SHAUN |KHAEB MACDONALD: Putting the ‘I’ into ESG

Corporate SA has increasingly focused on environmental, social & governance (ESG) standards over the past few years. This is commendable, given the need to shine the light on the effect business has on the world as a whole, rather than a narrow focus on achieving and exceeding profit-related targets.

ESG is a recognition that businesses have to be responsible for their conduct. For those in SA, and corporate SA in particular, including indigenous peoples in ESG accounting is becoming an expectation.

Canada has already given birth to these discussions as it progresses under the guidance of the international mechanism known as the UN Declaration on the Rights of Indigenous Peoples (UNdrip). In Canada the discussion is not if, but  how to include the “I” in ESG.

Within UNdrip the rights of indigenous peoples include what is called “free, prior and informed consent”. Businesses are expected to be informed on these rights, to avoid or limit future risk. Corporate Canada has recognised that it’s a necessary discussion if it is to avoid the costs of not factoring in its indigenous peoples.

To businesses this means that when economic development occurs, specifically when it affects indigenous peoples, these communities must be correctly engaged and their consent obtained.

In the SA context this now a reality too. Over the past 12 months there has been noticeable evidence of this. In Cape Town, the redevelopment of the River Club, which seeks to host the African head office of Amazon, has encountered numerous delays due to the indigenous peoples factor.

Off the Wild and West coasts of the country attempts to conduct seismic surveys was eventually halted on that basis. What should be noted from those cases is that although government had signed off on the projects, the courts applied their minds, exercised integrity and ruled in favour of the rights of indigenous peoples.

The indigenous factor

As the energy crisis unfolds in SA the renewables sector would do well to take heed of the need to focus on the indigenous factor. As we educate and empower ourselves with our rights and share this knowledge, more instances of the “free, prior and informed consent” principle not being adhered to will undoubtedly come to the fore.

Where the property required to develop renewable energy solutions is under the custodianship of indigenous peoples, the principle must be applied. Considering that the Northern Cape is home to many indigenous communities, and this is where the bulk of solar projects (such as the Prieska green hydrogen plant) are being developed, avoiding delays that may arise as a result of not applying the principle will be of critical importance.

These cases will assist in raising awareness of current events that speak to indigenous affairs, and understanding how they are shaping the future of business in SA. As an investor, ignoring or being oblivious to the rights of indigenous peoples could have financial implications.

The ESG Africa Conference, which is to be hosted in Sandton towards the end of October will be an opportune time and platform for the indigenous factor to be discussed, and for businesses to start redeveloping their ESG strategies.

For indigenous peoples these are exciting times because we identify this as an opportunity to engage with corporate SA in a meaningful manner. Through ESG we now have an opportunity to advance the indigenous economy. Commercial agreements such as the Rooibos tea benefit-sharing agreement are a case in point, with many more surely to follow. The indigenous economy remains for the most part an untapped market, but one that has the potential to boost SA’s economy.

Through mechanisms such as UNdrip, which was adopted by the SA government in 2016, the number of indigenous business people and indigenous-owned and operated businesses is growing. These mechanisms mean indigenous people are now better empowered to engage with corporate SA. We are ready to help companies navigate the indigenous variable they now need to factor into the ESG discussion.

• |Khaeb MacDonald, an indigenous business leader, is CEO of The Khoeporation.