The disinformation campaign that has shadowed ESG for the past couple of years appears to be waning which is perhaps the greatest reminder of how the fickle nature of politics can undermine our pathway to sustainability. One only need look at the polarised actions of the second biggest emitter in first entering the Paris Agreement in 2016, withdrawing four years later and then rejoining in 2021, setting the world back eight years, in fighting climate change. We’ve been talking about sustainable development for over fifty years and while the language and tools adopted may have evolved, the collective resolve that ‘business as usual’ cannot continue is unwavering.
Since the most pressing social and environmental issues are global in nature, we need collective action. The universal adoption of ESG principles by public and private sector as well as civil society present the best possible route to sustainable and inclusive growth.
ESG can be described as a framework to assess the impact an organisation has on society and the environment while measuring its financial resilience to risk. With a rapidly escalating climate crisis and increasing social inequality, ESG is an effective mechanism evaluating relationships with stakeholders like customers, suppliers, employees, and host communities and make public disclosures about its performance according to relevant metrics and indicators. While ESG reporting is still voluntary depending on your jurisdiction, it is being subjected to increasing regulation that will see non-financial metrics being audited in the same way as financials are from 2025, strengthening transparency and accountability.
Public disclosures means that companies cannot make claims they cannot substantiate. Regionally, companies are reporting against the JSE Sustainability Disclosure that has been progressive in aligning its standards with GRI and the EU taxonomy. While net zero commitments and alignment with a less than 2 degree Celsius world are being prioritised, companies looking to articulate their values and principles can also align their targets with global development frameworks such as the Sustainable Development Goals and the UN Global Compact.
This collective contribution to the wellbeing of society and the environment is not an unfamiliar concept in Africa where the philosophy of Ubuntu is premised on shared prosperity - stemming from collective effort. “I am because we are”, and “It takes a village to raise a child”, are all African perspectives on inclusive development.
From a strategic perspective, ESG integration has the power to increase agility and adaptation to risk while improving financial performance, as evidenced by the UNGC and research from a number of ratings agencies including S & P Global. Turning risk into opportunity can often spur innovative solutions. Just think of how South Africa’s reliance on an ageing and unreliable coal fleet accelerated the uptake of renewable energy. This contributed to a more diversified energy grid and a decline in the country’s emissions two years earlier than the 2025 forecast, made in the country’s Nationally Determined Contribution.
Africa needs ESG
Despite Africa’s formidable natural capital, the continent’s mineral wealth and natural resources have still not delivered equitable social benefits. It can be argued that a history of systematic exploitation has entrenched a culture of corporate impunity, while weak institutions and less stringent regulation than our more developed counterparts have allowed this exploitation to continue unchecked.
The sustainability journey across Africa is not homogenous and there is a need for the region to collaborate on how best to deliver shared value for Africans that will deliver both social and environmental justice for the region. Companies are however operating in an increasingly globalised economy where African operations and assets are increasingly exposed to global supply chains. The regulatory push from markets such as Europe will mean that African companies needing access to finance and wanting to participate in global markets will need to pay increasing attention to ESG regulation and align themselves with global standards and governance guidelines
With the third edition of the ESG Africa Conference due to host more than 400 leaders and practitioners at the Sandton Convention Centre, from 1 to 2 October 2024, the response by business and sustainability stakeholders across Africa to participate, debate, share and learn from each other, shows a very clear intent by the industry to not only integrate ESG principles into their business practices but learn from each other in a maturing community of practice.
Wendy Poulton, co-founder and organiser of the ESG Africa Conference, says the participation at this year’s event is estimated to significantly exceed previous years: “Our conference has really advanced our collective understanding of ESG from initially defining it, to looking at how business responded to market shocks, to this year exploring how we move beyond compliance to achieve positive impact.”
The conference will take place over two days, deliberating over six broad topics like 'Governance as a driver for ESG', and 'Integrating ESG into Strategy' considering circular economy perspectives and the notion of whether ESG is being driven by regulation or business ethics and ESG Communications focusing on using ESG as the best communication tool organisation have to use for stakeholder engagement. There will be a series of participatory workshops, sharing of case studies and perspectives from youth and small enterprise.
For more information, visit the website at www.esgafricaconference.com to book your place.
