Environmental, Social, and Governance (ESG) Practices

At Reagan Blankfein Gates Legal Practitioners (RBGLP), we understand the increasing importance of Environmental, Social, and Governance (ESG) practices in shaping sustainable and responsible business operations. In Zambia, the integration of ESG principles is gaining momentum, influencing corporate behaviour and investment decisions.

Understanding ESG Practices

ESG encompasses three critical dimensions:

• Environmental: Focuses on a company’s impact on the natural environment, including resource consumption, waste management, and efforts to mitigate climate change.
• Social: Addresses relationships with employees, suppliers, customers, and communities, emphasizing labour standards, diversity, and community engagement.
• Governance: Pertains to corporate leadership, ethical conduct, transparency, and compliance with laws and regulations.

ESG Landscape in Zambia

While Zambia lacks a unified legislative framework dedicated solely to ESG, various laws and guidelines address components of ESG:

• Environmental Regulations:
• Environmental Management Act No. 12 of 2011: Establishes a framework for environmental protection and management.
• Environmental Protection and Pollution Control (Environmental Impact Assessment) Regulations SI No. 28 of 1997: Mandates environmental impact assessments for certain projects.

• Social Regulations:
• Employment Code Act No. 3 of 2019: Governs employment relationships and workplace conditions.
• Occupational Health and Safety Act No. 36 of 2010: Mandates the establishment of health and safety committees in workplaces.

• Governance Regulations:
• Companies Act No. 10 of 2017: Prioritises transparency and governance standards, delineating roles of company secretaries and directors.
• Securities Act No. 41 of 2016: Imposes disclosure obligations on publicly listed companies.
• Lusaka Stock Exchange (LuSE) Code of Corporate Governance: Introduces voluntary sustainability requirements for listed companies.

These regulations collectively contribute to the broader ESG framework in Zambia.

Recent Developments

The Zambian government has demonstrated a commitment to integrating ESG principles into national policies:

• 2024 National Budget: Emphasises environmental sustainability, social inclusion, and good governance, reflecting an ESG-oriented approach to development.
• Green Loans Guidelines: Introduced to promote sustainable development by facilitating financing for projects addressing climate change, biodiversity loss, and land degradation.

Sector-Specific ESG Considerations

In sectors like mining, ESG considerations are particularly critical:

• Environmental: Regulations mandate environmental impact assessments and sustainable resource management.
• Social: Focus on community engagement, fair labour practices, and health and safety standards.
• Governance: Emphasis on transparency, ethical conduct, and compliance with legal standards.

Companies are increasingly adopting ESG practices to meet investor expectations and regulatory requirements.

RBGLP’s Role in ESG Integration

At RBGLP, we offer comprehensive legal services to assist clients in integrating ESG principles into their operations:

• Regulatory Compliance: Guiding clients through the complex landscape of ESG-related regulations to ensure adherence and avoid legal pitfalls.
• Policy Development: Assisting in the creation of internal policies that reflect ESG commitments and promote sustainable practices.
• Training and Capacity Building: Providing training sessions to enhance understanding and implementation of ESG principles within organizations.
• Reporting and Disclosure: Advising on best practices for ESG reporting to meet stakeholder expectations and regulatory requirements.

Conclusion

The integration of ESG practices is essential for sustainable business operations and long-term success. RBGLP is dedicated to supporting clients in navigating the evolving ESG landscape in Zambia, ensuring that they are well-positioned to meet regulatory requirements and stakeholder expectations.