Commentary: ESG Reporting – Growing Together for People, with Purpose

"To reduce carbon, we need the cooperation of the public and private sector players, as this journey is challenging. We will face significant challenges in developing the correct frameworks within the country to measure and report on carbon."

By Christopher Flowers, MD, Kakuzi PLC

Ladies and Gentlemen, it is once again my privilege to have an opportunity to address you today at the launch of our fourth Environmental, Social and Governance Report – Growing Together – For People, with Purpose. As you know, ESG is a framework upon which companies develop and deploy their sustainability initiatives including how they identify, assess and manage risks that emanate from social and environmental issues that affect their entire value and supply chains.

Today, we are honoured that our Chief Guest Eng Ng’enocould make it to this event, fresh from Kenya’s participation in the just concluded 28th United Nations Climate Change Conference, popularly known as COP 28, held in Dubai.

At Kakuzi, we are all fully aware of the impact of climate change advancing on our country, families, homes, and businesses. We are all fully aware that our Government, in conjunction with international partners, are looking into ways in which we, as individuals and corporations, can mitigate what we now know to be a very precarious situation.

We sincerely applaud all for this effort because we know nature has formally ‘PUT US ON NOTICE’, as our legal friends are wont to say. Anyone who believes that we, as human beings inhabiting this precious world, have the luxury of time before we need to act is in denial of the stark reality that faces us. We are on notice, and we must act.

The news platforms are full of stories about carbon, carbon neutrality, carbon negative, carbon offsetting, carbon trading, carbon sequestration, and, to crown it all, de-carbonisation. We also hear too often about those wanting to paint a story of good but fundamentally changing nothing.

Our challenge as a company in the agribusiness field and as a society is to undertake climate actions that are meaningful, credible, and verifiable. We must do more than try to paint a picture that all is well or that what we are doing is enough or the perfect solution.

They say the best time to plant a tree was 20 years ago. The second-best time is now. As we travel this journey, we must steadfastly believe that what we do today is not enough. We must find additional ways to reduce our carbon emissions and permanently remove carbon from our atmosphere. In the words of the UN Secretary-General António Guterres, “Climate change is moving faster than we are, but we do not give up because we know climate action is the only path.”

Therefore, even as we launch our fourth ESG report, we do not stand before you today to pontificate or make pious claims about our environmental, social or governance standing. We stand here with the utmost humility stating only what we have done but the fact is that our promise to society must be one of continuous improvement to reduce more, reuse more and recycle more.

Even as we progress at Kakuzi, we must acknowledge the progress we have made as a nation. In very little time, we have made very good progress at the local and international levels and continue to attract admiration from other nations.

For example, this year, besides hosting the Africa Climate Summit, a precursor to COP 28, Kenya under President William Ruto and the team at the Ministry of Environment, Climate Change and Forestry, also managed to launch its five-year National Climate Change Action Plan (NCCAP) 2023-2027, Long-Term Low Emission Development Strategy (LT-LEDS) 2022-2050 and the Climate Change Act (Amendment 2023). This has been described as a showcase of African leadership on Climate Action through policy instruments and comprehensive laws that guide national and sub-national interventions.

Our enhanced Nationally Determined Contribution targets a 32 percent reduction in greenhouse gas (GHG) emissions by 2030.  We all have a role to play in achieving this ambition.

To reduce carbon, we need the cooperation of the public and private sector players, as this journey is challenging. We will face significant challenges in developing the correct frameworks within the country to measure and report on carbon, especially as we embark on Scope 3 emission tracking. The correct enabling environment for businesses to be incentivised to make long-term carbon reduction investments must form part of this strategy. If we do not do this, there is a danger of creating a ‘tick box’ exercise rather than one that leads to meaningful change. It is reported that only 15 listed firms at the NSE are consistently publishing their ESG reports, and I am glad Kakuzi is one of them.

Kakuzi donated 100 indigenous tree seedlings to Rubiru Primary School, and engaged in a tree planting exercise and sensitization of the school community on the importance of environmental conservation.

We often hear organisations say that agriculture is ‘green gold’. I am afraid to say that nothing could be further from the truth, and we need to change our messages to educate farmers on how to cultivate responsibly grown products with the correct traceability standards for sustainability.

Access to international markets is becoming more complex, with strict adherence to ESG standards almost at a mandatory level for many of our key trading partners. This is because many parties now appreciate that agriculture faces the greatest challenges to and from climate change.  The practice of simply telling farmers to plant a crop without explaining the complexity of sustainable farming needs to change.

According to a recent McKinsey & Company report, conversations about sustainable transitions have increasingly focused on agriculture’s effects on nature and society beyond climate change.

For example, worldwide, agricultural land covers half of all habitable land and is responsible for 70 percent of freshwater abstractions. In addition, food systems are the primary driver of biodiversity loss worldwide, and these systems have growing effects on biosphere integrity, human health, and food access. 

We at Kakuzi are fortunate that our predecessors invested the company’s resources to develop earth dams that hold the precious rainwater on the land for use in the dry season. In combination with careful water catchment management we have created sustainable irrigation resources which do not tap into fragile water or ecosystems.

Christopher Flowers, MD, Kakuzi PLC

In our view, supply chain due diligence covering environmental and water stewardship, modern slavery, business and human rights will become the headline topics for agriculture over the next few years. 

At Kakuzi specifically and in Kenya generally, we are well-placed to show our compliance with these critical issues on the local and international stage. We should not fear transparency and disclosure or being open about our challenges. We know there will always be those who do not agree or have a different view, but it is our view that it is our responsibility to showcase Kenya as a country where best practice in ESG is being demonstrated.

Beyond this launch, our Chief Guest, Bwana PS, I wish to extend an open invitation for you to visit us at our Makuyu, Murang’a County Farm and Orchards for a familiarisation tour. We further commit that at Kakuzi, we shall scale up our efforts to consistently track and measure our ESG impacts.

Let me conclude by taking you back to the late 1980s. I entered my university studies at that time by reading a book published just a few years before: ‘Our Common Future’. The World Commission on Environment and Development 1987 Brundtland report probably defined for the first-time what sustainability was and, perhaps more importantly, what sustainable development looked like. These are the foundations of what we now define as ESG. 

 This definition forms the essence of what we, as Kakuzi, believe is what we do in our Growing Together, For people, with Purpose, and I quote, “Sustainable development, read business, is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

 On this note, Ladies and Gentlemen, Distinguished Guests, I again appreciate your presence here today and your joint commitment to sharing in our collective responsibility to lift others as we grow.

Thank you!

This speech by Christopher Flowers, MD, Kakuzi PLC was made during the fourth annual Kakuzi ESG Report launch held on December 15, 2023, at the Fairmont Norfolk Hotel, Nairobi, Kenya.

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Dr. Hanningtone Gaya

Dr. Hanningtone Gaya

Kenya’s Dr Hanningtone Gaya, holds a PhD in Commerce in Business Management from Nelson Mandela University (NMU), is viewed as an authority in country branding and is the founder chairman of the Brand Kenya Board.

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