunities, housing, infrastructure among other things. This to me means it is only race that can be used to redress such wrongs. What counts most is the motive. The apartheid motive was evil while the motive behind the current BEE is noble. If we use a different criterion we will not achieve the desired results. Some commentators argue that there are poor Whites who should be considered in programs like BEE. My argument is that regardless of how effective apartheid was in giving Whites the best opportunities there were bound to be those who were even lazy to carry their bed into a mansion that they were not paying rent for. There would still have been those who were lazy to walk to a supermarket metres away to buy subsidized food. There would still be those who would feel lazy to queue for free welfare grants.
Surely no one is to blame for this.
My greatest fear is that if the issue of equal access to the resources of the country’s is not addressed now it might be difficult to try it in the future. It will be difficult to motivate its execution at a later stage because there will be a new generation with little appreciation of apartheid serve for what they read in history books. Then it might be done and hurriedly and using costly methods to the entire nation. The other danger is that it might be propelled by a mass uprising of the poor Black population.
My advice is that it’s better done now then later because the fact of the matter is that it is necessary to do it if co-existence of races is to be achieved.
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