If 2023 was the year that saw ESG challenged in the Zimbabwe mainstream media, 2024 will prove that ESG is here to stay. The rapid rollout of mandatory sustainability disclosures is significant not just for the number of companies that will soon be required to report against standardized frameworks, but also for the depth and scope of these reporting requirements.
2024 will be the year we see companies begin to take ESG seriously, not simply as an exercise in compliance and risk management, but as an opportunity to redesign their business models from the ground up. True integration of ESG will mean design processes are remade, procurement strategies are rewritten, and marketing and communication efforts change for good. ESG will no longer be simply an ‘add-on’, but rather a core part of business strategy.
Here are the top five trends to watch in 2024.
1. Rapid Uptake in Mandatory Disclosures
The demand for better corporate transparency, particularly around environmental impact and exposure to the physical and transition risks of a changing climate, came to a head in 2023. New reporting and disclosure requirements will create a new wave of sustainability and ESG reporting for 2024 and beyond.
2024 will be ‘The Year of Compliance’, where companies’ approach to sustainability reporting will move from voluntary to mandated. Regulatory and international body rulings, directives and guidance will force public and privately held companies to meet sustainability measurement and reporting requirements.
In Zimbabwe we have already started to see these developments through regulations by the Zimbabwe Stock Exchange and the Reserve Bank of Zimbabwe.
2. Greenwashing in the Spotlight
Greenwashing a term that has been popular in mainstream criticisms of weak or misleading corporate sustainability efforts, will be supported by stronger legal definitions and consequences in 2024 and beyond. In this space the ESG Network Zimbabwe is coming up with a raft of guidelines and recommendations to curb greenwashing among companies in Zimbabwe.
ESG Network Zimbabwe highly regards Compliance as a key concern for ESG teams, which will need to work closely with communications and marketing teams to ensure environmental, social and governance messages adhere to jurisdictional requirements.
3. Deeper Integration with the Company Balance Sheet
As more Sustainability related financial disclosures become mandatory through developments like the Zimbabwe Stock Exchange and Reserve Bank of Zimbabwe climate disclosure rules, we expect to see a closer integration of finances and sustainability, with ESG becoming increasingly the domain of CFOs and financial controllers.
4. Scope 3 Emissions and Supply Chain Transparency
To date, many voluntary climate reports have steered clear of scope 3, or supply chain emissions. Yet scope 3 often accounts for more than 90 percent of a company’s total greenhouse gas footprint. Consumers are calling for better transparency of product footprints and lifecycles, while environmental and human rights scandals have highlighted how little consumer brands know — and disclose — about how their products are made.
We predict that 2024 will see companies place more emphasis on their supply chains both in supply chain mapping and scope 3 disclosures, and in establishing sustainable, ESG-focused procurement policies and working with their suppliers to improve on both data collection and environmental and social impact.
5. Expansion Beyond Public Enterprises
We expect that 2024 will push sustainability reporting beyond the realm of publicly listed enterprises. Some new sustainability disclosure laws are notable for their inclusion of both public and private companies. We are also hoping that the Procurement Regulatory Authority of Zimbabwe (PRAZ) will come up with measures to clean the procurement sector for the country to encourage any privately owned companies of any size supplying large public or private companies to embrace sustainability seriously.
To learn more about ESG issues you can join us at the ESG Retreat Workshop set for February 22-23 in Mutare at the Leopard Rock. For bookings get in touch with our team on admin@csrnetworkzimbabwe.co.zw, or call 0774768895.
