Staff Writer
The Public Accountants and Auditors Board (PAAB), the Zimbabwe Stock Exchange (ZSE), and the Victoria Falls Stock Exchange (VFEX) have announced mandatory sustainability reporting for all listed entities.
The mandate is in line with Statutory Instrument 134 of 2019 (Securities and Exchange (Zimbabwe Stock Exchange Listings Requirements) Rules, 2019), as well as ZSE Practice Note 16 and VFEX Practice Note 2.
This new requirement applies to financial years commencing on or after January 1, 2024.
Sustainability reporting is a form of non-financial reporting that enables companies to convey their progress toward goals on a variety of sustainability parameters, including environmental, social and governance metrics, as well as risks and impacts they may face, at the moment or in the future.
Sustainability reporting also helps companies communicate both positive and negative impacts of their actions on the environment, society as well as economy, and accordingly set priorities.
In the long term, sustainability reporting helps companies assess risks and opportunities and helps them drive green operations, align with CSR goals and increase cost saving opportunities.
According to the joint statement, listed companies are directed to prepare and submit their sustainability reports in accordance with section 399 of Statutory Instrument 134 of 2019, ZSE Practice Note 16, and VFEX Practice Note 2.
They emphasized that the sustainability reports should ensure “transparency, accountability, and the effective communication of sustainability-related information to stakeholders.”
The regulatory bodies emphasize the importance of these reports in providing a comprehensive overview of the entity’s environmental, social, and governance (ESG) performance.
This move signifies a growing focus on sustainability and responsible business practices within the Zimbabwean financial market.
While Zimbabwe has adopted the IFRS Sustainability Disclosure Standards issued by the International Sustainability Standards Board (ISSB) in November 2022, the PAAB has clarified that implementation of IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) is not yet mandatory.
This move signifies a growing focus on sustainability and responsible business practices within the Zimbabwean financial market.
While Zimbabwe has adopted the IFRS Sustainability Disclosure Standards issued by the International Sustainability Standards Board (ISSB) in November 2022, the PAAB has clarified that implementation of IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) is not yet mandatory.
In line with climate-related disclosures, Zimbabwe is believed to have the potential to become a regional leader in green finance, and with the right policies and incentives, the green bond market can play a crucial role in mobilising capital for sustainable development projects across the country.
Green bonds are specialised debt instruments designed to raise capital exclusively for projects that support sustainability, such as renewable energy, green buildings, and climate change adaptation.
