Today South Africa is getting too much visibility for the difficult state of our national government. There are, once again, investigations into widespread corruption taking place and the term “statecapture” has recently become a part of common parlance amongst everyday people and the miracle that was worked by one of our nation’s heroes, Nelson Mandela, is being unpicked by politicians who have not understood the fundamental tenets of sustainability.
Memories are short, because it was many of these same politicians who were the young activists fighting against the other unsustainable period in our country’s history, the Apartheid.
The story I want to share is about two visionary senior corporate executives who understood the sustainability dynamics at play in South Africa in the 1980s, and show us what might be achieved if you dare to dream big.
Consolidated Gold Fields was a London-listed mining house, with its earnings heavily exposed to South Africa. The Director of Public Affairs at the time was a man named Michael Young who, together with his Chairman Rudolph Agnew, recognized that South Africa’s inevitable rebound out of the apartheid regime was ripe for a volatile transition, presenting the very real risk of civil war.
This danger of a messy denouement to the apartheid era – and the consequent threat to shareholder value at Gold Fields – prompted Agnew to authorize Young to secretly broker talks, privately, quietly and out of the public eye, between representatives of the apartheid government and the ANC. These talks resulted directly in the release of Nelson Mandela.
The rest is history.
There is of course no way that Young or Agnew or indeed any of the protagonists in the story could have predicted the extraordinary chain of events that then led to the remarkably peaceful transition that our country experienced in 1994.
Given the starting point, nobody would have dared to hope that things would go as well as they did.
But it is not an exaggeration to say that the eventual outcome was in part the result of the work that Michael Young did. It is certain to say that without his vision, foresight and action, the transition would have happened differently, and certainly not as peacefully.
It wasn’t just Gold Fields who engaged with the problem of ending apartheid. The Gold Fields' story is famous now because it formed the basis of the 2009 film "Endgame". But there were several other companies which had shareholder value exposure to South Africa, and which played equally important roles, just like Gold Fields, all very discretely and in the background.
No corporate executive chooses to tangle their company up in the difficulty of something as sensitive as ending apartheid unless they have to.
Those that did saw it was in the interests of their shareholders and believed they had no choice.
I see Sustainability very simply. Certainly in the corporate context, at its fundamental core, when you strip everything else away; sustainability is about protecting long-term shareholder value.
This is not to say that shareholders should be prioritized above all other stakeholders in the sustainability paradigm. In fact, on the contrary, I’d argue that if you focus on all the other stakeholders and get it right with them, your shareholders will be taken care of by default. But I focus on shareholders because from every company management team in the world, shareholders demand shareholder value. If management fails to deliver for their shareholders, they will be fired.
So the reality of the corporate sustainability mission must be embedded in shareholder value. Long-term shareholder value is generated only by looking carefully and acting courageously to support the sustainability of the business.
This is the elegance of the triple bottom line equation: as the story of Consolidated Gold Fields shows, social and environmental considerations feed directly into the financial interests of the company. Long-term shareholder value is simply impossible to achieve without them.
This article is an extract from a speech delivered by the author in Amsterdam, May 2016.