ESG dialogue gains momentum

Despite environmental, social, and governance (ESG) uptake being at infancy level in Africa, more initiatives are being rolled out on the trend, as appetite heightens.

With organisations now looking to incorporate ESG considerations in their strategies and objectives, dialogue on the issue is gaining momentum. This year a number of forums have been lined-up to encourage nations, companies and financiers to consider ESG. One of the platforms is the Africa series of Africa ESG, Impact Investing and Sustainable Finance Summit 2023 to be held in Nairobi, Kenya for East and Central Africa region, Lagos, Nigeria for West and North Africa region and Cape Town, South Africa for Southern Africa bloc. “The Africa ESG, Impact Investing and Sustainable Finance Forums were inspired by the need to incorporate environmental, social and governance considerations in investment decision making in response to negative impacts posed by climate change and to foster and accelerate the achievement of sustainable development goals,” said Steve Munyao, Convener & Chair of the Organising Committees. Scheduled for different months within the first half of the year, the forums are targeting great opportunities for impact investing, in abundance in some sectors of Africa. “There are efforts to transition to clean and renewable energy away from fossil fuels but there are still challenges as most countries are heavily dependent on fossil fuels- South Africa is good example. This presents a great challenge and costs associated with transition,” said Munyao. He further said the continent is endowed with huge resources in solar, wind and hydro to power. “For instance, Kenya currently has almost 90 percent of its energy mix from renewable energy. Financing has been a challenge for ESG /sustainability focussed projects chiefly due to lack of well thought out bankable projects, policy and regulatory frameworks have also been a challenge in structuring these projects across the continent,” Munyao said. With the increasing demand to adhere to ESG in financial instruments, the Committee of SADC Stock Exchanges (CoSSE) in partnership with the Financial Sector Deepening Africa (FSD Africa) has also announced plans to host a green bond workshop. Slated for the end of February, in the resort town of Kasane, the three-day sustainable or green bonds regional workshop will put a spotlight on SADC’s Green Bond issuance. “It is a practical based workshop hence participants will be trained on how to issue Green Bonds, how to structure them and how to deal with proceeds. “So we bring together issuers, lawyers, accountants and verifiers in the whole green value chain and this shall be beneficial as all deal makers will be in one room,” said Chairperson of CoSSE, Thapelo Tsheole. He further said there has been an increasing and overwhelming response in the market for green bonds due to the rise in ESG across the globe. Tsheole further said ESG integration in business and investment processes is becoming critical and conversations around green finance are a hot topic on the backdrop of growing climate change impacts. Another forum will be the inaugural Botswana ESG and Sustainable Finance Forum 2023, designed as a platform for institutional and ESG ecosystem where participants will engage on best practices on ESG and formulate implementable strategies with the goal of aligning planet, people and profits. Organisers of the event planned for April MNCapital said the event will be held under the banner: ‘Green-Growth Paradigm for Botswana ― Investment Strategies for Sustainable Value Creation,’ as the issues of climate change has become part of the agenda within the context of investors, governments and business in Africa “It’s now evident that the industry is ready to implement this long-term, forward-looking investment strategy,” said Group Chief Executive Officer of the MNCapital Group, Michael Ndinisa. He further noted that now the conversations are rapidly changing, and the world is experiencing an inevitable ESG paradigm shift as external pressure for businesses to operate sustainably mounts. “We believe that ESG is no longer just a consideration, but a business imperative, and it should play an integral part in both the corporate strategy as well as the institutional investment decision making and it being a business imperative, it should be viewed as a new way of doing business, meaning that businesses should continue making profits, and investors should continue getting healthy returns on their investments, only that this time around, there is a deliberate focus on the non-financial issues.”

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