Sustainability and profit-making in Nigerian businesses

BY NNADOZIE ODINAKA

In recent years, sustainability has emerged as a crucial factor for businesses worldwide, including Nigeria. As companies strive for profitability, integrating sustainability practices into their operations has become essential for long-term success.

This approach is particularly relevant in Nigeria, where environmental challenges such as deforestation, flooding, and waste pollution are becoming more pronounced.

Businesses must adopt strategies that not only ensure profitability but also contribute positively to society and the environment.

The benefits of sustainability in profit-making are well-documented. According to a report by the United Nations Development Programme (UNDP), companies that embed sustainability into their business models often achieve higher financial performance and stakeholder trust.

In Nigeria, PwC’s 2020 report highlighted that sustainable business practices lead to increased operational efficiency, reduced costs, and improved customer loyalty, all critical factors in a competitive market.

These findings underscore the importance of aligning profit-making objectives with sustainable development goals (SDGs).

Several Nigerian companies are already setting examples in this area. Dangote Cement, one of the country’s largest conglomerates, has implemented a green manufacturing strategy that focuses on reducing carbon emissions and improving energy efficiency.

Lafarge Africa is another trailblazer, adopting circular economy models to recycle waste products into their manufacturing processes.

These initiatives demonstrate that integrating sustainability into core business strategies can yield significant financial and environmental benefits.

The renewable energy sector in Nigeria provides further proof of sustainability’s profitability. Companies like Rensource Energy and Lumos Nigeria are revolutionising access to electricity by providing solar-powered solutions to households and businesses.

By reducing reliance on diesel generators, these firms not only address the country’s energy challenges but also contribute to reducing greenhouse gas emissions. Their success underscores how innovation and sustainability can create new revenue streams while solving critical societal issues.

Globally, governments and regulatory bodies are increasingly demanding accountability for sustainability.

For example, the U.S. Securities and Exchange Commission (SEC) now requires companies to publish detailed sustainability reports, emphasising their environmental, social, and governance (ESG) practices.

This transparency compels companies to adopt measurable sustainability goals and report progress regularly. While Nigeria’s regulatory environment has not yet fully mandated such reporting, there is an urgent need for similar legislation to enhance corporate accountability.

Adopting such practices would not only align Nigerian companies with global standards but also build trust among stakeholders and attract foreign investment.

Accountability and transparency are key drivers of sustainable practices. Nigerian companies like Flour Mills of Nigeria (FMN) have set measurable sustainability goals, such as reducing energy consumption and waste production.

Regular reporting and stakeholder engagement enhance trust and ensure that sustainability remains a core part of corporate strategy.

Similarly, Guinness Nigeria’s collaboration with NGOs to provide clean water access exemplifies how partnerships can amplify the impact of sustainability initiatives.

Innovation is also critical in driving sustainable profit-making. A 2022 Deloitte report revealed that 63 percent of global executives believe sustainability fosters innovation.

Nigerian businesses can leverage this by exploring renewable energy, sustainable agriculture, and waste management solutions. For instance, renewable energy startups are not only addressing the country’s energy deficit but are also creating jobs and boosting economic growth.

In conclusion, the integration of sustainability practices into profit-making strategies is no longer optional for Nigerian companies.

It is a business necessity that ensures resilience, enhances profitability, and addresses the country’s pressing environmental and social challenges.

By prioritising accountability, fostering innovation, and collaborating with stakeholders, Nigerian businesses can build a sustainable future that benefits both their bottom line and the nation at large.

Nnadozie Odinaka is an MBA candidate at the Georgia Institute of Technology, Atlanta, USA