Africa continues to call…

In the realm of corporate responsibility, Environmental, Social, and Governance (ESG) auditing is now recognised as a vital tool for assessing and improving business practices. Over the last year, an extensive ESG training and auditing project has been conducted by SLF, under the SIPS project, in the leather sector across Africa, marking a significant milestone in the region's journey towards reinvigoration of the industry and sustainable development.

The project, spanning multiple countries, aimed to evaluate the current performance of tanneries in terms of their environmental impact, social initiatives, and governance structures, followed by recommendations for improvement and finally formal audits.
One of the primary objectives of the programme was to create a practical approach to improvement with transparency and accountability. By scrutinizing existing ESG practices, the project sought to identify areas of strength and areas needing improvement, fostering a culture of responsible business conduct.

Tanneries that participated in the programme are based in Tanzania, Namibia, Zimbabwe, Zambia, Madagascar and Malawi. A total of 10 facilities have successfully undergone formal audits, with an additional 6 that attended the training workshops (alongside other value chain stakeholders).

Final audits are taking place in Zimbabwe, Zambia, Madagascar and Malawi, before the project ends on 31st May 2024. All the facilities that have had audits benefit from a continued membership of SLF for two years, during which time they can continue to improve their performance which is visible on their personal SLF Transparency Dashboards™.
Environmental Impact

Assessing the environmental impact of tanneries was a crucial aspect of the audits. This involved evaluating their efforts to reduce emissions, conserve natural resources, and adopt sustainable practices. Waste management, chemical use, land and water pollution were also key considerations that were examined.

Social Good Practice
Beyond environmental considerations, the audits also focused on social impact. Tanneries were evaluated based on their provisions for their own workforce, engagement with local communities, support for education and healthcare, and promotion of diversity and inclusion within their workforce. Initiatives such as community development projects, skills training programs, and fair labour practices were assessed to gauge their positive influence on society.

Governance Structures
Effective governance is the cornerstone of sustainable business practices. The audits evaluated corporate governance frameworks, ethical business practice, risk management practices, occupational health and safety, and PR & communication. Companies demonstrating strong governance structures, transparent decision-making processes, and a commitment to integrity are recognised for their responsible leadership.

Key Findings and Recommendations
After months of preparation, the tanneries that underwent the process have seen valuable and impressive results without any excessive cost. Feedback has revealed that the ESG audits yielded valuable insights into how tanneries in the SADC region measure up against international expectations. While many facilities showcased commendable efforts towards ESG integration, areas for improvement were also identified.

Key findings included:

1. Need for Enhanced Reporting: Several companies lacked comprehensive ESG reporting mechanisms, highlighting the importance of transparent disclosure to stakeholders.
2. Skills Training is in High Demand: All facilities expressed the desire to learn and understand more across all areas but particularly around technical process improvement and also social aspects including training and skills gaps.
3. Climate Change Adaptation: Facilities in climate-sensitive sectors are actively seeking new ways to bolster their resilience and mitigation strategies in response to environmental challenges, such as water reduction measures and solar energy options.
4. Lack of high quality input material: A recurring theme in all countries visited was the decline in industrialised farming which has resulted in a lack of available quality hides and skins for leather manufacture.
5. Successful auditing is possible: Most of the facilities audited came away with solid certification across many areas of ESG. With continued support these facilities will be able to demonstrate compliance with international expectations for modern leather manufacture.

Key recommendations:

1. Develop ESG Action Plans: Facilities were advised to develop robust ESG action plans with measurable targets and timelines to track progress effectively.
2. Strengthen Stakeholder Engagement: Enhanced communication and engagement with stakeholders, including investors, communities, and employees, were emphasised to build trust and accountability.
3. Invest in Training and Capacity Building: Initiatives to enhance employee skills, particularly in areas related to process, sustainability and ethical business practices, were recommended to drive positive change from within organisatio

Impact and Future Outlook

The conclusion of the project marked a significant milestone in promoting sustainable business practices in the SADC region of Africa. By raising awareness, identifying best practices, and recommending actionable steps, the project has been able to catalyse a broader shift towards responsible corporate conduct.

Moving forward, ongoing support will be essential to maintain the progress of companies in implementing ESG recommendations.

In conclusion, the project underscored the importance of integrating environmental, social, and governance considerations into business strategies. As Africa's economies evolve, embracing sustainability not only mitigates risks but also unlocks new opportunities for innovation, growth, and shared prosperity. SLF is proud to be part of this journey.