Zimbabwe: Econet lauded for leading in adopting ESG as part of its business strategy

Econet Wireless Zimbabwe has been hailed as a leader in adopting environmental, social and governance (ESG) issues and integrating them into its business strategy.

The listed telecommunication and technology firm scooped the Best Environmental Social Governance company and the Best Investor Communication Award at the Capital Markets Awards held in Harare recently.

“Econet has gone beyond ‘box ticking’ and linked its actions to the business strategy and purpose,” said the organisers of the awards.

“Good governance is about building and nurturing a healthy culture, ensuring engagement with investors, customers and the workforce and maintaining key governance virtues such as evaluation, audit and risk, independence, diversity and strong succession planning.”

The awards, hosted by the Business Weekly and the Financial Markets Indaba, come at a time many businesses across the world are beginning to reap the fruits of embracing the ESG concept, including attracting investors’ attention and ultimate support, gaining customer loyalty and drawing top talent across labour markets.

However, in Zimbabwe – for different reasons – many companies appear to be still quite some way to grasping and implementing ESG, which refers to a set of criteria used to measure an organisation’s performance in a range of areas such as carbon emissions, contributions to society and boardroom diversity.

Econet, which has integrated ESG across all of its investment strategies, recently joined the United Nations Global Compact (UNGC) initiative – a voluntary leadership platform for the development, implementation and disclosure of responsible business practices.

The UNGC is a call to companies globally to align their operations and strategies with globally accepted principles in the areas of human rights, labour, environment and anti-corruption, and to take action in support of the UN goals. These are embodied in its 17 Sustainable Development Goals (SDGs) which address many of the world’s most pressing needs.

Econet’s Chief Operating Officer Kezito Makuni said the company has a responsibility towards its environment and the impact of its economic activities.

“In the area of sustainability, we are determined to meet our social and environmental responsibilities as a company. In addition we believe that long-term economic success can only come from responsible business practices,” he said.

Econet is working on several initiatives such as installation of solar-powered base stations, powering office sites with renewable energy and planting trees to offset carbon emissions as well as implementing strategies for e-waste monetisation and recycling.

Mr Makuni said the company will continue to integrate the core ESG priorities within its businesses with a strong focus on innovation, digital enablement, good supply chain governance and creating a shared economy.

“To achieve this, our ESG strategy continues to drive shared value in the economy and the communities we operate in. Our business leadership and executives recognise this, and have had Environmental, Social and Governance metrics embedded into their performance scorecards to ensure we actually move the needle in this regard,” he said.

He added that by asserting ownership of ESG from the executive level of the business down to the operational level, Econet aims to ensure the promotion of its sustainability strategies within the business as it drives the development of digital solutions that empower people and the economy at large.

He reiterated that Econet Wireless’s board continued to give valuable oversight on the company’s performance with respect to ESG factors as part of their duty to directly oversee the business’ corporate strategy.

The latest development comes after a recent study by EY, the management consulting and advisory company, revealed that ESG factors are positively correlated with companies’ financial performance and attractiveness to investors.

“There is a mismatch between the growing amount of investment dollars looking for genuine ESG leaders and the limited supply of these companies. This can result in a lower cost of capital for companies that embrace ESG and demonstrate tangible success,” read part of the report.

EY added that given the link between an ESG strategy and the cost of capital, investors are increasingly focusing on understanding a company’s ability to manage long-term risks through ESG disclosures.

The credibility of ESG disclosures has therefore become critical in the process of attracting the right investors, across the capital structure, the company said.