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Judith Phiri, Zimpapers Business Hub
WITH sustainable finance becoming a prerequisite for accessing capital, Zimbabwe’s businesses have been called upon to meet environmental, social and governance (ESG) expectations to qualify.
An ESG framework is used to measure a company’s impact and sustainable behaviour.
It evaluates the performance of a business on environmental issues like pollution and waste, social factors such as employee and community relations and governance (like executive pay and board diversity).
ESG principles are used by businesses to prove their responsibility and attract investors. At the same time, investors use them to screen for ethical and sustainable investment opportunities.
In Zimbabwe, to meet the demands of this shift, the Reserve Bank of Zimbabwe (RBZ) is advancing the Sustainability Standards Certification Initiative (SSCI) across the financial sector.
Confederation of Zimbabwe Industries senior economist Dr Tichaona Zivengwa said ESG had various implications for industry.
He made the remarks in a recent stakeholder engagement session where progress and implications for industry were discussed.
“Access to finance from SSCI will increasingly depend on demonstrating commitment to sustainability principles, supporting sustainable productivity growth,” he said.
“Produced goods that align with SSCI standards will find it easier to meet international requirements and secure market access while remaining competitive and resilient.”
He said strengthened ESG compliance will enhance customer and stakeholder confidence as companies demonstrate responsible environmental and social practices.
Dr Zivengwa further said alignment with sustainability standards will help industry stay in step with national and global development priorities and reduce policy inconsistencies.
Mr Louis Herbst, a former vice-president of the Zimbabwe National Chamber of Commerce, Matabeleland Chapter and businessman, said sustainable finance means investors increasingly prefer to put their money into companies that operate responsibly, care for the environment, treat people fairly and manage themselves well.
“Meeting these ESG standards makes a business more likely to attract support, secure affordable loans and gain long-term investment. For Zimbabwe, this shift is particularly important,” he said.
“Our industries have faced years of currency fluctuations, supply shocks and a growing informal sector. To rebuild and grow, capital is needed and much of it will come with ESG expectations.”
He said businesses that ignore these standards risk missing out on funding and regional trade opportunities.
Aligning operations with ESG principles, focusing on human capital, environmental responsibility and operational discipline, is no longer optional if Zimbabwean companies seek to compete continentally and globally.
Mr Herbst said the RBZ’s SSCI provides a national benchmark for these practices, giving banks, investors and companies a clear stamp of credibility.
“Implementing these standards will take patience, corporate education and ongoing support. The long-term benefits are substantial: lower borrowing costs, increased investor confidence, improved operational efficiency and higher-quality goods and services for consumers,” he said.
“ESG and SSCI are not just compliance tools; they are pathways for Zimbabwean businesses, large and small, to access capital, grow and compete successfully. Early adoption will position companies ahead of the curve.”
Economic analyst Mr Reginald Shoko said meeting the demands of sustainable finance was of paramount importance for companies, as it has become a fundamental prerequisite for accessing capital, ensuring long-term resilience and maintaining competitiveness in the market.
“This shift is driven by powerful market forces, including investor preference for ESG-aligned assets, the need for enhanced risk management and increasing consumer and regulatory demands,” he said.
“For Zimbabwe, the RBZ’s SSCI is a pivotal strategy that mandates sector-wide change, with over 90 percent of banks enrolled, setting a new benchmark for the entire financial sector.
“The SSCI aims to build stronger and more purposeful institutions that are profitable while also caring for people and the planet. Crucially, the initiative connects national development to global finance, with SSCI certification validating that local institutions meet international standards, thereby enhancing stability and attracting global capital.”
He said by aligning with national development goals, the SSCI ensures the financial sector directly supports key economic priorities like agriculture and infrastructure, making it a crucial strategy for sustainable national development.
Meanwhile, such developments also come at a time Zimbabwe has been commended for the progress it has made in the implementation of International Public Sector Accounting Standards (IPSAS), which seek to promote high-quality, consistent public financial reporting and accountability.
IPSAS are accrual-based standards that aim to strengthen public financial management by establishing financial reporting practices for governments and other public sector entities.
Zimbabwe has set 31 December 2025 as the deadline for public sector entities to fully comply with IPSAS.
The deadline, as provided through Statutory Instrument 41 of 2019, establishes a framework for public entities to migrate to IPSAS and produce compliant financial statements.
The standards were developed by the International Public Sector Accounting Standards Board (IPSASB), which also issues sustainability reporting standards and provides guidance for non-mandatory reporting to enhance transparency and support sustainable development.
In an interview on the sidelines of the ninth edition of the Public Sector Convention in Bulawayo in September, IPSASB board member Mr Andrew van der Burgh said Zimbabwe was on track in the implementation of IPSAS.
“Zimbabwe is obviously busy with IPSAS implementation and adoption at the moment, and we celebrate their successes. It’s a really difficult journey; I think Zimbabwe has made some really good strides in that space,” he said.
“We are encouraging them that they are not alone in this journey; there are new structures we have put together as the IPSASB around our international application group and also the post-implementation reviews that we are taking.”
Mr Burgh said both the mechanics (the international application group and the post-implementation reviews) were good ways for Zimbabwe to ask the board for help to get extra guidance and support from IPSASB in terms of the implementation and use of the standards locally.
He said although Zimbabwe had set the target to be IPSAS compliant by 31 December 2025, not all entities are going to meet the goal although some good progress had been made towards achieving the target.
Online Reporter