Stepping up to the plate?

When BlacRock Inc’s chief Larry Fink speaks, boardrooms worldwide shake. As the world’s largest asset manager, with US$8,67 trillion in assets currently under management, his word is gospel and corporates have no choice but to listen. And we like what he has to say.

His utterances in his 2021 annual letter to CEOs which, to quote a recent column, “drives the conversation inside corporate America’s boardrooms for years” includes a strong message that companies “must have a purpose beyond profit”. This preceded the Business Roundtable’s statement on stakeholder capitalism and Fink’s call for corporate climate disclosures.

The Business Roundtable consists of the CEOs of leading US companies, representing every sector of the economy from retail, agriculture to banking and more, including such names as Jeff Bezos. These companies responded by pledging to make their mark on climate change, not just in name but by real action.

WHAT CLIMATE CHANGE MEANS IN SA

While Cyclone Eloise didn’t do quite as much damage as Cyclones Idai and Kenneth, in early 2019, it was the first time in recorded history that two strong tropical cyclones hit Mozambique within weeks. This caused massive damage, also affecting Malawi and Zimbabwe, with the ultimate cost seeing millions homeless, crops destroyed and people’s livelihoods in tatters.

The toll from Cyclone Eloise is still to be counted, but there will be a price to pay, not just in Mozambique but in many parts of South Africa where tropical storms raged, washing away roads and bridges.

These are not random events and their frequency is no coincidence. In February 2000 Mozambique was hit by the devastating Cyclone Leon-Eline, then was hit again in 2007 by Cyclone Faviom followed by Cyclone Jokwe in 2008.

Worldwide cyclones and severe weather events like these are increasing annually. The reason is now beyond doubt – climate change brought about mainly by global warming and, in large part, by a lack of interest from those responsible.

According to Burt Rodrigues, CEO of Biodx, we need to clearly demonstrate our global position, here in South Africa, by actively doing business with clients who rehabilitate the earth, such as responsible mining companies who cleanse their waste matter before releasing it into our rivers and water systems.  

“We want to stop dealing with companies who purposefully fool the official government inspectors time and time again,” he says.

“By doing this we will be joining Larry Fink’s movement to deliver purpose/impact before profit. Biodx is going to take the position that if, like many mining, manufacturing and industrial companies, you’re not going to treat your waste effluent effectively and stop polluting the earth, there must be consequences for you. Companies’ leaders have to stop thinking of their businesses solely as financial resources – they are LIFE resources.”

CORPORATE RESPONSIBILITY

Fink’s not satisfied with pledges alone and is asking companies to “disclose a plan for how their business model will be compatible with a net-zero economy.” He defines this as limiting global warming to 2°C above pre-industrial averages and eliminating net greenhouse gas emissions by 2050. And, with such financial power, Fink’s word holds a packed punch. Last year BlackRock voted against 69 companies and 64 directors for climate-related reasons and put 191 companies “on watch”.

While we don’t have the tools to monitor corporate SA in the same way, surely moral and ethical guidelines should count for something. “If South Africa is to be counted amongst countries that will be healthy going forward, we need to adopt an FDA-type style accreditation, which means companies proactively showing responsible behaviour to meet regulatory compliance frameworks and not waiting to be ordered to do so,” concludes Rodrigues.