Working together: Fire ravages the Overberg mountains in the Western Cape in 2016. Farmers and helicopters from the airforce worked to subdue the blaze. File picture: SUPPLIED
Working together: Fire ravages the Overberg mountains in the Western Cape in 2016. Farmers and helicopters from the airforce worked to subdue the blaze. File picture: SUPPLIED

As the Western Cape braces for another winter of below-average rainfall, environmental challenges have become the new normal, which demands a new response from business.

Climate change, increasing income inequality and political instability are some of the many global challenges prompting companies to seek a better understanding of the risks and opportunities posed to the long-term welfare of shareholders and stakeholders.

Research from the Embedding Project, a global public benefit research project, indicates that there is a growing recognition from companies that they need to commit to operating within a set of socio-ecological thresholds that consider longer timelines and have a broader understanding of value creation — and that they have to report their performance on managing these issues.

There is also a growing understanding of the central role of business in developing "community resilience", a term that is increasingly finding resonance in SA’s discourse, which refers to a community’s sustained ability to use its available resources to respond to, withstand and recover from shocks such as droughts, fires and economic crises.

Building community resilience is a complex undertaking that involves a host of inter-related system elements, which implicate diverse role-players. To respond to this complexity, leading companies are starting to establish innovative partnerships with some role-players — especially municipalities, which play an important role in facilitating local economic development — to achieve shared objectives.

In SA, companies including Woolworths, Santam, Nedbank and AngloGold Ashanti have reached out to local and district municipalities, along with other role-players, with the aim of enhancing local economic development and ensuring the sustainability of their business operations. Several of these partnership stories have been captured in case studies written up by researchers from the University of Cape Town Graduate School of Business, which co-ordinates the work of the Embedding Project in SA.

Realising that water security is becoming an increasing risk for its suppliers of fresh produce, Woolworths teamed up with WWF SA and other partners to work with farmers in the Ceres valley and surrounding areas to explore ways of increasing water efficiency. Many farmers were already implementing sophisticated water efficiency measures, but there were bigger problems beyond the farm boundaries.

Among the many issues, such as catchment management, the partners identified the spread of alien plant species that consume much more water than indigenous plants and cause greater fire risks. Eradicating alien vegetation in the Breede River catchment became the objective of the partnership.

Santam partnered with the Eden District Disaster Risk Management agency as part of its Partnerships for Risk and Resilience initiative to reduce loss of life and assets due to disasters, specifically fire and floods. Its clients and poor and vulnerable communities without formal insurance cover were a focus of the project.

Municipal disaster risk agencies have a statutory responsibility to reduce risks by, for example, flood mapping and preventing building in flood areas. They, however, often struggle to meet their responsibilities, given financial and human resource constraints.

Co-operative Governance and Traditional Affairs Minister Zweli Mkhize recently highlighted in his 2018 budget vote that 87 priority municipalities are distressed or dysfunctional. At a recent South African Local Government Association workshop, it was projected that 91% of municipal revenue comes from operational grants.

Simon Morilly, senior manager for stakeholder programmes at Santam, captured the urgency for transformative collaboration when he said at a recent public workshop hosted by the Embedding Project: "The sustainability of our organisations is dependent on our ability to co-operate and partner with each other to achieve our respective business objectives."

Co-operation between business, the government and the broader community does not come easy because of the historical trust deficit between the private and the public sectors. To help overcome this, business should start to ask the right questions and its leaders should be open to engaging with a wider pool of stakeholders. Communicating successes and building up resources to assist this are key.

Forging effective community resilience strategies is not a nice-to-have but a necessity for business today.

The World Economic Forum has identified climate change as one of two key threats facing the world economy.

The Global Risks Report 2018 examines five categories of environmental risks: extreme weather events and temperatures; accelerating biodiversity loss; pollution of air, soil and water; failures of climate change mitigation; and adaptation and risks linked to the transition to low carbon.

All are ranked highly on likelihood and impact. These risks are interconnected as they have the potential to destroy the systems that underpin societies and economies.

All role-players need to recognise that the best chance of building a resilient future is to do so together.

Makaula is a research analyst at the UCT Graduate School of Business and the Embedding Project.