IFC, Trio Partner to Develop ESG Code, Guidelines for Private Sector

IFC, a World Bank’s private sector arm, partnered with three Ethiopian institutions to develop the country’s first environmental, social, and governance (ESG) code conducts and sector-specific guidelines.

The IFC disclosed its partnership agreements with the Accounting and Auditing Board of Ethiopia, the Addis Chamber, and the Ethiopian Bankers Association.

The announcement was made by IFC on Thursday while launching a new Integrated ESG program to boost sustainable business growth and private sector investment.

“Sustainability is critical for companies, their customers, surrounding communities, broader stakeholders, and the environment,” IFC’s Country Manager Madalo Minofu argued.

“Strong ESG practices and regulations are crucial to supporting the development of stronger, more sustainable businesses, and creating more jobs and opportunities in Ethiopia,” Minofu said.

The newly launched integrated ESG program will work with private sector actors to better understand and adopt ESG standards and codes of conduct.

It will also support banking and financial market regulators, including the Central Bank and the Ethiopian Stock Exchange, to improve their capacity to integrate, monitor, and enforce ESG requirements.

Currently, there are limited ESG requirements for the financial sector.

With the imminent launch of the Ethiopian Stock Exchange next year, ESG reporting will be a key consideration for companies looking to list.

Ethiopian Capital Market Authority Director General Brook Taye said the Integrated ESG program would help “us prepare companies in Ethiopia for sustainable and inclusive growth”.

“The program will be instrumental in understanding and addressing current gaps in ESG practices and is poised to play a pivotal role in shaping the future landscape of Ethiopia’s capital market,” he added.

The ESG program’s main focus will be on the banking, manufacturing, and agribusiness sectors – on which, IFC says, it has invested more than $105 million over the past five years.