Corporate reporting on sustainability issues in Africa remains patchy and should be expanded in scope, according to the Africa Sustainability Barometer, which gauges the state of corporate sustainability reporting (CSR) on the continent.
A new joint initiative of the United Nations Global Compact (GC) and the Financial Times, the barometer covers more than 1,000 international companies with operations in the region, as well as local and regional companies.
The results show that for those companies that understand how sustainability affects their corporate performance, increased reporting and integration of the sustainability agenda is likely. For companies that operate in a more isolated manner, and for the many smaller companies who are not in the public eye, advocacy work has a long way to go.
“With the Africa Sustainability Barometer, we hope to shine a light on the current efforts by companies to report on their sustainability, make the case for the value of comprehensive reporting, and encourage more companies across the continent to commit to responsible practices,” said Georg Kell, Executive Director of the GC.
Covering the scope of corporate sustainability, the Barometer assesses human rights, labor and employment, environment, anti-corruption as well as corporate governance and supply chain management.
The Barometer also comes at a time when Africa is attracting unprecedented levels of foreign investment but continues to face several challenges in improving governance and regulation to ensure that the current wave of capital flowing into the continent is supportive of inclusive and sustainable growth.
“A growing number of investors now include environmental, social and governance (ESG) in their due diligence and risk assessment as important factors in making investment decisions,” said Lanre Akinola, Editor of This is Africa, Financial Times. “Companies that have a coherent and effective approach to ESG stand out. As such, sustainability can play an important role in driving investment to the continent, and attracting the long-term capital it needs.”
Launched during the UN Private Sector Forum: Africa, held during the UN Global Compact Leaders Summit 2013 in New York, the Barometer is meant to be issued annually, and will be a source of information on the changing role of sustainable business as a means to achieve development objectives in Africa. It also will be a practical tool for practitioners, investors, civil society and Government.
Last week, the GC, in partnership with research firm Sustainalytics, released a new stock index of companies made up of a representative group of GC companies selected based on their adherence to the GC’s ten principles, as well as evidence of executive leadership commitment and consistent base-line profitability.