Redefining corporate success: The continued integration of sustainability in a post-COVID world

By Loshni Naidoo, Chief Sustainability Officer at the Johannesburg Stock Exchange

In the constantly evolving global corporate landscape, few roles have surged to prominence as rapidly as that of the Chief Sustainability Officer (CSO). Over the past decade especially, the rise of the CSO mirrors an unfolding recognition that the long-term viability of businesses is deeply intertwined with their approach to sustainability.?

At the turn of the millennium, sustainability was, for many firms, relegated to annual reports or isolated departments. Modern CSOs are no longer just guardians of corporate responsibility; they are strategic partners guiding businesses through an age of environmental and societal challenges.?

Their pivotal role ensures that sustainability isn’t a peripheral effort or a public relation gesture; but an integration into the company’s core objectives and strategies. They tread the delicate balance between short-term profitability and long-term societal impact, ensuring both coexist harmoniously.?

Yet, why this shift??

The seismic disruptions brought about by the COVID-19 pandemic acted as a magnifying glass, highlighting the vulnerabilities in our systems and the pressing need for resilience. As businesses grappled with unprecedented challenges, the workforce underwent a profound introspection with employees, confined to their homes and witnessing the larger societal impacts of the pandemic, prioritising values and purpose over salaries.?

For example, a Deloitte survey found that 49% of Gen-Zs and 44% of millennials said that they had made career choices based on their personal ethics.?

One also cannot discount the weight investors now place on a company’s sustainability agenda. In today’s market, a strong sustainability focus translates to resilience, innovation, and long-term value creation – the perception being that a company is better equipped to handle unforeseen challenges and capitalise on emerging opportunities. Beyond perception, there are now tangible metrics and benchmarks, from carbon footprints to societal impact, that investors increasingly rely on.

According to studies, sustainability can affect operating profits and increase productivity by up to 60%. Furthermore, companies with an inclusive culture are shown to have a 27% higher profitability and a 22% greater productivity, according to research.?

There are various financial and investment mechanisms that now directly intersect with the sustainability agenda, making it easier for businesses to raise capital and entrench ESG best practice.?

For example, the JSE launched its Sustainability Segment in 2020, a facility which makes it easier for issuers to raise debt for green, social, and sustainable initiatives. To date, there are 74 listed sustainability bonds on the exchange, with a total market capitalisation exceeding R46.1billion. The bourse also launched its Sustainability and Climate Disclosure Guidance in 2022 which aims to promote transparency and good governance, and guide listed companies on best practice in ESG disclosure.

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