Businesses Urged to Embrace ESG for Sustainable and Resilient Future

Businesses have been encouraged to embrace Environmental Sustainability Governance (ESG) practices, which are more than a regulatory requirement but a strategic move towards enduring sustainability and resilience in a dynamic business environment.

This call was made at the 7th Annual Bankers Conference, held under the theme: "Navigating the Future of Banking: ESG, Sustainability, and Digital Transformation."

The conference follows the recent launch of the banking industry's ESG framework, aimed at integrating ESG principles and sustainability into the operations of supervised financial institutions in the country.

Speaking at the conference, PostBank Uganda Managing Director and Uganda Bankers Association (UBA) Chairman, Julius Kakeeto, encouraged entities to embrace ESG, emphasizing its importance for a resilient and sustainable financial future.

“The regulatory landscape is rapidly evolving to support the accelerated shift towards a sustainable future and manage the challenges this presents. Thus, embracing ESG is now more than a regulatory requirement but rather a strategic move towards enduring sustainability and resilience in a dynamic business environment,” Kakeeto said.

He further highlighted, “Uganda provides a compelling illustration of ESG integration with the National Development Plan (NDP III) incorporating commitments to regional and international development frameworks, including ESG. The second Nationally Determined Contribution (NDC) outlines ambitious targets, aligned with national policies like Vision 2040 and the National Climate Change Act of 2021.”

The 2024 UBA conference aimed to:

1. Brief stakeholders on the banking and financial sector's position on ESG and sustainability and its application in customer and business operations and relations.
2. Demonstrate and ensure the industry ESG framework and sustainability strategies align with the national climate strategy and sustainability agenda/goals.
3. Share lessons learned in the ESG journey from other jurisdictions, including risks, challenges, regulatory frameworks, and success stories.
4. Promote sustainable finance initiatives by focusing on technology as an enabler in the ESG journey and the energy sector's multiplier role.
5. Position the banking and financial sector in Uganda to attract more collaboration and partnerships in promoting and delivering ESG and sustainability objectives.

Bank of Uganda's Executive Director of the Bank Supervision Directorate, Tumubweine Twinemanzi, reaffirmed the Bank's support towards the banking sector.

He noted, "Bank of Uganda, working with UBA, established an industry ESG framework that was rolled out two weeks ago. Unlike other countries, in Uganda, the Central Bank approached the ESG agenda differently by allowing the banking industry to be at the forefront of the framework, and as the regulator, we followed. I believe, in addition to the guidelines we have in place, that business operators can adopt ESG while conducting business."

The Permanent Secretary and Secretary to the Treasury, Ministry of Finance, Ramathan Ggoobi, affirmed that Uganda’s economy is safe and growing at a good rate of 6%, revealing that it has recovered from various shocks over the last five years. He mentioned that the Ministry has a good plan for accelerating economic growth.

Commenting on the ESG move, Ggoobi stressed the government’s commitment to climate change adaptation and mitigation with several policies in place to support this agenda.

“Financial institutions occupy a pivotal position in addressing ESG risks because they can direct capital towards transformative investments and projects that are sustainable and bring about inclusivity coupled with positive environmental and social impact. Thus, we must fully integrate ESG principles into our business practices for a sustainable business environment,” Kakeeto concluded.