ESG And Sustainable Finance Forum 2023: Unpacking the key take aways

By Lorraine Kinnear

Environmental, Social and Governance frameworks enable stakeholders to comprehend how a company is handling possibilities and dangers associated with environmental, social, and governance standards (also known as ESG factors). ESG adopts the comprehensive viewpoint that sustainability encompasses more than just environmental concerns. ESG considerations give investors and investment institutions a more comprehensive understanding of a company’s performance, enabling them to make more informed and well-rounded investment choices. Factoring these into businesses is becoming more of a need than a nice-to-have as our world and global economies continue to be affected by events related to the changes in our environment, the social landscape and governance factors.

It is through having a deep understanding of these considerations that MN Capital Group saw it fit to put together Botswana’s first ever ESG and Sustainable Finance Forum. The Forum took place under the theme, "Green-Growth Paradigm for Botswana

Investment Strategies for Sustainable Value Creation" and was held at Avani Gaborone Resort & Casino, on the 12th and 13th April 2023. Important stakeholders such as government officials, institutional investors, corporate executives, environment and sustainability professionals and activists, fund & asset managers, and many other key stakeholders in the investment and sustainability space came together to unpack matters in the space.

MNCapital Group is a South Africa-headquartered, Africa-focused institutional investment communications and research firm that has become synonymous with hosting high-end conferences and trainings that are specifically curated to highlight investment opportunities within the African continent. It assists institutional funds to function optimally through industry-focused training programmes like the Fund Trustees Intensive, designed to provide trustees with knowledge and skills that they need to navigate their fast-paced working environment.

Event core tenets

The ESG and Sustainable Finance Forum took place as a country-specific programme primarily developed for institutional investors and corporations to come together and engage in implementable conversations that will lead to the formulation of strategies that will see the country thrive economically whilst adopting non-financial factors like the planet and people into their investment decisions.

The Forum was designed as a meeting platform for the entire institutional and ESG ecosystem where participants will engage on best practices on ESG and formulate implementable strategies with the goal of aligning, planet, people and profits. Two key pools of participants were invited, namely key players and stakeholders of Banking and Finance as well as The Corporate Sector.

The evolution of ESG Conferences under MNCapital’s watch

There is a rich history that has followed the ultimate planning and execution of the Forum in Botswana. On the 5th of August 2011, MNCapital hosted the first-ever ESG Conference in Africa, under the banner of, "Africa ESG Integration Forum". The Forum was held at the Johannesburg Stock Exchange (JSE) in Sandton, South Africa. The conference was focusing on "Integrating ESG Investment Strategies in Portfolio Management An Africa Perspective," and was designed to "present an opportunity for Africa's finance and investment community to meet, share, network, and discuss ESG issues in the African context. The keynote speaker at this inaugural ESG conference in Africa, John Oliphant, then Head of Investments and Actuarial at the Government Employees Pension Fund (GEPF) - South Africa, said, "As long-term investors and fiduciaries, institutional investors have the responsibility to ensure that we invest in a way that promote long-term sustainability."

At the time, the ESG conversations were around the capital markets circles and were not a huge concern, if any at all, for the corporate executives. The issues of climate change have become part of the agenda within the context of investors, governments and business in Africa, however, for a very long time, until only about a few years back, it had only been generally seen as "a good thing to do" but not necessarily something that needed to top the agenda across various boardrooms. Now the conversations are rapidly changing, and the world is experiencing an inevitable ESG paradigm shift as external pressure for businesses to operate sustainably mounts.

Now the question, now that ESG has embedded itself into the investment decision processes and the corporate strategy is, can the corporate sector turn ESG into an asset? We believe that ESG is no longer just a consideration, but a business imperative, and it should play an integral part in both the corporate strategy as well as the institutional investment decision making and it being a business imperative, it should be viewed as a new way of doing business, meaning that businesses should continue making profits, and investors should continue getting healthy returns on their investments, only that this time around, there is a deliberate focus on the non-financial issues.

Commenting on the evolution of the ESG Conversations in Africa, as championed by the MNCapital Group, the General Manager of MNCapital Botswana Rre Gobopaone Gasietsiwe said, "Since 2011, the Africa ESG Forum has evolved, and will be on its 9th installment in Cape Town, following the success of our post-Covid-19 pandemic offering of the same event in Mauritius last year (2022). Due to the growing need for stakeholder engagements around the ESG issues, MNCapital Group has decided to intensify its efforts of creating such platforms for these critical conversations, and hence instead of having just one ESG conference that is open to the entire continent, we bring it down to the specific requirements of selected countries, and that is exactly how the Botswana ESG and Sustainable Forum has been born. So far, the responses we are getting from the stakeholders is proof of the importance of this critical project of healing our planet, taking care of our community members, all this while we continue to build our economy."

Why ESG Integration is Fast Becoming Mission-Critical

The year 2020 altered the course of history and ushered in what has come to be known as "the new normal"; today, governments, financial experts, businesspeople, and community members are all attempting to navigate this brave new world and make the most of it in their own unique ways.

Environmental and social responsibility issues have gained attention in the post-pandemic world, and governments and the business sector are under intense pressure to prioritise environmental protection, as well as enhancing the quality of life for those living in their immediate communities, while also achieving their financial objectives.

Why Should the Corporate Sector Integrate ESG Factors?

The corporate world is at the brink of a major turning point as corporate sustainability, championed by the ESG framework, is fast becoming a critical business imperative.

The management teams across various industries will continue to find themselves in a position where they are compelled by investors, shareholders, customers and other stakeholders to strike a balance between financial and non-financial factors, and then marry these into their companies' strategic corporate objectives. Because of this external pressure, some corporate executives might choose to dismiss the whole ESG agenda as merely an item on the list that they need to check off for the sake of appearing to be ESG compliant. This kind of approach would be amiss because the integration of ESG into the core values and principles of any business will avail value-creation opportunities.

ESG Integration into the Institutional Investor Decision-Making

The Covid-19 wave hit while the world, particularly the emerging markets were making headway with the tech-oriented fourth industrial revolution (4iR), with the talks of digitisation of most of the things that were previously done manually, like for example, introducing paperless banking technologies within banking and payments space, the rise of digital music and on-demand "television"; paperless offices, where one could sign-off a document digitally and send it back to the relevant recipients without having to print it out, physically sign it, scan it and send back via email or fax machines. This was all done with the key benefits being, 'efficiency' and 'convenience'.

The pandemic, as it forced people to find "socially-safe" ways of going about their day-to-day businesses and activities, brought to the fore E, S and G issues, and it has since become pivotal for governments, institutional investors and the corporate sector alike, to place a special focus on the triple bottom-line (3BL), "Planet, People, and Profits".

This might sound like an easy approach to simply place as much focus and resources on environmental and social issues as you do on Return on Investment (RoI), however, due to various factors involved in the process of making ESG a key investment decision-making criterion, there is a need for continued intensive trainings and stakeholder engagements as regulations evolve.