While I probed managers to express what factors influenced their sustainability decision-making the most, they unfailing pointed to external pressures that made them consider the larger social and environmental dimensions of their firm’s operations. These drivers were regularly held within a risk mitigation framing and managers spoke seriously of the ramifications that would ensue if they were ignored. Managers also expressed that external pressures were becoming increasingly intense as the policy was tightening and more clients wanted to know their operations procedures or see environmental management certifications.
While external pressures did strongly influence manager’s strategic business decisions, these triggers held within them a sense of fragility as they were not intrinsically motivated, but rather extrinsic demands that did not stem from a value- add perspective. With this in mind, managers did regularly note that if it were not for some of these pressures stemming externally, they would not be taking such environmental and social sustainability measures. Therefore, if policy or client pressures shifted, these efforts could easily crumble. As with the previous sections, there were three factors (‘1st
Order’ Concepts), which emerged as being most the most significant external pressures that motivated managers to consider or integrate environmental or social sustainability measures into the firm. These terms are listed below in the order of data significance and ‘groundedness’. These concepts will be reported together in an integrated manner:
Regulatory compliance forced on managers: Managers feeling pressured by policy and legislation frameworks to comply with environmental and social regulations or running the risk of getting fined or shut down (risk framing).
Clients force us to change, and customers care about brand: Clients increasingly wanting to know that firms are reliable brands with good procedures before doing business with them.
Sustainability business case to manage risks: Broader economic, social and environmental challenges pressuring managers to protect their business through considering sustainability risks.
Most managers that reported their sustainability decision-making process was largely due to their moral compass immediately mentioned that their “main driver to incorporate sustainability is abiding by regulatory compliance” as this posed the biggest risk to the firm. This was particularly abundant when managers expressed to me which sustainability measures actually ending up getting implemented. One of the owners from a larger SME that had a few managers mentioned “you don’t really get any board level consideration of sustainability issues unless it is forced onto you like BEE is for example.” All the managers pointed to the fact that trying to cut corners to save money was not a wise business strategy in that “the money you are trying to make out of not following the rules is not worth the while because the fines will be three times more than your saving … the fines are big in South Africa.” Another manager, when asked if it would save him costs to dump his effluents in the river, told me:
If you are just dumping your waste into the river, yes you won't have any extra costs to pay for it to be properly disposed of, but then you have to imagine that at some point in time you are going to get caught and it is going to cost you a whole lot more … probably your entire company.
If you get caught dumping chemicals into the drain you will get shut down. And then the authorities will find out how long you have been working for and what leachates you have been using and find out the average you have been using and then fine you according to that … and then you are certainly done!
Even one manager that staunchly stated that his motives for considering the environment were from a moral perspective, reluctantly told me about his fear:
Yes, well for me it is always about it being the right thing to do … but I but I also have a fear, actually I have the knowledge that you are not allowed to break the rules. So if somebody came we would be in big trouble.
While this fear of getting fined was common, one manager had less of an optimistic view when saying, “many companies don’t follow the rules as the government lack capacity to enforce anything other than SARS (South African Revenue Service).” The managers in the sample, however, did not admit to such bending of the rules as they continually expressed the potential challenges that would ensue.
While the fear that many managers had of being fined was a strong motivator for environmental and social sustainability decisions, the competitive risk that managers said they would face if they did not keep up to date with emerging compliance frameworks, such as ISO (International Organization for Standardization) was equally as strong. One manager stated, “it is becoming more and more important and even a requirement from our clients and everyone around the world to get things like ISO 1400.” This increasing pressure of clients forcing firms to adopt such measures was noted by managers as being a sound investment in the future of their firms’ success. However managers often felt they were having trouble keeping up with all the new regulations and compliance certifications. One manager felt daunted by such standards as ISO, which he said, “it covers everything and eventually all of our clients will move towards wanting all the firms they do business with to have ISO 1400.”
Another manager framed these incoming pressures as risks that needed to be considered because many “clients want to know about environmental friendliness through the procedures that you run, so we are now forced you to adopt these measures.” The same manager went on to note, “doing it this way helps you get more business.” Managers also stated that “if clients or other firms find out find out you are doing something in a wrong way they will rather not deal with you and deal with someone that’s got their own interests.” None of the managers were excited about these new standards being placed on them. Rather, they saw these as just another piece of maintaining best practice.
Client pressures were equally matched by customers now paying closer attention to the practices of firms in how they considered environmental and social aspects of their business. One manager who worked for a company in the plastics business noted that, with increasing customer awareness about the potential negative environmental effects of the plastic industry, “we started to focus more on environmental issues when climate change and everything came out in the media, so we had to develop with the customer trends.” He went on to note “as a plastic manufacturer it [had] become an essential part of the business as there are customers out there that will not do business with you otherwise.” This was supported by another manager’s brand awareness when he said, “so we do not want to get in trouble with our brand through making bad decisions. We have to be cognisant and take risks accordingly.” One manager, who had a more cynical view on the matter, said “I do not believe it is any kind of genuine or sincere effort to make business less harmful, but really a fear that customers will judge the business if not,” which aligns with another manager's strategic point of, “how do you tell people that you actually care about the environment? You gotta show them!” There was, however, a shared sentiment that many of these sustainability responses firms were taking to appease clients and customers were shallow in that “anyone that is doing something for the environment has a hidden bloody agenda and are really just trying to promote their brand by doing things like printing save the rhino stickers.”
While external pressures of legislation, client and customer demands were the primary drivers for sustainability decision-making by firm managers, several managers also pointed to how integrating sustainability policies could help them
better cope with some of the broader economic, social and environmental trends that could affect their business success. One, when asked about how he strategically plans, told me “You need to lead by understanding. You need to not only be good in that little business but also understand what trends will affect your environmental risks.” This same manager, who ran one of the more successful firms told me about South Africa’s economy moving into the ocean economy, which would mean there would be more work but also more consciousness of oceanic issues. He said “our firm wants to be a part of the change and we need to embrace that, and be aware of such policies as the National Development Plan”.
Another framing of the business case for addressing sustainability agendas pertained to cost reduction. This typically came in the form of managers talking about the potential to “reduce waste through reusing products” or, as another manager who worked with steel expressed, “with steel you can recycle it and get money back.” One manager spoke of how raw materials were expensive and therefore the firm had to adapt accordingly. However he did note that this response was not an integrated sustainability approach but rather a reactionary response to save money:
The primary driver for our firm is always financial pressures so that leads to us trying to reduce our waste and hopefully reduce our consumption. However it's hardly an expression of sustainability management but rather it's just that our raw material is really expensive so we have to not to waste it at all and recycle as much as we can.
Another manager told me how they had used sustainability measures to save them financially when he said “you can use the environment to your advantage and save a lot of money. We save R20 000 a month by doing our own effluent control here on- site.” Some managers had a more integrated perspective and understood how sustainability awareness and policies could protect their business interests. One business that operated in the Winelands said:
The business needs to involved in the community it operates. We operate in the wine industry and the welfare of the community to where we supply tanks is important. We need to be aware of political unrest and if children are not getting fed. One example is our clients are dealing with labour disputes on the farms, so they’re not about to buy more tanks at the moment.
Another manager who was well aware of the environmental risks of increasing droughts in the region had recently invested in water tanks “to collect water so we are now going to have water resources for the next six months. We’re going to double that number of tanks soon and then be self-sufficient for a year.”
One firm that had been aware of the rising electricity costs had developed a new technology and said the product was not selling at first as clients did not want to pay the extra, “but now that Eskom has ramped up the electricity prices, these things are coming onto the radar and the more progressive clients are beginning to see it.”
The external pressures outlined above were some of the strongest drivers influencing factors for managers to integrate environmental and social sustainability. Nevertheless, due to the SME context, managers felt pressured and strained by these external pressures and, as will be demonstrated further on in this chapter, managers dealt with these sustainability triggers in a reactive manner that did not embed sustainability into decision making but was rather seen as a way to avoid risk. The next section will examine manager’s contextual experience in the SMEs, the resulting sustainability tensions that surfaced in the environment and how managers’ experience of these elements shaped their sustainability sensemaking process.