Speaker Summary: Professor Sherwat Elwan Ibrahim

28 Jun 2023

Summary 

Professor Sherwat Elwan Ibrahim, from the American University in Cairo, presented key insights into the evolving landscape of ESG within supply chain management and outsourcing. She discussed the decoupling of finance from innovation and the changing nature of business models, which should direct the way business is taught in higher education.

Key Takeaways

  • There has been a noteworthy global shift in business operations towards outsourcing. Some organisations, instead of carrying out business operations in house, are outsourcing them to medium and small enterprises. This shift has substantially altered decision-making processes within organisations and has compelled organisations to adapt their strategies and supply chain management techniques.
  • Similarly, innovation is increasingly detached from business-as-usual and traditional funding sources. In other words, large corporate business models are less relevant for SME innovators. Higher education should reflect this transformation and tailor their teaching curriculum  to the local or regional context in which they are based. For example, teaching about green bank loans might be best suited to Africa and its young entrepreneurs, in contrast  to teaching about more traditional climate finance models in the US. In Africa, there is a sizeable gap between ESG policymaking and business due to industry fragmentation and weaker lobbying practices, but global trade is pushing ESG. Government-business dynamics in Africa differ from those in the US or Europe, where regulatory bodies or stock exchanges exert pressure to follow ESG standards and require disclosure. African businesses wanting to take part in international trade must adhere to the requirements set by their trading partners, including ESG considerations. This external pressure can lead to a form of indirect government intervention, as governments in Africa work to align their policies with global ESG expectations.
  • Social aspects often take precedence in boardrooms as the impact of changes in strategy are easier to measure compared to climate action. For example, it is easier to track gender diversity than climate competency in the boardroom. However, it is important to allocate resources and efforts to address and track both social and environmental aspects effectively.

Conclusion

African businesses face unique ESG challenges due to disparities between policy frameworks and practical business realities, driven by industry fragmentation and limited lobbying. Nevertheless, there are valuable opportunities for business growth and development because of the decoupling of finance from business innovation. Adhering to global trade requirements also plays a part in moving the ESG agenda forward. Finally, higher education plays a crucial role in bridging the gap between global ESG discourse and local understanding.   

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