IPAZ 5th edition resolves to prioritise ESG financing

DELEGATES to the recently concluded fifth edition of the Investment Professionals of Zimbabwe (Ipaz) Summer School have resolved to prioritise environmental, social and governance (ESG) financing to facilitate a smooth transition to a low-carbon economy while aligning with global Sustainable Development Goals (SDGs).

The conference was held in Bulawayo on Friday under the theme; “Building Climate Resilience Through Innovative Finance,” and brought together industry leaders, policymakers and investors who highlighted the growing importance of ESG factors in shaping the future of investments.

Chartered development finance analyst and executive director at the Institute of Sustainability and Development, Mrs Veronica Chakaraza, said ESG financing was critical for the modern investment landscape.

IPAZ board members with Deputy Finance Minister Hon DK Mnangagwa and Minister of Industry and Commerce Hon NM Ndlovu

“We have the aspect of impact investing where we begin to see the blending of non-profit and for profit financing and also measuring the money that flows within that space.

“So, you will realise that for example in the 19th century, the funding was more focused on the reward. Then in the 20th century, there was now the reward and the risk and now in the 21st century, we have the reward, the risk but also the social and environmental impact and that is why we want to make an emphasis on ESG,” said Mrs Chakaraza.

“People are beginning to understand why we need to take care of our environment because it will take care of us and that is why we should be socially and generously responsive even in our programming and investments.

“By incorporating ESG considerations into their investment strategies, businesses can not only enhance their reputation and attract socially conscious investors but also contribute to a more sustainable and resilient future.”

Hon DK Mnangagwa and Hon NM Ndlovu and IPAZ immediate past president Bevin Ngara

The conference emphasised the specific benefits of ESG financing for the region, including increased investment attractiveness. Ipaz president, Mr Bevin Ngara said companies that adopt the ESG strategy were most likely to attract more investment, which will drive the region’s goal of transitioning to a low carbon economy.
“It’s critical that companies invest in ESG because companies with strong ESG credentials are increasingly being sought after by investors who are looking to align their portfolios with ethical and sustainable values,” he said.

“In developing countries, while we are not the biggest perpetrators of emission of greenhouse gases, we are facing the worst consequences. If we design or develop investment projects that align with sustaining the environment, we will be appealing to investors.

“The faster we adopt ESG, the faster we will transition to a low carbon economy,” he said

The Ipaz conference also provided a platform for discussions on the challenges and opportunities associated with ESG financing in the region. Participants explored ways to overcome barriers such as limited data availability, regulatory hurdles and a lack of awareness among investors.

The deputy minister of Finance, Economic Development and Investment Promotion, David Kudakwashe Mnangangwa said the issue of climate financing should be private sector driven, adding that the Government was willing to help with policy making issues.

Hon DK Mnangagwa

“Naturally, all ESG activities, even carbon trading and green financing really need to be private sector driven, what we’ve done and what we are doing as Government is to put in place the right policies,” he said.

“There is an S.I. that has been put in place and once the environment is right, we expect the private sector to just take the lead and run with it. I think where there are gaps, we can assist and during the discussions, one thing came up, we realised that there is a lacuna in our Companies and Other Businesses Act that can under ride some of the policies for green financing but that’s something that the investment professionals can collaborate with politicians to make sure that we make amendments.”=chronicle