In a bid to attract investors and bolster competitiveness, Nairobi Securities Exchange (NSE)-listed firms are being urged to adopt sustainable practices. Recent findings have revealed that companies with robust Environmental, Social, and Governance (ESG) programs tend to attract more interest from investors.
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Recognizing this trend, the Ministry of Environment and Climate Change Administration secretary, John Elung’ata, emphasized the growing global demand for transparency and sustainability from businesses. Elung’ata stated, “We encourage businesses to incorporate ESG considerations into their operations, adopt sustainable practices, and promote social responsibility.”
To facilitate this transition, the NSE, in partnership with the Global Reporting Initiative (GRI), issued guidelines mandating firms disclose their approach to critical issues such as community engagement, employee welfare, anti-corruption measures, customer data privacy, and environmental impact.
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However, despite regulatory efforts to drive ESG adoption, progress has been slow within the Nairobi bourse. As of December 2022, only 29 out of the listed companies, accounting for 46 percent, had integrated ESG disclosures in their financial or annual reports, falling short of the November deadline.
In response to this lag, the NSE has collaborated with Risk Insights and GreenCo ESG Consultants to promote ESG practices within the exchange. To kickstart this initiative, an Executive Leadership Breakfast was held, providing industry leaders with a platform to share insights, strategies, and best practices for navigating the complex ESG landscape.
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Geoffrey Odundo, Chief Executive of the NSE, highlighted the significance of ESG issues in today’s global business environment, emphasizing their impact on capital markets. Odundo stated, “ESG issues have become paramount in today’s global business landscape, and their impact on capital markets cannot be overlooked.”
Risk Insights CEO Andrey Bogdanov highlighted that the partnership would facilitate insightful data and discussions on the evolving world of ESG and its implications for companies operating in Kenya. By equipping leaders with valuable strategies and best practices, the event aimed to help companies successfully navigate ESG challenges.
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Irene Keino, Chief Executive of GreenCo ESG Consultants, emphasized the necessity of integrating sustainable practices into business operations for long-term value creation. By doing so, companies can demonstrate their commitment to environmental stewardship, social responsibility, and ethical governance.
As global stakeholders increasingly demand transparency and sustainability, Nairobi Securities Exchange-listed firms must adopt sustainable practices to enhance their competitiveness and attract investors. By embracing sustainability, companies can secure their position in the evolving marketplace and contribute to the creation of a more sustainable future for Kenya and the global economy.
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