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Wednesday, May 29, 2024

Environmental, Social and Governance requirements for listed firms take effect

Story by Stanley James, Business editor

ZIMBABWE’s listed companies will with effect from this year include Environmental, Social and Governance issues within their financial statements in line with global trends.

Under the Environment Social and Governance (ESG) regulations, the listed firms will now include information on the treatment of the environment in which they operate, corporate or social responsibility issues, human resources and board of directors structures.

The directive is being made on the realisation that listed companies should provide all the relevant aspects relating to their performances apart from just announcing profits, dividends and losses to shareholders.

Chartered Governance and Accountancy Institute in Zimbabwe Chief Executive Officer Dr Lovemore Gomera explains the importance of complying with the new regulations.

“ESG is the way to go given the global trends and how the international markets are operating it is no longer about just telling the public how the company has progressed it is now about sustainability issues so that the market can also understand how a company is committed to the future operations for the benefit of shareholders,” said Dr Gomera.

With most entities also being expected to release their financial statements by March this year, market watchers are waiting to assess whether the firms will include the new requirements.

“Very soon results of listed firms shall be released and I think market watchers will be eagerly waiting to see compliance and response by the authorities to those firms that will not have complied with the directive so indeed it will be an exciting period so let’s wait and see how all goes on,” said Dr Gomera.

Regulatory authorities have maintained their stance on ESG regulations as they seek to attract global capital inflows.

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