HEIDI BARENDS | World needs to view sustainability more holistically

“We do not inherit the Earth from our ancestors, we borrow it from our children.” – Indian proverb.

While environmental, social and governance (ESG) discussions are now front-of-mind for policy makers, governments and executives in major corporates, there are still big questions when it comes to how sustainability is defined in regulation, strategy and fund raising.

Clarifying this is going to be key to ensure that we responsibly borrow this world from our children. Climate change is a key discussion point, the UN Sustainable Development Goals (SDGs) feature in most integrated reports, and sustainability executives have become common in many large corporates and multinationals.

Governments are also introducing enhanced ESG regulation globally and locally. But, will these changes be enough for future generations? The accepted definition of sustainability is where we potentially fall short. In many industries, a product is viewed as sustainable, when the “in-use” portion emits less carbon or uses less water, with little consideration for construction, fabrication, manufacturing and ultimately management of its end of life.

Manufacturing and disposal often have the biggest environmental and social impact. For example, while battery electric vehicles (EVs) do not emit carbon in-use, disposed batteries can cause soil and water pollution that has a knock-on effect to surrounding communities.

This is perfectly highlighted in the renewable energy sector. Take wind turbines. The responsible recycling of wind blades once they reach the end of their useful lives could lead to a land fill challenge in years to come. This view does not take a “cradle-to-grave” approach to the use of valuable resources.

For example, two retailers with vastly different approaches to shopping bags can both tout sustainability credentials. The first may introduce reusable shopping bags that, while reducing single-use plastic, are non-recyclable. The other may use plastic bags, which use less resources in manufacturing and are recyclable.

Climate change has brought emissions into the foreground. Elements of water, soil health, biodiversity, education, healthcare, access to other essential services, and human rights, to mention a few, are discounted or forgotten, providing one-sided solutions that reduce emissions but may have vast unintended consequences in the future.

Micheal Braungart and William McDonough introduced the “cradle-to-cradle” approach, which provides solutions and approaches to view sustainability more holistically.

The value of this resides in the novelty of ideas and action that it proposes:• To ban the belief that human industry has to damage the natural world.• To study nature and use it as a model for creating things: “A tree produces thousands of blossoms to create another tree, yet we do not consider its abundance wasteful but safe, beautiful, and highly effective”; hence, “waste equals food” is the first principle the book sets forth.

The approach recognises that waste is simply a failure of design and encourages materials to be continuously up-cycled and reused.

These ideas and models must not only be integrated into regulation, but also in the development of sustainable funding models. While the concept of “doing no significant harm” has been introduced, the next iteration must encourage and mandate a cradle-to-grave definition, and eventually a cradle-to-cradle approach.

This will feed into sustainable funding models by financial institutions. As a leading developer of ESG funding solutions on the African continent, Absa is cognisant that it is not only important to be a responsible lender, but also a sustainable one. Sustainability is continually evolving. As the market matures, we look forward to pioneering new solutions. 

• Barends is head of sustainable finance at Absa Corporate and Investment Banking (CIB)