SMEs struggle to 'afford' ESG compliance
Pauline Dikuelo | Monday April 17, 2023 06:00
ESG standards are increasingly preferred by investors globally and refer to a company’s behaviour and its commitment to the safeguarding of the environment, engaging or benefiting the community, and adhering to sound corporate governance.
ESG standards cut across areas such as climate change, relationships with employees and suppliers, sustainable sourcing, executive pay, shareholder rights and others.
Speaking at the inaugural Botswana ESG and Sustainable Finance Forum 2023 on Wednesday, Keebine said the bulk of SMEs could not afford to comply with ESG standards as these came at a cost.
“The bulk of our members as Business Botswana are SMEs who do not have financial muscle and incorporating ESGs will add another burden. “Even the kind of personnel that is required for ESGs is very expensive for an SME,” he said.
According to Keebine, there is a need to simplify ESG standards for the local market. Business Botswana estimates that only 15% of its members can afford to adhere to ESG standards as these companies already have structures in place, the capacity, and the ability to fund those structures. These companies are also able to create an ESG department that will look at how the standards will be implemented and maintained.
“How do we simplify ESG? How do we make it Botswana relevant? “We cannot be using the ESG from other countries and adopt it. “Let’s try and break it down,” he said.
Meanwhile investors see more financial potential from long term investment in ESG as they believe the standards will steer companies away from losses and towards success.
The two-day Forum was held under the theme ‘Green-Growth Paradigm for Botswana: Investment Strategies for Sustainable Value Creation.’
Organisers describe the ESG Botswana forum as a country-specific programme primarily developed for institutional investors and big business to come together and engage in implementable conversations that will lead to strategies to help the country thrive economically.
The Forum, which is organised by MNCapital Group, is designed as a meeting platform for the institutional and ESG ecosystem where participants engage in best practices.