Speaker Summary: Mumbi Maria Wachira

28 Jun 2023


Dr Mumbi Maria Wachira, an academic from Strathmore University Business School in Nairobi, shared her insights regarding the complex context of ESG (Environmental, Social, and Governance) considerations in Africa. The central themes include the contextual nature of ESG, where the social aspect is a priority and framed under a just transition. There is an acknowledgement that financial institutions are driving ESG movement in Africa, and also a recognition of the need to adapt international ESG frameworks to the local context to be effective. 

Key Takeaways

  • Africa boasts opportunities in climate finance and impact investing. Despite the complex public sector landscape, weak corporate governance structures and a lack of transparency; the region’s young workforce, SMEs and start-ups are profitably pursuing social and environmental impact, and creating investment opportunities. This is evidenced by success stories in many African countries including Kenya, Nigeria, and Ghana.
  • ESG topics are context-specific in Africa. The social dimension of ESG, in particular issues relating to diversity, ethics, anti-corruption and financial inclusion, takes precedence due to existing and ongoing challenges. At the board level, the inclusion of women and people with black heritage is scrutinised. Disclosure of board composition is mandatory in some countries including South Africa.
  • ‘People talk about net zero, but for us, it’s about a just transition’. In Africa, the just transition is an important concept that companies and governments need to incorporate as a key aspect of their sustainability strategy. Simply aiming to reach net zero is not enough. For example, social and economic implications of the shift from coal to renewable energy, such as the displacement of communities, need to be addressed, whilst simultaneously ensuring energy access for 600 million people who currently lack it.
  • The financial sector is driving ESG and helping to address issues like greenwashing and a lack of high-quality data. There is a need to adapt ESG frameworks to the local context, particularly where limited resources and expertise may hinder the development of actionable ESG strategies. Collaboration and knowledge exchange between financial institutions and businesses is helping to address these gaps. For example, a collaboration between the Kenya Bankers Association and local stakeholders intends to help businesses to manage the complexities of TCFD-aligned disclosure, as reports scrutinised by the Central Bank of Kenya are sometimes rejected due to quality and accuracy issues.
  • A pragmatic approach to upskilling board directors on sustainability topics could help to establish effective governance structures. It is essential that board directors have the skills to manage ESG, for example, by developing an understanding of reporting frameworks – like those of the Global Reporting Initiative (GRI) and the TCFD – and how they can be applied to the specific African, and local economy, context.


Africa’s approach to ESG and green growth is intricately tied to the concept of a just transition, expanding action beyond a narrow focus on net-zero targets. This stems from the acknowledgement that addressing climate change raises particular challenges for social justice. Consequently, it is important to tailor international ESG frameworks to accommodate the region’s distinct needs and opportunities. The financial sector in Africa is taking progressive steps in ESG and climate reporting, underscoring the need for businesses and their boards to be equipped with the expertise needed to establish robust sustainability governance structures.


Dr. Mumbi Maria Wachira – Strathmore University Business School

PRME Chapter Africa | UNPRME

financing_a_just_transition_in_africa-challenges_and_opportunities_final_1_2.pdf (afdb.org)