What's Happening?
A recent study conducted by KPMG reveals that businesses in Uganda are increasingly adopting environmental, social, and governance (ESG) practices. The study surveyed 56 companies, highlighting a growing
awareness among Ugandan businesses of their environmental and social impact, as well as the importance of adhering to international regulations. With 70% of these companies having ties to international markets such as Europe and the United States, compliance with global standards is becoming a priority. The report indicates that 91% of the surveyed businesses plan to meet new ESG standards before they become mandatory in Uganda, viewing this proactive approach as a competitive advantage. However, challenges remain, particularly in data collection and assessment of environmental impacts on finances.
Why It's Important?
The shift towards ESG practices is crucial for Uganda's economy, particularly as agriculture, which supports 70% of the population, is vulnerable to climate change. By adopting these practices, businesses aim to mitigate risks associated with environmental changes and enhance their competitiveness in global markets. The Ugandan government's goal to reduce greenhouse gas emissions by 24.7% by 2030 underscores the importance of these efforts. For businesses, embedding ESG strategies not only ensures compliance but also drives long-term sustainability and value creation, building trust with stakeholders and securing future profitability.
What's Next?
As Ugandan businesses continue to integrate ESG practices, they are seeking guidance on improving their operations. The report shows that 88% of companies are interested in evaluating operational gaps, while 98% desire regular updates on regulatory changes. This indicates a strong commitment to continuous improvement and adaptation to the evolving ESG landscape. The focus will likely remain on enhancing data collection methods and conducting thorough assessments of environmental impacts, which are essential for effective ESG reporting and strategy implementation.
