Sustainability-related disclosure is rapidly evolving across Africa, driven by increasing awareness of environmental, social, and governance (ESG) issues and a rising demand for transparency and accountability in business practices. Companies are now expected to adopt ESG principles to secure funding and maintain investor confidence. 

Philippa Burmeister, partner and principal environmental scientist at SRK Consulting, highlights that the Johannesburg Stock Exchange (JSE) is leading the charge in promoting ESG awareness on the continent. The JSE requires listed companies to produce integrated reports that encompass sustainability information, aligning with stock exchanges in Europe and North America. The African Securities Exchanges Association (ASEA) supports this initiative by harmonizing sustainability reporting standards across member exchanges to promote consistency in ESG disclosures. 

The African Development Bank (AfDB) also plays a crucial role by encouraging companies to embrace ESG reporting through various initiatives and funding programs. Most disclosure practices in Africa are influenced by international organizations, such as the Global Reporting Initiative (GRI) and the Task Force on Climate-related Financial Disclosures (TCFD). These frameworks guide businesses in assessing and reporting their ESG risks and opportunities. 

Although the TCFD has completed its mandate, the International Financial Reporting Standards (IFRS) Foundation has taken over climate-related disclosure oversight. The IFRS released the IFRS S2 Sustainability Disclosure Standard in June 2023, which requires entities to disclose climate-related risks and opportunities, offering more comprehensive guidelines than the TCFD. 

As businesses face the need for more complex and in-depth disclosures, specialized expertise in consulting is increasingly vital. Skills in greenhouse gas quantification, decarbonization strategies, and climate change projection are essential for addressing both transitional and physical climate risks. This shift emphasizes the importance of adopting effective ESG practices to secure sustainable investments and foster long-term economic growth across Africa. 

Sources:  

https://www.miningreview.com/features-analysis/esg-disclosure-demands-on-the-increase-in-africa/ 

https://www.ebnet.co.za/changes-on-the-horizon-for-esg-disclosures-in-south-africa/ 

https://www.morganlewis.com/pubs/2024/08/esg-investments-the-middle-eastern-and-african-regulatory-perspective-part-2 

https://www.ensafrica.com/news/detail/6053/the-growth-of-esg-as-a-focus-area-in-africa