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Listed firms fail environmental compliance



ONLY about 20 out of 56 active companies on the Zimbabwe Stock Exchange (ZSE) are complying with a law compelling listed firms to make environmental, social and governance (ESG) disclosures, a local sustainability reporting watchdog has said.


Amid growing concerns on carbon emissions and global warming, most companies in developed countries and advanced economies in Africa are now reporting more on how their operations are co-existing with the environment.

Rodney Ndamba Institute of Sustainability Africa (Insaf) told The NewsHawks that only 18 companies listed on the ZSE are making full disclosures on ESGs as uptake remains low. In Africa, South Africa, Nigeria and Kenya are leading, Ndamba said.  Currently 56 out of the 63 listed firms are active while the remainder are suspended.

Statutory Instrument 134 of 2019 compels listed companies to disclose their sustainability policy, including mitigation of risks, sustainability performance data and other material information which deepen stakeholders’ understanding of corporate performance. Companies were given a grace period of three years to comply with the law.

“The ZSE, a member of the UN Sustainable Stock Exchanges initiative, is obliged to comply with sustainable reporting guidelines. There is need for some companies to reconstitute their boards to ensure that issues of ESGs are taken seriously,” Ndamba said.

“Out of the 20 those that are genuinely making disclosures could be four or five. Companies should not report for the sake of reporting but they should also demonstrate how their policies are impacting the environment. There is also need to stimulate investors to have an interest on ESG-related issues. The more they ask such issues at annual general meetings, the more companies will start making more disclosures.”

Gerald Dzangare, the Securities and Exchange Commission of Zimbabwe acting chief executive, said the country’s capital markets regulator will ensure that companies comply with the law by year-end.

“Climate change is an aspect of sustainability. For us to attract investors, listed companies need to comply with sustainable reporting standards because those are what investors are looking for. Our hope as the regulator is that the listed companies will disclose more so that we attract more capital,” Dzangare said.

According to the statutory instrument, listed companies should provide a balanced and objective view of their performance by including both positive and negative impacts on environment and society, how it relates to its stakeholders and contribute to sustainable development.

“The ZSE encourages the adoption of internationally accepted reporting frameworks, such as the Global Reporting Initiatives (GRI) Sustainability Reporting Guidelines or Standards, in disclosing the company’s sustainability performance. The GRI Sustainability Reporting Guidelines or Standards are globally applicable and set out general principles and indicators that listed companies can use to measure and report their economic, environment and social performance,” the statutory instrument reads.

“The company shall provide sustainability information either in an annual report showing a holistic presentation combining or integrating financial and non-financial disclosures (environmental and social issues) reflective of the company’s corporate practices; a standalone sustainability report giving a comprehensive disclosure of environmental and social issues and the report should be referenced in any reporting of annual financial statements by providing a summary of sustainability information linked to the standalone report.”

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