Social issues dominate African ESG

Author: Jimmie Franklin | Published: 9 Apr 2020

Unlike more developed jurisdictions, African financial institutions’ interest in environmental, social and governance (ESG) initiatives has largely centred on social issues.

"From a pan-African perspective, there is probably more of an emphasis on alleviating social issues," said Herbert Smith Freehills partner Rudolph Du Plessis. "That doesn’t mean institutions aren’t interested in environmental deals, but regulators throughout the continent are highly focused on the implications for employees and society."

This is most tangible in South Africa. The Companies Act states 'that a company or a category of companies must have a social and ethics committee, if it is desirable in the public interest’. This had led to public companies bringing matters within their mandate to the board, with a need to also disclose to shareholders.

"It certainly places ESG issues on the board's radar," continued Du Plessis. "It makes the board consider the impact of all its business activities...