OBG Business Barometer: Sustainability and environmentally friendly business practices in Africa

In French

How does the idea of sustainable and environmentally friendly commitments evolve in Africa?

What is the degree of maturity of Africans companies regarding the deployment of operational practices respectful of the ecosystem?

It is from this angle related to ecological transition that the British economic research firm Oxford Business Group, in partnership with Thinkers & Doers, has decided to explore the General Assembly of Citizen Entrepreneurs and Organizations. The methodology was to directly address African business leaders by adding a specific question within the business barometer that OBG conducts on a regular basis on the continent: the CEO Survey. For two months, in eight different countries, our teams asked leaders they met face-to-face to give their perception of the level of environmental commitment of companies in their respective markets.

In Algeria, Côte d'Ivoire, Djibouti, Egypt, Ghana, Kenya, Morocco and Nigeria, these general managers delivered their feeling on this major point of remodeling the business model in a more virtuous scheme in terms of societal commitments, sustainable development being one of the key axes identified in this transition, along with governance, financing methods, new philanthropy or education.

Modeling the qualitative question:

To what extent are companies (in the country where you are based) committed to adopting sustainable and environmentally friendly practices?

Among the 150 responses gathered, a first observation emerges very clearly: the majority of companies on the African continent do not yet consider the establishment of environmentally friendly practices as a priority.

49.1% of respondents consider that companies are not very engaged in adopting environmentally friendly practices.

64.9% of respondents believe that companies in their respective markets are "not very committed" or "not committed" in adopting sustainable and environmentally friendly practices. This reflects both a scale of priorities of companies on the continent still not geared towards ecological transition, but also a still low sensitivity of consumers on these themes, a conclusion widely shared by the leaders interviewed. So there is still work to be done to create synergies and good practices in order to push African companies to integrate green commitments into their business model.

It must be recognized, however, that these figures are also encouraging. 31.13% of the managers surveyed consider that companies present in their market are "fully committed", "strongly committed" or "committed" to the implementation of environmentally friendly practices; with, in these results, an overwhelming majority of "committed" companies (25.17%). In economic environments that are still maturing, where the natural priorities of managers are often more related to profitability, market stability, sources of financing or the quest for tailored labor, these results, witnesses of the evolution of the ecological commitment of African corporations, remain promising.

Large Groups: Show the Example

By looking in more detail at these results, other interesting points can also be identified. Among the leaders of companies that have answered "completely committed" to the question of OBG's Business Barometer, a large majority of them are at the head of large multinationals, such as Philips, Vinci Constructions, Total or Bank of Africa. Their resolutely optimistic vision of the ecological commitment of companies in their respective sectors is undoubtedly influenced by the good practices applied by their own organization in this area. However, this shows that large groups, by their way of steering their activities in Africa, can have a real synergistic role in bringing smaller local and international companies to reproduce their approach. By drawing in their wake their respective ecosystem, sometimes by imposing rigorous specifications in terms of environmental obligations, these large groups can generate a multiplier effect aimed at inking the mechanisms of citizen engagement throughout the economic sphere of the country where they operate.

The Financial Sector: A Key Vector

Another interesting reading grid can be identified through the sectorial prism. Indeed, among the 31.13% of leaders who responded positively to the question asked, by selecting the answers "fully committed", "strongly committed" or "committed", there is a significant presence of companies operating in the financial service sector (banks, insurance, microfinance institutions, capital markets, etc.). 35% of companies that responded positively to the environmental commitment of companies in their respective markets operate in the financial sector. This is an encouraging element, which demonstrates that African financial actors are increasingly sensitive to the environmental commitments of the companies they work with. Like the big groups, the financial sector has a role of leader and accelerator of the "scaling-up" phase currently underway. Financial service providers can make companies that are most reluctant to societal commitments reconsider their model by imposing new requirements in this area. Banks, insurance companies and capital markets players are major vectors for wider and faster diffusion of corporate citizen solutions.

A state-of-the-art public sector?

One last interesting point emerges from the results of this African barometer: optimism, real or fake, of public-sector companies. Although only 8.61% of leaders having answered the survey at the head of a public group, an overwhelming majority answered very positively to the question on the environmental commitment of the companies operating in their country.

Only 8.61% of respondents manage public companies. 

In fact, 64% of these executives of public companies consider that the economic sphere of their country is committed, strongly committed or completely committed to the adoption of sustainable practices and favorable to environment. The duty of reserve of the men and women managing these large state groups may partly explain the strong optimism of this result, even though the answers were collected anonymously. Another explanation is probably the high environmental requirement of these companies when they issue tenders. However, this is a data that remains promising because the state entities, under the impetus of the states themselves, must be leaders in terms of collective commitments. Part of their DNA is to have a positive social impact on the populations. This ambition deserves to be shared and passed on to local suppliers and service providers linked to these state groups, with a view to generalizing the incorporation of societal commitments within the business model of the entire economic sphere. 

It can therefore be concluded that the generalization of sustainable and environmentally friendly practices is showing encouraging signs on the African continent, but above all, this can be effectively promoted by certain actors in order to accelerate the changes that have taken place and extend their impact to the whole economic sphere. These impulse drivers are large groups, financial sector companies and public entities, which together can consolidate and extend societal commitments to the majority of players in their respective markets.