Abstract
Environmental, Social and Governance (ESG) metrics and the resulting reports serve as a mechanism through which companies can align with the sustainable development commitments of the societies and economies in which they operate. This research study investigates the extent to which food and beverage manufacturers in South Africa, an industrial subsector with both significant economic value and high resource use, are monitoring production data that informs their environmental performance. In addition, the study examines the impact that monitoring these metrics can have on operational efficiency when sustainability reporting data is used to inform operational decisions, with a particular focus on the impact of resource efficient and cleaner production (RECP) interventions. By applying a mixed methods approach, research data was collected by means of (1) a quantitative research survey enquiring about the resources being monitored by companies, (2) qualitative interviews evaluating the drivers behind monitoring and the impact of resulting improvements, and (3) supplementary data quantifying potential savings from RECP assessments undertaken by the National Cleaner Production Centre South Africa.
Large companies contributed 78% of the survey responses, where findings revealed an advanced level of monitoring of energy, water, and materials, with an average mean score of 4.2 out of 5 in response to positive statements in the resource monitoring questions. This compared to a mean of 3.2 for small and medium enterprises (SMEs). Greenhouse gas (GHG) emissions monitoring is somewhat lagging, especially in SMEs. Drivers for resource monitoring include cost containment, regulatory requirements such as tax legislation or ESG reporting, and customer pressure, particularly from large retailers. The research concluded that the monitoring of resource data, when applied to operational decisions, can result in direct operational benefits through RECP. Results show an average energy savings potential of ~22% and water savings potential of ~44%, and a reduced carbon footprint can result in carbon tax savings. Indirect benefits include more credible ESG reporting and increased stakeholder confidence. The study confirmed that the field of operations management, through its practitioners and scholars, has a significant contribution to make to the advancement of sustainable development in the South African industry by promoting Sustainable Operations Management practices, skills, and knowledge.