ESG reporting: Closing gap by removing exceptions

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Mike E. Juru

ZIMBABWE took an important first step when the authorities made ESG reporting mandatory albeit, for listed entities only. While it signalled to investors that we understand risk in the 21st century, for the nation, it was only half the job.

Today, 90 percent of economic ac­tivity in Zimbabwe happens outside the Zimbabwe Stock Exchange (ZSE) or Victoria Falls Exchange (VFX). The reality is; construction firms are busy adding stock, new cities are being cre­ated, the manufacturing sector power­ing NDS2, the SMEs operating most businesses and employing most Zimba­bweans, the agencies managing water, energy and housing are fully functional. The list is endless. Regrettably, none of them are required to report on their en­vironmental, social and governance per­formance.

That is a policy blind spot we can no longer afford. If NDS2, Vision 2030, UN SDGs, the Paris Agreement and Agenda 2063 are to be more than documents, we must make ESG reporting mandatory for all organisations above a materiality threshold. Not just those with a stock ticker.

You cannot manage what you do not measure

NDS2 targets a five percent annual GDP growth rate driven by infrastruc­ture, industry and agriculture. Vision 2030 promises an upper-middle income economy. Our NDC commits to a 40 percent per capita emissions cut by 2030.

How will we track progress?

Right now, government is flying with one instrument. We get ESG data from approximately 65 listed companies. We get nothing from the thousands of com­panies that consume 90 percent of elec­tricity, generate most industrial waste, and employ most people.

Mandatory ESG reporting for all firms creates a national data backbone. Energy intensity by sector. Water use. Waste. Board diversity. Supply chain practices. Without it, government minis­tries cannot plan, Treasury cannot budget for climate risk, and DFIs cannot fund us at scale.

The economy is integrated. The risk is integrated. The reporting must be too.

A bank cannot be “green” if its lend­ing is limited to listed borrowers. A listed property fund cannot be “sustainable” if its tenants and contractors do not report emissions.

Climate risk, social unrest, and gov­ernance failures do not respect listing status. When a non-listed textile firm pollutes a river, it becomes a municipal cost. When a non-listed contractor de­faults due to poor governance, it delays deployment of a public hospital.

Agenda 2063 calls for “inclusive growth and sustainable development”. That requires the whole economy to be visible. Limiting ESG reporting to listed entities creates a two-tier market: trans­parent at the top, opaque at the base. Capital will flow to the data, and bypass the rest.

It unlocks capital for NDS2 and Vision 2030

The money to deliver Vision 2030 will not come from the fiscus alone. It will come from global players, DFIs, green bonds, and blended finance.

All of those investors now require portfolio-wide ESG data. The IFC, AfDB and GCF are refusing to fund projects without audited emissions and social data. By 2026, the EU’s Carbon Border Adjustment Mechanism will tax exports without carbon data.

If Zimbabwean SMEs and unlisted manufacturers cannot provide that data, they will be locked out of export markets and cheaper finance. We will effectively tax ourselves out of NDS2 projects.

Mandatory reporting, with phased implementation, gives firms 12-24 months to build capacity. It also allows RBZ and banks to create green lending lines with confidence. The result: cheap­er capital for the projects in NDS2.

It drives the SDGs and Paris

Agreement from the ground up

The UN SDGs are not a govern­ment-only agenda. SDG 7 on energy, SDG 8 on decent work, SDG 12 on re­sponsible production, and SDG 13 on climate all require private sector action. This is just but to mention a select few.

The Paris Agreement requires nation­al reporting every two years. Right now Zimbabwe estimates industrial emis­sions. With mandatory reporting, we would have actual authenticated metered data. That strengthens our Nationally Determined Contributions and unlocks results-based climate finance.

Similarly, Agenda 2063’s Aspiration 1 is “A prosperous Africa based on in­clusive growth”. You cannot prove inclu­sion without reporting on jobs, wages, gender, and community impact across the economy, not just in listed firms.

What the policy should look like

This is not about burdening SMEs with paperwork on day one. It is about smart, phased regulation which in reality is a constitutional compliance issue.

Proposed framework

Scope: All companies and organisa­tions with >50 employees or >USD 1m turnover. Include parastatals, NGOs, and large trusts. Listed entities remain under ZSE rules.

Standard: Adopt IFRS S1 and S2 as the baseline, with a simplified “Zimba­bwe SME ESG Template” and at the same time develop “Sectoral ESG Tem­plates” for firms between 50-200 em­ployees. Focus on Energy, Water, Waste, Emissions, Jobs, Health & Safety, and Governance.

Phasing: Government and parastatals effective January 1, 2027.

Verification: Light-touch assurance for first three years. Use industry bod­ies, Green Building Council, Zimbabwe Institute of Engineers etc, to train local ESG officers. New relevant jobs will be created.

Incentives: Link compliance to pub­lic procurement and lending, RBZ green finance, and tax credits. Non-compliance = no government tender, no borrowing.

The cost of compliance will be out­weighed in 18 months by lower energy and water bills, reduced waste, better ac­cess to finance, and reduced regulatory risk.

The cost of inaction

If the status quo is maintained, three things will happen.

Firstly, we will miss NDS2 and Vi­sion 2030 targets because we cannot see where emissions, water stress, and skills gaps are.

Secondly, Zimbabwean companies will lose export and investment oppor­tunities as global value chains demand ESG data.

Lastly, we will build assets today that become stranded liabilities tomorrow, because no one measured their climate risk.

Conclusion

The ZSE move was spot on, and nat­urally, leadership requires finishing the job.

Expanding mandatory ESG reporting is not red tape. It is economic infrastruc­ture. It is how we implement NDS2, turning Vision 2030 and Agenda 2063 from ambition into auditable delivery. It is how we give Treasury, investors, and citizens the data to hold the economy ac­countable.

Zimbabwe has an opportunity to be a first mover in the region. To show that an emerging economy can regulate for the future, not just the present. The world is no longer asking if ESG matters. It is asking who can prove it. For Zimbabwe to build the nation we have promised, the answer must be: all of us

l Juru is an accomplished business leader who is the current chairman of the Green Building Council Zim­babwe, Valuers Council of Zimbabwe and CEO of Integrated Properties. Previous national leadership roles include chairman of Institute of Di­rectors Zimbabwe, president of Real Estate Institute of Zimbabwe, inau­gural chairman of REITs Association, vice president ZNCC. He has sat on several boards in the private and pub­lic sector. He passionately leads the transformation of Zimbabwe’s built environment to sustainability.