To print this article, all you need is to be registered or login on Mondaq.com.
As the world prepares for the 28th Conference of the Parties (COP) of the United Nations Framework Convention on Climate Change (UNFCCC), Zimbabwe is focusing on ESG and sustainability reporting, specifically regarding climate change. With the adoption of climate-proof and climate-smart agriculture known as Pfumvudza, Zimbabwe aims to counter the adverse effects of climate change. Companies listed on the Zimbabwe Stock Exchange (ZSE) and the Victoria Falls Stock Exchange (VFEX) are also expected to adopt core sustainability disclosure metrics starting January 2024. These measures come as part of the country’s commitment to the United Nations Sustainable Development Goals (SDGs) and its long-term vision for sustainable development.
The Environmental Management Agency (EMA), established under the Environmental Management Act Chapter 20:27, plays a crucial role in sustainable resource management, environmental protection, and pollution prevention in Zimbabwe. However, ESG reporting in the country has been limited to compliance with EMA regulations, with little integration into financial statements. To address this, the Zimbabwe Stock Exchange has issued Practice Note No. 16, which requires listed companies to disclose economic, environmental, social, and governance information. This move aims to enhance transparency and accountability in business operations.
One of the key aspects of sustainability reporting is greenhouse gas (GHG) emissions reporting. To ensure comprehensive reporting, GHG emissions should be evaluated in three scopes: direct emissions from the organization, indirect emissions based on energy consumption, and indirect emissions resulting from the organization’s impact on the wider community. The Public Accountants and Auditors Board in Zimbabwe (PAAB) has called for early adoption of International Financial Reporting Standards (IFRS) S1 and S2, which address sustainability-related financial information disclosure and climate-related disclosures, respectively. These standards align with the global push for sustainable practices and reporting.
The adoption of these reporting requirements presents opportunities for businesses to align their operations with sustainable practices. By integrating ESG and sustainability considerations into their strategies, organizations can enhance their reputation, attract socially conscious investors, and contribute to a more sustainable future. Moreover, the International Accounting Standards Board and International Sustainability Standards Board are working on IFRS Accounting Standards and IFRS Sustainability Disclosure Standards, respectively, to ensure that financial statements and sustainability disclosures effectively reach investors and other market participants.
As the world gears up for the UNFCCC COP in the United Arab Emirates, businesses and countries alike are recognizing the urgent need to address climate change and embrace sustainable practices. Zimbabwe’s commitment to ESG and sustainability reporting demonstrates its dedication towards achieving the SDGs and Agenda 2063. By aligning financial statements with sustainability metrics and disclosing their impact on the environment and society, organizations can contribute to the global efforts aimed at creating a more sustainable and resilient future.
In Part 2 of this series on ESG and Sustainability Reporting in Zimbabwe, we will delve deeper into the new reporting requirements and explore the various opportunities for businesses to adopt sustainable operations. Stay tuned for more insights and guidance on navigating the evolving landscape of ESG and sustainability reporting in Zimbabwe and beyond.
