The importance of sustainable supply chains is increasingly becoming clear globally due to climate change, environmental pollution, modern slavery and the fast depletion of natural resources. African countries have started showing interest in adopting sustainable practices to make the world a better place to live. Policies aimed at increasing the use of renewable energy, reducing carbon emissions, protecting the environment and ensuring the efficient use of natural resources are being pursued across the continent.  

In this article, we discuss how companies working in Africa can lead the implementation of sustainable practices tailored to the continent’s unique opportunities and challenges.  

BENEFITS OF SUSTAINABILITY FOR AFRICAN BUSINESSES

There are many benefits of sustainability including; 

Improved market competitiveness: some customers prioritize ethical and responsible sourcing 

Cost optimization: sustainable practices reduce waste generation and recover the maximum value from resources which translates into lower costs.  

Enhanced brand reputation: sustainable practices reflect a positive image for investors, consumers and society at large. 

Boosts resilience: sustainable practices enable businesses to withstand shocks and adapt to various economic, social and regulatory risks. 

LEADING THE WAY IN SUSTAINABILITY  

1. Invest in Renewable Energy and Green Logistics  

Africa has abundant renewable energy resources such as water, sunlight and wind. According to the “World Sunshine Map”, Africa receives more hours of sunshine in a year than any other continent, making the potential for solar energy incredibly attractive. The continent is also endowed with a strong wind energy potential, especially in the Northern, Eastern and Southern regions. With the continent losing about 40% of the food it produces and several cases of uncontrolled disposal of solid waste, biomass energy is another renewable energy source with good potential.  

African businesses can invest in harnessing the power of these renewable energy resources to power office buildings, factories and warehouses. Installing LED lighting and using energy-efficient equipment will minimize the negative effects of energy generation from sources such as thermal power plants. Such investments are not only good for minimizing environmental impact but also for reducing operational costs and improving brand reputation. 

Green logistics operations such as the use of electric vehicles and the location of distribution centers closer to markets can significantly reduce carbon footprint. 

Case study

Cargill Ghana Limited invested in a 565KWh solar plant to generate power for its operations in an environmentally friendly way and to support a sustainable cocoa industry in Ghana. 

• Embrace Circular Economy Practices

The principles of circular economy prioritize the maximum use of resources through waste recycling, reuse and resource recovery. Developing a closed-loop supply chain design where waste reduction is encouraged, and materials are either reused or recycled contributes to minimizing environmental impact and reducing operational costs. It ensures that maximum value is extracted from each material rather than disposed of at landfill sites. This ultimately reduces the environmental impact of waste disposal and contributes to sustainable operations. 

Limit the procurement of single-use materials and prioritize those that can be used multiple times. For example, adopt a reverse logistics system where plastic packaging materials are returned for refilling and reuse rather than disposal. Source for materials from suppliers who have a similar service to ensure that the packaging materials of things you buy can be returned for re-use. 

It is beneficial to find alternative uses for waste materials and by-products where possible. For instance, instead of disposing of jute or paper bags, give them to smallholder farmers for packaging farm produce. Food waste can be sent to livestock farmers to serve as feed or can be turned into organic manure by fertilizer companies.  

Partner with recycling companies to transform the other waste products that cannot be reused or serve no alternative purpose into raw materials for other industries. Implementing take-back schemes can encourage consumers to return used materials for recycling or repurposing. 

Case Study

In June 2021, the Rwandan Environmental Management Authority and the Private Sector Federation signed a partnership to convert single-use plastics into pavement blocks showing a circular economy.  

• Promote Ethical Sourcing  

Ethical sourcing is at the forefront of sustainable supply chains, and it refers to a wide range of issues. These issues include monitoring unethical or illegal supplier business practices that affect your company’s procurement efficiency and reputation. For example, a bribery scandal can cost your company hefty fines and lasting reputational damage. 

It is important to include ethical considerations in supplier pre-qualifications, performance evaluations and audits to ensure compliance with social, environmental and legal requirements. This requires an understanding of your legal obligations and social expectations. 

Develop a policy that communicates your commitment to ethical principles and empowers your team to make decisions. Include ethical considerations in supply contracts and ensure implementation. Avoid sourcing products from unethical sources and support organizations that fight unethical practices such as modern slavery and human trafficking.  

Case Study

In Cote D’Ivoire, Fairtrade Africa advocates for ethical practices in the cocoa and coffee supply chains through comprehensive social, economic and environmental criteria which promote sustainable farming, decent work and fair-trading relations. 

• Support Local Supplier Development

Local supply chains are not only a source of strength but also a means for advancing sustainable and responsible practices. Geographically distant supply sources reduce supply chain visibility and the ability of companies to influence the activities, especially with tier 2 and 3 suppliers. Using local suppliers can allow for more sustainable practices to be encouraged, but local sources do not always meet requirements. Supporting local supplier development can improve this and allow for better visibility. 

Support small and medium-sized enterprises by offering expert advice, training, fair prices and better payment terms for goods and services. Build abilities of local suppliers to meet quality requirements, minimize environmental impact and follow sustainability standards. 

Case Study

In Nigeria, Nestle implemented a local sourcing program for raw materials like maize and cassava, reducing its reliance on imports while providing sustainable income for farmers and local communities. 

• Measure and Communicate Sustainability Performance

Measuring and communicating your sustainability performance is important for many reasons. It helps to understand the impact of sustainable practices, meet stakeholder expectations, show commitment, follow regulations, remain competitive and improve ESG ratings. 

Global standards such as ISO 14000 or the Global Reporting Initiative (GRI) frameworks enable businesses to measure their sustainability impacts and build investor and consumer trust. Reporting on sustainability performance highlights your achievements and helps find areas for improvement.  

Case Study  

Gold Fields has been reporting its sustainability performance using the GRI framework and its achievements have been ranked among the top 5 mining companies in the Dow Jones sustainability index for 10 years. 

A CALL TO ACTION FOR AFRICAN BUSINESSES

Sustainability must be viewed as a strategic business investment and not just a compliance requirement. By adopting these practices, businesses can drive impactful change by contributing to the economy, environment and society while improving their competitive advantage in global markets.