# How Africa can satisfy consumer demands for sustainability Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-10-28 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: How Companies Can Embrace Sustainability in a Post-Pandemic Meta Description: Discover how companies in Africa, like Arkay Plastics, are setting sustainable examples, influencing consumer choices and investor demands globally. URL: https://financedigest.com/how-africa-can-satisfy-consumer-demands-for-sustainabilityhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/vintage-world-map-africa-sbi-301985963-1736837505533-compressed.jpg) _By_ **_Shaw Mabuto,_** _Partner and ESG Officer, SPEAR Capital_ Over the past 18 months of the pandemic, a lot of people around the globe have dramatically re-evaluated their lives. They’ve changed jobs, moved home to be in places better suited to the new working reality or closer to their families, and re-evaluated what they perceive to be important. One major re-evaluation concerned our impact on the planet. People were confronted with stark images of nature thriving in the absence of human beings during hard lockdowns [around the globe](https://www.financedigest.com/pain-of-breaking-inflation-will-reverberate-around-the-globe.html "Pain of breaking inflation will reverberate around the globe") and the fact that the pandemic was likely caused by humans encroaching on natural habitats. As such, many wondered how they could live more sustainably. In fact, Google searches for how to live a sustainable life [increased by 4 550%](https://blog.google/outreach-initiatives/sustainability/sustainable-living-tips-life-home/) during the pandemic. That increased interest won’t just affect people’s habits, but also the [companies they support](https://www.financedigest.com/mercia-partners-with-augmentor-to-support-the-next-generation-of-vr-and-ar-companies.html "Mercia partners with Augmentor to support the next generation of VR and AR companies") and make purchases from. That means [companies will be under more pressure than ever to act sustainably](https://www.financedigest.com/italys-eni-sets-up-sustainable-transport-services-company.html "Italy’s Eni sets up sustainable transport services company"). When it comes to doing so, they could do far worse than look at some examples of [sustainable companies](https://www.financedigest.com/green-cloud-one-way-your-company-can-commit-to-sustainability.html "Green Cloud: one way your company can commit to sustainability") in Africa. **Adding to existing pressure** Before looking at those examples, however, it’s [worth pointing](https://www.financedigest.com/service-the-cfo-why-context-is-worth-80-iq-points.html "Service & The CFO: Why Context Is Worth 80 IQ Points") out that consumers aren’t alone in pressuring companies to behave more sustainably. [Investors are increasingly demanding that the companies they back](https://www.financedigest.com/glencore-courts-120-teck-investors-for-bid-backing-as-spinoff-vote-looms-source.html "Glencore courts 120 Teck investors for bid backing as spinoff vote looms -source") meet environmental, social, and governance (ESG) standards too. In fact, ESG assets are [on track to reach US$53-trillion](https://www.bloomberg.com/professional/blog/esg-assets-may-hit-53-trillion-by-2025-a-third-of-global-aum/) by 2025. Notably, [pension funds](https://www.financedigest.com/boosting-business-growth-with-pension-funds.html "Boosting business growth with pension funds") (which control vast amounts of capital in many jurisdictions) are increasingly demanding sustainability from their portfolio companies too. Earlier this year, for instance, the Scottish Widows Fund announced that it would dump £440m of [company holdings that fail](https://www.financedigest.com/uk-to-fine-tech-companies-that-fail-to-remove-self-harm-material.html "UK to fine tech companies that fail to remove self-harm material") its Environmental, Social, and Governance (ESG) tests. In every way, therefore, it’s in a company’s best interests to operate sustainably. **Africa and sustainability** Given the kind of Africa-centric [stories that typically reach Western audiences](https://www.financedigest.com/new-documentary-the-princess-immerses-audiences-in-dianas-story.html "New documentary ‘The Princess’ immerses audiences in Diana’s story"), that might seem like a surprising statement. How can [countries grappling with corruption and wide-scale poverty offer](https://www.financedigest.com/bnp-paribas-offers-nexo-standards-across-14-countries-to-enable-fast-interoperable-and-borderless-card-payment-acceptance-for-european-merchants.html "BNP Paribas Offers nexo standards Across 14 Countries to Enable Fast, Interoperable and Borderless Card Payment Acceptance for European Merchants") lessons in sustainability? In actual fact, the situation is somewhat more complex. According to the [2019 Morningstar Sustainability Atlas](https://www.morningstar.com/lp/sustainability-atlas?con=12017&cid=RED_RES0002), for example, companies in South Africa have levels of ESG compliance on par with those in Italy, Belgium and Australia. Africa’s most developed [economy fares particularly well when it comes to carbon risk](https://www.financedigest.com/uk-economy-to-shrink-in-2023-risks-lost-decade-cbi.html "UK economy to shrink in 2023, risks ‘lost decade’: CBI"), carrying levels on par with those of Switzerland, the Netherlands, Denmark, Sweden, Belgium, France, and the US.  While [ratings will vary across African countries](https://www.financedigest.com/ecb-hikes-rates-throws-lifeline-to-indebted-countries.html "ECB hikes rates, throws lifeline to indebted countries"), many South African companies operate across the continent, indicating a widespread willingness to embrace sustainability. That tracks with our own [experiences as investors](https://www.financedigest.com/surrenden-invest-partners-with-david-phillips-to-offer-residents-and-property-investors-a-superior-living-experience.html "Surrenden Invest partners with David Phillips to offer residents and property investors a superior living experience "). Having worked extensively on the continent, we can attest to the opportunities available. This is especially the [case for anyone looking to find good companies where growth capital is needed and which offer good prospects for positive](https://www.financedigest.com/italy-probes-meta-over-abuse-of-position-in-music-rights-case.html "Italy probes Meta over abuse of position in music rights case") impacts. There are many [businesses that have been able to thrive in spite of the prevailing environment and lack of government support](https://www.financedigest.com/new-business-launches-to-support-it-professionalsfacing-mission-critcial-sector-challenges.html "NEW BUSINESS LAUNCHES TO SUPPORT IT PROFESSIONALSFACING MISSION CRITCIAL SECTOR CHALLENGES"). A good example of this from our own portfolio is Arkay Plastics. Even though the [industry it operates in isn’t traditionally sustainable](https://www.financedigest.com/applying-a-sustainable-lens-to-the-financial-industrys-future.html "Applying a sustainable lens to the financial industry’s future"), it’s working to be as sustainable as possible. It has, for instance, started supplying crates made out of recycled plastic to a major [soft drink](https://www.financedigest.com/russias-ochakovo-ups-soft-drink-bottling-capacity-as-western-rivals-leave.html "Russia’s Ochakovo ups soft drink bottling capacity as Western rivals leave") manufacturer in one market. **Investment and backing** With the right backing, innovative companies across the continent can grow successfully while at the same time making the [world a better place and providing returns to their investors](https://www.financedigest.com/certainty-in-an-uncertain-world-post-brexit-investors-turn-to-commercial-property-and-fixed-returns.html "Certainty in an uncertain world – post-Brexit investors turn to commercial property and fixed returns"). But they will need backing. And that’s where ordinary people can make the most difference when it comes to sustainability. By investing in [companies that operate sustainably, they encourage those companies to grow and continue with practices that make a positive impact](https://www.financedigest.com/the-severe-impact-of-downtime-on-companies-bottom-lines.html "The severe impact of downtime on companies’ bottom lines") on the world. Here, [private equity](https://www.financedigest.com/can-private-equity-do-for-africas-manufacturers-what-its-done-for-f1-and-rugby.html "Can private equity do for Africa’s manufacturers what it’s done for F1 and rugby?") (PE) companies have an important role to play. PE not only plays an important [role](https://www.financedigest.com/why-the-bank-branch-still-has-a-role-to-play-for-consumers.html "Why the bank branch still has a role to play for consumers") in diversifying investor portfolios but the companies that play in the space are geared to the long-term. Additionally, PE firms are geared not only to generate [returns for investors](https://www.financedigest.com/investors-seek-higher-returns-as-catastrophe-bond-issuance-slows-during-q2-according-to-aon-study.html "INVESTORS SEEK HIGHER RETURNS AS CATASTROPHE BOND ISSUANCE SLOWS DURING Q2, ACCORDING TO AON STUDY") but also to contribute to the overall wellbeing of the companies they invest in. In a world where the [future feels incredibly uncertain](https://www.financedigest.com/smes-facing-an-uncertain-future.html "SMEs facing an uncertain future"), it makes sense to back companies that are interested in making it less so, rather than the ones chasing the next, most easily available dollar. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---