There is always a line in the sand – that point in time when things change, or a new direction is taken. Much of the work we do at Blue North is related to assisting leading agri-businesses to improve their supply chain efficiencies: making outputs exceed inputs, and reducing waste and environmental impact where possible.
In some cases, reporting on this process is an important marketing angle for businesses, yet this process is largely voluntary. Within the South African agricultural sector, there are no major legislative requirements that ask for sustainability scorecards, yet many agri-businesses are taking the initiative to set up measurement tools and reporting systems that enable them to better monitor their processes. This leadership action is in some cases driven by international pressure – the reality of playing in the international market space, both for the requirement of meeting retailers’ demands and to move ahead of the pack. But lately, it is almost equally driven by the need to reduce input costs in order to stay afloat in today’s economic climate.
Working within these increasing pressures makes one wonder when the industry will reach the proverbial “tipping point” for the mainstream adoption of sustainability criteria into business practices? And will it be reached through a carrot or stick approach?
In the past, within the agricultural sector, a phased approach to any new regulatory measurements has been adopted – a carrot before the stick per se. This process involves the primary introduction of the new concept through information sessions, brochures and newsletters. The next step is to create certain basic elements of the measurement and report “bonus points” within existing reporting requirements. Once there has been enough warning of the impending start date, the new measurement tool is made a mandatory requirement for certain qualifications. This whole process usually takes anywhere from 3 – 5 years, and is aimed at giving the industry members enough time to adjust to the new requirement, to get their ducks in a row before the “stick” comes in.
During this period of transition, industry leaders can take advantage of early initiation, and achieve a competitive edge for their efforts – staying ahead of the pack. But sooner or later, the reporting requirements become mandatory and everyone has to comply in order to serve a certain market or achieve a certain level of accreditation. The reality is that the leaders are few and far between. 80% of the industry will wait until they are forced to do the reporting; very few can see past the paperwork to realize the benefit of measuring in the management of their businesses.
The South African agricultural export industry is well known for its outstanding quality and good value. However, to maintain this market space within the current competitive and changing environment will rely on the ability to adapt, innovate and lead, separating the men from the boys. Blue North is fortunate to be working closely with many of these industry leaders. We look forward to the day when the adoption of sustainability reporting will become common practice, because it is this collaborated effort that encourages the scale of behavioral change required to make a truly meaningful impact.
Watch this space. It will be interesting to see who leads and who follows!