Generation Z, born between 1997 and 2012, are strongly driving environmental, social and governance (ESG) principles, with many people from this cohort refusing to support or work for companies that do not align with their values.

Despite their strong demand for sustainable and authentic products, Gen Z was unwilling or unable to pay for these products, Frans van Wyk, director of Agrifusion, said at the Agbiz and South Africa Wine Media Day recently hosted in Paarl in the Western Cape.

Van Wyk made it clear that it would not help to push back against this trend. Instead, businesses should adapt by addressing Gen Z through their communication channels, such as social media, and by getting them on management, decision- making and shadow boards to allow businesses to better respond to future trends.

He added that the demand for ESG business principles emerged around 1987. Since then, pressure has mounted, culminating in the United Nations creating the 17 Sustainable Development Goals and global regulatory framework, such as the European Green Deal, aimed at cutting pollution and restoring a healthy balance in nature and ecosystems.

Ready for change

Pressure is not as high in South Africa, but producers should ready themselves for the change. “It is time to wake up and realise that ESG is no longer a pie in the sky idea. Failure to comply may, in future, lead to a loss in market access and result in increased costs, such as carbon taxes,” Van Wyk warned.

In South Africa, he said, there were progressive wine businesses that were already looking and developing net zero strategies for 2030 to protect their brands in international markets.

But there were also smaller businesses that were doing nothing – because they were hoping for the trend to blow over or they were stuck in survival mode. Along with this, some producers were hiding behind and waiting for cellars to guide them, as these have historically been the mouthpiece of these producers.

Sharing information

To ease tension between these two poles, Van Wyk said the industry should share information to reduce the “noise around this topic” and put members at ease.

“There are a lot of conflicting and confusing messages out there, with the abundance of acronyms used adding to confusion. Try to get everyone on the same page and focus on a small number of themes or goals at a time,” Van Wyk said.

He said that Agbiz, earlier this year, set aside time and budget to better understand the definition of sustainability. “Sustainability means different things to different people, so we need to understand these definitions and their building blocks and use this information to lobby for legislation that is realistic, scientific and economically viable.”

Reporting purposes

A lot of work is also done to educate members for their own reporting purposes and to facilitate the reporting back to markets. “We sit in the global south, so things are very different from the north were these policies and legislations are made,” Van Wyk explained.

He said that many members of industry bodies were suffering from “audit fatigue”, but the industry bodies could help to alleviate this.

“Industry bodies are starting to play a pivotal role in accessing and managing data on behalf of member. With about 80% of what is needed for reporting already there, it just needs to be found. The rest will probably be at hand within the next two cycles,” Van Wyk said.

To support eco-friendly projects and initiatives, Van Wyk said that might be able to unlock green funds. They could also look at the Johannesburg Stock Exchange’s guidance on sustainability reporting and disclosure to help with the development of their ESG strategies.