INSTITUTE for Sustainability Africa (Insaf) chief executive officer Rodney Ndamba says African companies must approach environmental, social, and governance (ESG) strategies with genuine intent.
Ndamba told businessdigest on the sidelines of the inaugural ESG & Sustainability conference in Nyanga last week that green-washing — the act of making misleading statements about the environmental benefits of a product or practice — could lead to public scepticism.
He said companies should not selectively adopt practices from developed countries while ignoring local challenges.
“African countries need to be very realistic because some of the indicators that we are picking are mostly aligned to the developed world that have already gone past(our) stage,” he said.
Ndamba suggested that companies should prioritise issues relevant to their local context.
“For example, the issues of how do we deal with poverty alleviation, how do we deal with climate change, waste management, environmental degradation. Those are priority issues that African countries (should focus on).”
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He highlighted the importance of inclusive training on ESG practices, encompassing both formal and informal sectors.
“One of the critical issues is that there is a need to raise more awareness and education amongst the business entities, both large and small, because they feed into one another,” he noted.
“It is becoming a paramount issue for economic growth and also even accessing international markets because this is becoming so much of a requirement that is also beginning to feed into trade agreements.”
The Insaf chief also urged the government to promote awareness among state-owned enterprises and enforce existing regulations to help achieve sustainability goals.
Institute of Chartered Accountants of Zimbabwe chief executive officer William Mandisodza noted the necessity of providing guidance on assurance reporting and collaborating with the government on regulatory matters.
“People were talking about things they think our institute should do, looking at how we can localise some aspects of the standards so that they do not remain foreign,” he said.
Mandisodza emphasised the importance of awareness and training.
“But what is key for us is to make sure that people are aware and people are trained so that when they go out in their various institutions, the conversation becomes easier.”
The Institute of Directors in Zimbabwe (IoDZ) highlighted the significance of assurance auditing for companies seeking to access international markets and financing.
“Corporate adaptation and governance structures must align with ESG agreements, which are here to stay. To access these markets, compliance is essential; otherwise, companies risk exclusion from financial markets and may struggle to sell their products,” an official with IoDZ remarked.
IoDZ encouraged businesses to adopt and embrace ESG sustainability strategies, citing their impact on operations.
“They want to understand what the history of this product is, and what level of emission it causes. What have you done as an entity to reduce emission and also aspects such as involving child labour in the process?”
Precious Mhovha, an auditing expert, underscored the importance of embedding assurance reporting within company frameworks, noting that investors were increasingly prioritising this information when making decisions.
In recent years, there has been a growing focus on ESG principles as a framework for sustainable business practices. ESG criteria are used by investors to evaluate the ethical impact and sustainability performance of companies in which they invest.
These standards can also help business es make sound decisions, and investors achieve better long-term returns.
In Zimbabwe, many large listed enterprises, like Innscor, Caledonia Mining Corporation, Delta, Padenga, and OK Zimbabwe have already been issuing ESG reports.
Econet Wireless, for instance, has been recognised for its strong commitment to ESG practices. The company has implemented several initiatives to reduce its carbon footprint, promote digital inclusion, and support community development projects.
According to Gloria Ndoro-Mkombachoto, an organisational development consultant, adopting strong ESG practices can help Zimbabwe and other African nations attract foreign investment.
She said companies that neglect ESG factors face various risks, including reputational damage, regulatory fines, and operational disruptions
By adhering to ESG principles, businesses in Zimbabwe can mitigate these risks and improve long-term performance, experts said.