ZSE to enforce ESG reporting

THE Zimbabwe Stock Exchange (ZSE) will soon make it mandatory for listed companies to report on sustainability and climate change issues as businesses around the world come under increasing pressure to shift to a more socially-conscious form of stakeholder capitalism.
Justin Bgoni, the local bourse’s chief executive, told The Financial Gazette that the ZSE will soon implement a number of measures to ensure that companies adopt a new reporting framework on their environmental, social and governance (ESG) impacts.

ESG reporting is aimed at helping companies operate responsibly and help in addressing global challenges, such as global warming and human trafficking.

“The ZSE revised its listing rules in 2019 to encompass requirements for sustainability information and disclosure. The plan is to implement ESG disclosure requirements through training first and review of financial reports published by listed companies. We will be issuing a guideline shortly that will give a timeline on when ESG reporting will become compulsory,” he said in emailed responses.

ESG reporting is aimed at helping companies operate responsibly and help in addressing global challenges, such as global warming and human trafficking.

Ultimately, organisations are required to create a report that will allow stakeholders to understand the company’s operations.
From the report, stakeholders will be able to decide whether to buy its products, invest in the company, or join its community.

Bgoni said listed companies that fail to fulfil ESG reporting requirements may see their bottom line suffering due to lack of investors and customers.
“Given this growing global demand for companies to move towards sustainable practices, socially responsible investment leaves little choice for our companies other than to adopt ESG principles. For those that will fall behind, they will likely tarnish their brand and reputation, lose competitive advantage and ultimately witness a decrease in their bottom line,” he said.
The JSE has already published ESG guidelines for companies.

The latest development comes as several local companies have already started following ESG reporting guidelines.
Last year, telecommunications giant Econet Wireless Zimbabwe took a major step in demonstrating its commitment to sustainable development by joining the United Nations Global Compact (UNGC), the world’ largest corporate sustainability initiative.

The UNGC brings together businesses from across the globe to implement principles of sustainable development and corporate responsibility. It has more than 13 000 companies in over 160 countries.

The initiative encourages organisations to align their strategies and operations with universally accepted principles of environment, social, governance and human rights, as well as the sustainable development goals.

Econet Zimbabwe chief executive Douglas Mboweni said becoming a member of the UNCG was part of the mobile telecommunications organisation’s commitment to sustainability.

“As a UNGC participant, we will be able to leverage the initiative’s vast global network of participants to embed sustainability into our core strategies and operations.
“We very much look forward to working with member organisations to advance sustainability through this initiative, drawing inspiration from others, and hoping that some organisations will learn from our own experiences,” he said.
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