African businesses must get ahead of the curve in sustainable investing
Increased interest in ESG from US and global investors will mean higher levels of regulation for fund managers seeking to raise capital from these investors
As sustainable finance incorporating environmental, social and governance (ESG) factors move up the global policy and regulation agendas, it is an area Africans cannot ignore and should lead on. It’s becoming an essential ingredient for attracting investment — a whopping $31-trillion of funding conformed to ESG criteria in 2018, and later figures will be even bigger. It’s increasingly being adopted by pension funds, financial institutions and big investors like BlackRock, and most important governments are nudging investors in the same direction.
The UK government has proposed that £5bn-plus ($7bn-plus) occupational pension schemes will have to disclose climate risks by the end of 2022. The European Commission will be requiring sustainable investment frameworks. While the EU — the biggest, richest single market in the world — doesn’t regulate corporate disclosures itself (that’s done by the 27 individual member states), it regulates financial services and has asked the sector ...
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