FUNGAI CHIMWAMUROMBE AND NONTOKOZO MOYO
Introduction
Organizations have realized the importance of addressing environmental, social, and governance (ESG) issues, which has led to a notable increase in the emphasis given to sustainability reporting.
In Zimbabwe all companies listed on the Zimbabwe Stock Exchange are mandated to annually commission their sustainability reports as directed by the Securities and Exchange Rules 2019.
What is sustainability reporting?
A sustainability report is report published by a company or organization about its economic, environmental, social and governance (ESGs) performance. These reports often include information on the company’s efforts and initiatives related to sustainability such as environmental impact, social responsibility, governance practices and stakeholder engagement.
Sustainability reports are mainly aimed at promoting transparency, accountability and responsible business practices. Companies may be required to disclose information on their sustainability initiatives, carbon emissions, energy usage, waste management, human rights impact, social programs (how they are giving back to the society), governance practices and more.
Sustainability reporting frequently conforms to established frameworks and standards that offer guidance for reporting on ESGs, such as the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI). These frameworks aid in making sure that reporting is accurate, consistent, and relevant across many organizations.
However it is notable that the requirement to commission sustainability reports does not extend to private companies in Zimbabwe. The Companies and Other Business Entities Act [Chapter 24:31] despite being the primary legislation governing the operations of companies is silent on sustainability reporting. Nevertheless companies remain obligated to maintain and observe the Environmental Management Act [Chapter 20:27].
Embracing ESG practices offers numerous benefits, including improved reputation, enhanced stakeholder relationships, reduced operational risks, and long-term profitability. Companies that prioritize ESG factors are better equipped to navigate challenges, attract investment, and contribute to sustainable development in Zimbabwe.
Conclusion
Clearing the gap in regularization of the sustainability reporting rule in Zimbabwe will mean aligning with global best practices, attracting foreign investments and contributing towards maintaining a sustainable future. Hence there is need to establish legislation governing the commissioning of sustainability reporting by every company registered and operating in Zimbabwe.
Fungai Chimwamurombe is a registered legal practitioner and Senior Partner at Zenas Legal Practice and can be contacted for feedback at fungai@ zenaslegalpractice.com and WhatsApp 0772 997 889.
Nontokozo Moyo can be contacted on moyonontokozo22@gmail.com, phone number +263 77 770 9303
