Sustainability Reporting: Compliance or Competitive Advantage?

RICHARD NDEBELE

In Zimbabwe’s evolving business landscape, sustainability reporting is gaining prominence as both a regulatory requirement and a strategic tool for competitive advantage. With the recent pronouncements by Zimbabwean regulators regarding the adoption of sustainability reporting, businesses are now faced with the choice of treating it as a mere compliance exercise or leveraging it for long-term growth. This article explores Zimbabwe’s sustainability reporting journey and how local businesses can turn compliance into opportunity.

The Regulatory Shift Towards Sustainability Reporting

Regulators in Zimbabwe, including the Zimbabwe Stock Exchange (ZSE), the Public Accountants and Auditors Board (PAAB), and the Victoria Falls Stock Exchange (VFEX), have made it clear that sustainability reporting is no longer optional. On 12 February 2025, these regulators issued a joint statement mandating the submission of sustainability reports for all listed entities with financial years commencing on or after 1 January 2024. This requirement aligns with Statutory Instrument 134 of 2019 (Securities and Exchange (Zimbabwe Stock Exchange Listings Requirements) Rules, 2019), ZSE Practice Note 16, and VFEX Practice Note 2.

Zimbabwe has also adopted the IFRS Sustainability Disclosure Standards issued by the International Sustainability Standards Board (ISSB) in November 2022. While the implementation of IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) is not yet mandatory, PAAB is currently developing an implementation roadmap to guide businesses in aligning with these global standards. Further guidance on this transition is expected in due course.

It is important to note that while the submission of sustainability reports is compulsory, the assurance of these reports is not yet required. This phased approach allows businesses to build capacity while gradually enhancing transparency and accountability.

The Business Case for Sustainability Reporting

Beyond compliance, sustainability reporting presents significant benefits for businesses. Companies that proactively integrate sustainability into their strategy enjoy stronger investor confidence, better risk management, and enhanced brand reputation. In Zimbabwe, where businesses face economic volatility and resource constraints, sustainability practices can lead to cost savings, operational efficiency, and long-term resilience.

For instance, leading Zimbabwean firms in the financial sector have started embracing green finance initiatives, with some banks issuing sustainability-linked loans and green bonds to support eco-friendly projects. These financial instruments not only provide access to capital but also position businesses as responsible corporate citizens, appealing to both local and international investors.

Consumer and Market Expectations

Zimbabwean consumers are becoming increasingly aware of sustainability issues, with a growing preference for brands that demonstrate environmental and social responsibility. Companies that align with these expectations build customer loyalty and differentiate themselves in competitive markets.

Retailers and manufacturers in Zimbabwe are beginning to adopt sustainable business practices, such as reducing plastic packaging and investing in renewable energy solutions. These initiatives, coupled with transparent sustainability reporting, help companies gain consumer trust and secure a competitive edge in the market.

Risk Management and Business Resilience

Climate change and environmental risks pose significant threats to businesses in Zimbabwe, particularly in sectors such as agriculture, mining, and manufacturing. Sustainability reporting enables companies to assess and mitigate these risks by identifying vulnerabilities in their operations and implementing adaptive strategies.

Several Zimbabwean companies in the agriculture sector have started integrating climate-smart farming practices into their business models, improving productivity while reducing environmental impact. By reporting on these initiatives, they not only comply with regulatory requirements but also demonstrate resilience and innovation, making them more attractive to investors and stakeholders.

Moving Beyond Compliance

To fully realize the benefits of sustainability reporting, Zimbabwean businesses must move beyond a tick-box approach and embed sustainability into their corporate culture. This requires leadership commitment, stakeholder engagement, and a shift in mindset from viewing sustainability as an obligation to recognizing it as a driver of growth.

Companies that lead in sustainability reporting will not only meet regulatory expectations but also position themselves as industry pioneers, setting benchmarks for best practices in governance and sustainability. The journey towards sustainability is not just about meeting minimum standards—it is about creating long-term value for businesses, communities, and the economy at large.

Conclusion

Sustainability reporting in Zimbabwe is at a turning point. While compliance remains a fundamental driver, forward-thinking businesses recognize that it offers far more than regulatory alignment. Those that embrace sustainability as a competitive advantage will enjoy greater investor confidence, operational efficiencies, and enhanced brand reputation. The choice is clear: businesses can either see sustainability reporting as a burden or leverage it as a catalyst for long-term success.

Richard Ndebele FCG, RPAcc, MBA, is the Manager: Technical, Research and Quality Assurance at Chartered Governance and Accountancy Institute in Zimbabwe. He can be contacted on rndebele@cgizim.org

ENDS