Africa Economic Brief - The role of ESG rating in sustainable development in Africa - Volume 12 | Issue 10

This brief advocates for the use of Environmental, Social, and Governance (ESG) performance measurement and disclosure in supporting sustainable development in Africa. The following discussion emphasizes the increasing importance of ESG information as a driver of investment and development policy decision making. It points out that the pursuit of sustainable development—and recovery from COVID-19— will task the ability of Africa’s development partners to attract and deploy finance in a sustainability principled manner. It argues that while global sustainable finance is budding, the continent’s opportunities can be enhanced by environmental and social performance measurement and disclosure initiatives that guide investors by identifying good and bad performers. Finally, the paper recommends a framework for such ESG rating initiatives in the continent.