PARETO PROPERTY: Pareto Pushes Prosperous Transformation Programmes

Stark facts still detract from successes in the South African economy. There are fantastic examples of world-leading organisations that realise monumental accomplishments that are not just financial, but the country is the most unequal in the world – the divide between rich and poor is bigger than anywhere else on the planet. Since 1994 (almost three decades), inequality has actually increased. Is this a political messaging tool, being pushed by opposition? No – a report from the World Bank; researched facts. Black people still hold fewer senior management positions than white people, and black females are still largely under-represented.

Since the introduction of the Broad-Based Black Economic Empowerment (BBBEE) Act in 2003, there has been confusion, criticism, and scepticism around the concept and how it has been rolled out. Of course, there have been major success stories, and beneficiaries have prospered. But, the BBBEE Commission released figures showing that between 2015 and 2017, the number of black business owners decreased from 33.5% to 27.8%.

Part of BBBEE commitments surrounds ownership, management, skills development, enterprise development, and socio-economic development. Corporate Social Investment (CSI), or Corporate Social Responsibility (CSR) is big business. Most small, medium, and large companies contribute on one level or another, but outcomes are not always measured and are sometimes fruitless vanity projects.

In 2018, Duma Gqubule, Director of the Centre for Economic Development and Transformation, told the Mail & Guardian that BBBEE was an “abject disaster”.

But, money continues to flow and good things continue to happen. At the start of this month, Japanese automaker, Isuzu, said it would pump R580 million into BBBEE suppliers as part of an enterprise development and supply chain improvement scheme.

COUNTRY OF PROMISE

For those that are truly committed to outcomes from successful BBBEE programmes, there is a major opportunity in this country of promise.

At Pareto Property – a JSE-listed Real Estate Investment Trust with an impressive portfolio – BBBEE, CSI, and enterprise development is priority number one. Owned by the Government Employee’s Pension Fund (GEPF), the promotion of black involvement in the mainstream economy, and the development of vehicles to accelerate that involvement, are core in the company’s strategy. With an executive and non-executive team split equally between male and female, this is company achieving what others cannot. For a quarter century, this exciting and ambitious business has been driving true transformation.

Pareto Property owns prime sites across the country – assets that it calls: “the heart and soul of communities, beacons of local economy, and thoughtful spaces where individuals enjoy meaningful experiences that extend beyond traditional shopping and predictable hotel lay-overs. They provide first-class opportunities for the public to thrive and offer sensory ways to shop, play, earn and live, while generating diversified total returns for its shareholders.”

The company clarifies: “From prestigious hotels and diverse, premium shopping centres, to the most sought-after conference spaces in the country, our passion for prime iconic properties, world-class experiences and people can be felt equally in our social investments, community upliftment projects and through the positive impact we make in each of the lives we touch. Pareto is a proudly BEE compliant company.”

Currently, there are several projects underway around CSI, enterprise development, and BBBEE that are positioning this Level One contributor and its project recipients strongly for the future. In turn, the dedication to transformation shown by Pareto has placed it favourably with investors in South Africa.

ENTERPRISE DEVELOPMENT

Pareto’s Enterprise Development Programme is aimed at growing sustainable businesses within Pareto’s area of expertise – retail premises. The long-term impact will be local economic development and job creation. Investment, support, facilitation, and fostering of new businesses.

Recently, 62 sustainable jobs were created across 58 new pop-up retail spaces within Pareto-owned space. More than R1.3 million has been generated, and shoppers are able to see where their money ends up, often dealing with owner-managed businesses.

At Westgate Shopping Centre, there was a recent focus around the fashion industry, with the company looking to uncover local entrepreneurs and nurture their talent. The Westgate Fashion Designers Programme from Pareto helped participants with modern marketing, leadership competencies, operational strategy within a formal mall setting, and more. Since working on the scheme at Westgate, some of the exciting young entrepreneurs have had proposal requests from H&M and Mr Price.

13 Lifestyle Markets were opened across seven Pareto centres as the Covid-19 pandemic took hold. These often-outside markets provided shoppers with much-needed products and were a result of Pareto realising the impact on SMMEs in retail as restrictions squeezed. The Lifestyle Markets supported some 1392 entrepreneurs, exposing them to more than 60,000 shoppers.

At Menlyn Park Shopping Centre, arguably Pareto’s most iconic asset, the sunny rooftop has become home to a productive green garden where Andile Matukane has utilised an old parking lot as an urban farm. This is the first and soon-to-be the largest in Tshwane atop a shopping mall. Famers Choice grows leafy greens – including spinach, lettuce, basil and more – using a modern hydroponic system. The crops can be delivered quickly thanks to proximity to consumers – true healthy freshness. Matukane also runs two traditional farming operations, raising pigs, but found it difficult to expand with the challenges around land ownership. Partnering with Pareto has been beneficial for both and a great example of the company’s desire to assist entrepreneurs while maintaining its green credentials.

“Both Pareto and Menlyn Park are excited to support this eco-friendly space. The farm is low in maintenance, gives high and consistent production results per square meter, has a low input usage of water and electricity, and has low space requirements,” the company states.

Pareto’s position as a long-term partner to these enterprises demonstrates its commitment to ongoing development and shows it is not simply a kick-starter of small and growing businesses (SGB) but a catalyst for sustainability.

“In this ever-uncertain environment, it is difficult for any SGBs to commit to a long-term plan. By staying close to and prioritising SGBs, we can better respond to SME needs, and contribute to a greater survival rate for these vital businesses,” said Daniel Mosito, Head of Legal and Compliance at Pareto.

GREEN CREDENTIALS

Beyond just CSI and BBBEE development programmes, Pareto is also keenly following an environmental strategy. Maryville University produced a report recently which highlighted the impact and importance of businesses pursuing green approaches. “An environmentally aware business considers more than just profits — it considers its impact on society and the environment. Such a business is sustainable because it contributes to the health of the structure within which it operates, thereby helping construct an environment in which the business can thrive,” the report stated. It also cited cost-saving, improved reputation, competitive advantage, and increased bottom line.

Across the Pareto portfolio, green initiatives have been installed to improve sustainability on site. From new architectural ideas, to modern technology and improved building materials, each project is considered alongside leading consultants and completed in partnership with suitable partners. At Menlyn Park, contracts valued at R37 million were approved for infrastructure improvement, with 305 new jobs created in the supply chain.

Pareto’s head office in Sandton was awarded Green Star Rating in 2021 by the Green Building Council of South Africa (GBCSA). The company achieved a 5-Star Green Star SA Interiors v1 certification which demonstrates Leadership and commitment in the sustainability programme. According to the GBCSA, Pareto’s office at the Atrium is “a high-performance tenant space, is a healthy, productive place to work, less costly to operate and maintain, and has a reduced environmental footprint.”

Pareto’s inhouse architect, Charslayn Thonga commented: “The project targeted an innovation point for including biophilia within the design, which encourages and recognises the inclusion of initiatives to bridge the divide between the natural and built environments. To reflect Pareto’s ethos, and to promote user health and wellness, the spaces were designed for restoration and relief from mental fatigue and stress.”

THE ETHICAL CHOICE

Clearly, investments into BBBEE, enterprise development and CSI have had proven positive outcomes for Pareto Property. Improving skills and growing economic prosperity for previously disadvantaged sectors should not be questionable and should always be a part of modern strategy for any South African business. Despite challenges, companies have a responsibility to make a difference.

The word Pareto comes from the Italian language and the work by economic and sociologist Vilfredo Pareto who wrote about the income distribution within a society. With much work to do in this regard (95% of the wealth in SA sits with less than 10% of the population), South Africa could learn from Pareto’s commitment to its cause.

Through its many schemes, all of which are proving successful, this is a business where impact will be felt deep within the communities and markets in which it operates – genuinely living by its values.

“We pride ourselves in being socially responsible citizens and actively challenge ourselves daily to contribute positively towards society. Pareto’s Enterprise/Supplier and Socio-Economic Development programme focuses on investing in and uplifting communities through various interventions that help build efficiencies and capacity needed for both individual companies and communities,” says Group CEO Malose Kekana.

Where some fail to understand the need and significance of transformation within the economy, Pareto is taking a leading position and showing exactly what can be achieved with the right level of dedication. Far from a disaster, the prospects created at Pareto show clear and obvious opportunity.