Rwanda Stock Exchange, on December 19, launched ESG (Environment, Sustainability, Governance) Disclosure Guidance that will foster the integration of sustainability compliance among listed and non-listed companies in the Rwandan market. Experts assert that championing ESG disclosure and transparency ensures that capital flows towards initiatives that build a resilient and inclusive economy, hence the guidelines emphasise value creation beyond financial metrics, encouraging companies to innovate and adapt within a rapidly changing global landscape. ALSO READ: ESG and sustainability reporting: Why it matters for your business Bhongolwethu Sonti, GRI Africa Program Manager, said that ESG integration is not just a corporate strategy but a financial imperative as sustainable finance has emerged as a key driver of economic transformation, globally. He said that while ESG adoption in Rwanda is fairly nascent in terms of disclosure, there has been an acceleration of awareness amongst companies over the past two years, to understand their sustainability performance and impact. “For companies, aligning with sustainable finance principles means better access to capital markets, more favorable loan terms, and increased investor confidence. For investors, it means contributing to meaningful change while achieving competitive returns.” He challenged businesses to ensure that boardrooms prioritise ESG integration with clear oversight and accountability, tap into green financing opportunities to fund impactful projects and innovations and share knowledge and resources to build a thriving ecosystem of sustainability in Rwanda. ALSO READ: New governance rules mandate ESG integration Pierre Celestin Rwabukumba, Chief Executive Officer of RSE, said that this positions Rwanda’s capital market in line with international standards that facilitate attracting investments, in addition to being aligned with the government’s policy. He said that the implementation of the guidelines will be on a voluntary basis buoyed with awareness efforts on the benefits of integrating ESG in company strategies, and it will transition to a mandatory approach in the long run. On the issue of capacity in the local market for ESG assessment and reporting, Rwabukumba noted that there is basic capacity that lays the ground for implementation, however, there is still a need for increased awareness and capacity building. The expert involved in the development of the ESG guidelines, Loise Wangui Musyoka, who is a Managing Partner at Protos Capital LLP, said that they are meant to help companies, big or small, to start their journey around sustainability from the governing structure, doing their materiality and eventually tell their sustainability story. She mentioned that it was easy to introduce the sustainability agenda in the Rwandan market as the tone had already been set by the government but the gap was how stakeholders go about implementing it. “The stakeholders we spoke to knew exactly what ESG is, what sustainability is, but the gap was largely on how they go about it and the need for technical assistance and expertise to handhold the integration of ESG into business operations.” Musyoka noted that while the cost is mostly on upskilling people and building internal expertise within organisations, it is by far less than the non-compliance cost that may be incurred. “There are those that will be low-hanging fruits that can actually be areas where businesses create value and save cost, but in the long term, there are those capital-intensive engagements, especially the solarisation, energy, among others that will be costly.”
