Thursday, June 20, 2024

How interest groups can drive eco-growth


In this day and era, the resource revolution and advances in information technology, nanotechnology, material, science and biology radically change stakeholder engagements.

These mean robust economic growth will be at a much lower environmental cost than in the past due to broader deployment of better, cleaner technologies and development of more adaptive business models.

Sustainable management practices will become a corporate priority due to growing mutual interest in environmental and social sustainability from different stakeholders including policymakers, wananchi and civil society organisations.

In addition, regulatory bodies require more proactive sustainability management practices. Consumers are more concerned about organisational approaches towards sustainability footprint, prompting firms to improve their environmental and social performance.

In 2022, mass awareness about sustainability will be a definite expectation. Recently, I carried out a study covering East Africa and focused on the stakeholder’s pressure on companies regarding sustainable behaviours. Moreover, customers are subjecting companies to the lens of sustainability.

Previously, companies were only shareholder-centric. However, today they also have to be stakeholder-sensitive to implement sustainability strategies. More firms will introduce eco tags, change their production and servicing modes to match a sustainable delivery of products and services.


On the regulatory front, the Central Bank of Kenya and Capital Market Authority are implementing and exploring more stringent regimes on matters sustainability. It is just a matter of time before others join the bandwagon. I hope that emission reduction regulation and ambitions will keep getting tighter, reporting and compliance will be enforced strictly as we go forward.

Stakeholders or ‘interest groups’ will become critical drivers of sustainable practices within the organisation. Hence, the managers and the boards need to have a deep conversation on organisation sustainability strategies if they wish to share value with their stakeholders.

Furthermore, these stakeholder relationships of an entity can pressure firms to become more responsible.

Nonetheless, by definition, these stakeholders are identifiable individual(s) or groups interested in corporate undertakings and control resources needed by the firm for its profitability, stability and growth.

Consequently, in need of interested parties’ resources (capital, market, legality, reputation, and inputs), the organisation must create a sense of being worth, in other words ‘legitimate’. This is done by defining the stakeholders and developing relationships to serve their interests, such as environmental and social friendly business processes and policies.

An excellent example of the effect of the stakeholder’s pressure is where stakeholders aim to reduce the degradation of natural environment by adopting environmental plans and policies.

These plans reduce the carbon footprint from business activities-actions, decisions, and goals. In addition, they affect the energy efficiency and resources management within the organisation which are the means that they can undertake to reduce their environmental footprint.

In a world of dwindling natural resources and fierce marketplace competition, a business should learn best practices from peer industries and use their internal human skills to enhance sustainability productivity and efficiency. Therefore, using subject matter experts to help the business design and implement sustainability strategies will be a future phenomenon.

Corporate sustainability behaviour will be driven by three forces; Mimetic pressure involves a situation where an organisation experiences uncertainty about its own activities resulting in imitation. Coercive pressure, resulting from government-related agencies, and pressure from significant customers, will make companies operate in a sustainable way in order to gain legitimacy.

The last is the normative pressure that emanates from employees due to influences on organisational norms, values, and beliefs leading the firms to implement sustainable practices.

It is important to note that sustainability pressure will be perceived differently based on the industrial sector, wherein your company operates and the sustainability sensitivity of its products/services.

Companies big in size portray sustainability proactiveness in response to wide corporate publicity. Therefore, there is massive potential for SMEs to get into sustainability but the caveat is that they need hand-holding towards the journey of sustainability.

The significance of a sustainability department or having sustainability champions in organisations cannot be downplayed. It will be seen as a commitment toward sustainability in response to sustainability demands from the stakeholders.

In conclusion, the different stakeholders will have varying influences on different sustainability practices. Businesses must recognise the need to be in tune with the perceptions and attitudes of those who will shape and influence their success (or failure!).

Understanding those who influence the future success of the business is critical. The impact will be determined by the proximity of the stakeholder to companies’ information, decision making and their skills and knowledge on sustainability matters.

The key success factor will be identifying the stakeholders and designing a programme for sustainability that speaks to the needs of the stakeholders to ensure value is shared appropriately.

Dr. Edward Mungai
Dr. Edward Mungai
The writer, Dr. Edward Mungai, is a global sustainability expert. He is the Lead Consultant and Partner at Impact Africa Consulting Ltd (IACL), a leading sustainability and strategy advisory in Africa. He is also the Chief Editor at Africa Sustainability Matters. He can be contacted via

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