Zimbabwean firms enhance ESG reporting at Top Companies Awards

LOCAL companies have been applauded for spotlighting environmental, social and governance (ESG) practices in their reporting amid its growing relevance to investors and various stakeholders.

ESG reporting is a set of standards measuring a business’s impact on society, the environment, and how transparent and accountable it is.
Speaking at the 2024 Top Companies Survey Awards last week organised by The Financial Gazette in partnership with financial services giant, Old Mutual Zimbabwe, judges’ chairperson Simbiso Musa highlighted the growing significance of ESG practices.

Old Mutual Zimbabwe, judges’ chairperson Simbiso Musa

“ESG and sustainability reporting has significantly improved, with the activities increasingly gaining traction. In line with this year’s theme we believe if we continue on that momentum we will soon start monetising the impact of these practices on financial returns,” said Musa.
The awards theme, Sustainable Investment for Social Impact, was meant to spotlight ESG endeavours among listed companies.
Other matrices considered were earnings performance including assessment of growth and quality of earnings, levels of market capitalisation, net asset value, total assets, liquidity, solvency, profitability, operating efficiency and investor returns including issues of share liquidity, share price growth and payment of dividends to shareholders.
This year’s edition saw the amalgamation of the Victoria Falls Stock Exchange (VFEX) and Zimbabwe Stock Exchange (ZSE) bourses in the survey pool, a significant move aimed at enhancing the accuracy and relevance of company performance insights.
Previously only ZSE listed firms were recognised.
“This year, we noticed that despite the ZSE reporting in local currency, more companies are providing US$ figures, reflecting the increased dollarisation of our economy,” Musa said.
This shift has allowed for a more sanitised estimate of company performance, crucial for stakeholders navigating the complexities of the current macro-economic environment.
Despite improvements in adherence to reporting deadlines, Musa expressed concerns over the diminishing usefulness of audit processes.
“An audit should provide reasonable assurance of financial accuracy, yet it is becoming a mere tick box exercise,” she said.
This deterioration, she noted, hampers the ability of businesses to present their financial realities accurately, often resulting in qualified opinions that do not reflect the ground realities.
The survey’s core structure remains robust, balancing 70 percent quantitative data with 30 percent qualitative factors. However, the insurance industry continues to lag behind, relying solely on quantitative performance due to the absence of mandatory qualitative disclosures. This lack has raised questions about the reliability of the sector’s assessments.
Beverages maker, Delta Corporation won the best company award for the second year running, reflecting its remarkable growth sustained in the past few years.