Sustainability reporting must be incentivized in Kenya to encourage adoption

I recently attended a workshop organized by Strathmore Business School in collaboration with Maastricht school of management whose main agenda was to discuss ways in which they could create a link of their training programs to impact investment in Kenya.

Impact investment is based on the premise of capital investment made with the intention of not only getting a return on investment but also have an active measurable positive social and environmental impact. It is believed that Impact investment has very close correlations with SDGs.

The focus of the discussion centered on the fact that there is this huge pool of funds conservatively estimated by the Global Impact Investment network to stand at USD 78 Billion held by impact investors such as foundations, pension funds, governments among many more that is not being accessed by social enterprises in Africa. Actually only one percent of total applications get funded yet we have many social enterprises doing fantastic work and direly need such funding to scale.

While relying on Impact Investors to provide funding for sustainability may seem like a good idea in the short to medium term I reckon that the discussion needs to be more inclusive to include private sector business, SMEs and government whose activities affect the social sphere and environment.

Currently most companies and organizations have corporate social responsibility as a department or program that ill attempt to give back to society by taking a small portion of its profit and channeling it to a selected project as part of its contribution to society. The CSR model is sub optimal due to the fact that the value that these companies take from society is much greater vis a vis the value they give back in terms of CSR. To address this; companies should be encouraged to adopt sustainability reporting which encourages greater organizational transparency through standardized reporting of their impact to society.

Sustainability reporting developed by the Global reporting initiative is a framework that sets out the  Principles and Indicators organizations can use to report their economic, environmental, and social performance. The GRI is a great tool for companies and organizations to help in achieving the SDGs.

To date say for a few companies in Kenya such as Safaricom, SGS Kenya and KCB very few companies have adopted sustainability reporting as part of its core annual reports. This is part contributed by lack of incentives and that it’s not a legal requirement.

Incentives such as an Award system for best organization in sustainability reporting, tax breaks and many others could provide the much needed push for adoption of sustainability reporting and create the sort of radical positive impact that is needed especially in Africa where effects of climate change are obvious, gender inequality and human rights violation is rampant .

https://viffaconsult.co.ke/sustainability-reporting-must-be-incentivized-in-kenya-to-encourage-adoption/