Businesses need a long-term vision for environmental and social impact

Dr. Adrian Enthoven, Chairman of private investment group Yellowwoods, which owns the Hollard Group globally, argues that businesses must adopt a multi-decade strategy to be environmentally and socially responsible.

He suggests that such an approach allows businesses to navigate global challenges’ complex and evolving landscape, ensuring resilience and long-term success. “When we consider insurance for smallholder farmers, for example, it is not just about increasing their yields or protecting their crops. It’s about ensuring their farming can sustain and thrive through crop transitions,” Dr Enthoven explained to the B&FT.

“Long-term thinking is essential. A short-term mindset focused on quarterly or biannual results won’t solve our significant problems. That is where our business model fits—aiming for a positive global impact,” he added, emphasising Yellowwood’s “twenty to thirty years horizon” for business decisions.

This perspective aligns with recent research highlighting the economic impacts of climate change. A study by the Potsdam Institute for Climate Impact Research (PIK), published earlier this year, estimates global annual damages could reach US$38 trillion by 2050, with a potential range of US$19-59 trillion. Additionally, global food insecurity has surged, affecting 345 million people in 82 countries by 2022, up from 135 million in 53 countries in 2019.

In response to such developments, Yellowwoods, its chairman explained, is accelerating its shift toward more ethical business practices. The company emphasises values-based leadership over top-down compliance. “We back our executives to embrace and own our values,” the Chairman stated. This approach fosters self-regulation and accountability throughout the organisation.

Integrating Environmental, Social, and Governance (ESG) criteria into performance metrics further underscores Yellowwoods’ commitment. “We have introduced ESG criteria into remuneration, impacting short-term and long-term incentives. This ESG approach significantly influences how our executives and leaders think,” Dr Enthoven added, ensuring we balance our financial success with social and environmental responsibilities.

Furthermore, Yellowwoods also focuses on developing leadership skills that balance financial performance with ethical considerations. “Business leaders need to build new muscles,” Dr Enthoven noted, referring to the complex decisions required to effectively manage economic and social priorities.

The company has implemented a framework to guide its practices, ensuring operations that stakeholders can be proud of, from paying living wages to treating suppliers as partners. “We run a robust tracking system with every team to identify any areas we’re not proud of,” the Yellowwoods Chairman explained, adding that continuous monitoring and a commitment to ethical standards are key to maintaining integrity across the organisation.

He said Yellowwoods, a significant player in the insurance sector with holdings like Hollard, is strengthening its position in renewable energy insurance. The company is proactive on climate issues and supports sustainable energy projects across Africa.

Beyond Profits

The investor pointed to some of its holdings—Spier Winery and its hospitality arm andBeyond—as setting benchmarks in values-driven business practices by prioritising ethics over mere profitability.

At Spier, the focus is on creating a workplace that mirrors the company’s core values. This commitment is evident in their employee welfare policies, which emphasise paying a living wage rather than just the minimum wage.

Spier’s pioneering role as the first fair trade tourism accredited winery underscores its dedication to fair treatment and proper compensation for workers. The winery champions environmental sustainability through initiatives like zero-waste practices and renewable energy use.

Similarly, andBeyond operates with a mission far beyond financial gain. The lodge business is a crucial platform for advancing conservation efforts across Africa. By partnering with African Parks, beyond is expanding conservation initiatives to protect pristine wilderness areas on the continent. This partnership aims to make a lasting impact on the environment and the local communities.

“This distinctive approach sets us apart from competitors focused solely on financial metrics. Yellowwoods is committed to making a positive, long-term impact in the countries where they operate, striving to improve lives and ensure sustainable practices,” he said.

Innovation at Heart

Innovation is central to Yellowwoods’ business model. The company integrates advancements from the Fourth Industrial Revolution, including artificial intelligence, to avoid industry disruptions. “We aim to be creative in fostering innovation and challenging conventional thinking,” Dr Enthoven said, explaining that by investing in businesses that bring new capabilities and ideas, Yellowwoods ensures it remains at the forefront of technological and market developments.

Yellowwoods, he also disclosed, operates with a decentralised management approach, empowering local teams to make decisions and take responsibility. “We devolve power, decision-making, and authority within the organisation,” Dr. Enthoven noted.

This strategy, he explained, enables solid local teams to manage operations effectively without excessive central control.

Preparing for the Future

Yellowwoods is preparing for future challenges, particularly technological disruptions and changing job markets. Dr. Enthoven highlighted the importance of continuously developing leadership principles that can adapt to these changes while maintaining a commitment to innovation and ethical business practices.