Listed companies invited to participate in 2024 Sanlam ESG Barometer research

The challenges to SA's transition to a low-carbon economy are more formidable than most countries.

On the one hand, the country needs to attract large amounts of investment to finance the transition, particularly in how it produces electricity. According to research by the National Business Institute, that alone will require investment of at least R6-trillion by 2050.

On the other hand, because the country is the 15th-biggest carbon emitter and scores poorly on many global social development indices, global investors are increasingly shunning it in the name of environmental, social and governance (ESG) issues. 

SA’s extremely high unemployment levels and extreme inequality make its transition particularly complex and demands that social issues be placed at the forefront of all transition initiatives, particularly when it entails job losses. 

A major challenge for the country is to secure funding for decarbonisation efforts, especially as it relates to ensuring a just transition to a low-carbon economy to mitigate against job and livelihood losses and the erosion of development gains post-1994. This includes funding for job reskilling, economic diversification and the repurposing of mining land and facilities. 

For optimal results, it is crucial to conduct substantive on-the-ground research to determine, from affected communities, what the financial, livelihood and social impact, among other issues, of the initiatives will be, and the findings to be incorporated into transition implementation plans.

Support for the objectives of a just transition falls within the focus and mandate of South African and global companies.

The 2023 Sanlam ESG Barometer report, however, published in partnership with Business Day and researched by Krutham, highlighted the ironic situation that had evolved in international markets where funding for ESG initiatives in SA was being blocked by ESG screening methodologies that direct investments to countries with high ESG scores.

The opposite is required: investments need to be directed towards areas most in need of funding to reduce emissions and accelerate social development. 

The 2023 Sanlam ESG Barometer report therefore focused on ESG additionality, which is forward-looking. It assessed the impact that an investment will make on future ESG performance, and the investment is seen as a tool to actively drive transformative and tangible, measurable change.

Research has begun for the 2024 instalment of the Sanlam ESG Barometer report, where additionality will again be central along with a stronger focus on social issues.

As we edge closer to the 2030 deadline set for the UN Sustainable Development Goals (SDGs), the role that companies play in meeting these targets becomes critical.

Recognising this call to action, the 2024 Sanlam ESG Barometer, in partnership with Business Day and Krutham, will delve deeper into the alignment between company ESG practices and the SDGs. It will look at how companies integrate SDGs into their ESG strategies as well as the barriers in adopting SDGs across different contexts and sectors.

The research is also being expanded to Kenya and all listed companies are invited to participate. By doing this, Krutham's researchers hope to gauge how ESG principles are integrated and implemented across two major African economies. 

The primary objectives of the research are to help provide direction on the practice and development of ESG in respect of company behaviour; and to research ESG additionality — determining the active efforts of major South African and Kenyan companies to improve the societies in which they operate from both an environmental and social perspective.

The research will promote an active approach to ESG additionality among JSE-listed companies and Nairobi Securities Exchange-listed companies, in contrast to a passive risk management conception of ESG that underestimates the ability of business to change the world for the better.

Finding ways to promote ESG investing as an active investment strategy that seeks to identify ESG additionality opportunities is important if business and the investing community is serious about tackling the world’s most pressing problems. 

Listed companies across SA and Kenya can contribute to this research by completing a survey on the Krutham website. By participating, you'll help to shape a comprehensive understanding of local ESG practices and viewpoints, which will play a vital role in influencing how Africa is represented in conversations on global sustainability. 

For more information on how to participate in the 2024 Sanlam ESG Barometer, or for queries about the survey process, contact Cecilia Schultz, senior researcher at Krutham, via email at cschultz@krutham.com.

Click here to complete the 2024 Sanlam ESG Barometer survey.

• About the author: Colin Anthony is head of media projects at Krutham.

This article was sponsored by Sanlam.