Africa Is Redefining ESG, Not Copying It
Western frameworks don't fit — and that's okay for purpose-driven sustainability.
I still remember a conversation I had with a European asset manager who was “curious” about sustainable investing in Africa. They asked if African firms were catching up yet. To me, it seemed as if they were implying that sustainability on the continent was somehow behind or not quite legitimate.
I took a deep breath and paused before answering. Not because I didn’t know what to say — but because I was trying to decide whether to be diplomatic or honest.
Let me go with honest here: Africa is not “behind” in sustainability. It’s just not copying the West. And that’s a good thing.
The Problem with Western ESG
The dominant ESG frameworks used by rating agencies, large institutional investors, and regulators were designed for a very specific context: public companies operating in relatively stable, high-income economies with rich data availability.
I’m not against that. My firm builds on many of these frameworks, and uses available data where it can.
The problem with these systems is that you can’t just copy-paste them to other geographical and economic contexts. When you do, you end up creating metrics that are completely blind to the lived reality of the Global South.
In Africa, ESG is often filtered through this imported lens — and it doesn't work. Projects that bring transformative social or environmental benefits to local communities can be shut out of funding because they don’t tick the right boxes. Meanwhile, extractive projects that learn to game ESG scores continue business as usual.
Many ESG scoring methodologies effectively penalize African economies simply for being where they are on the development curve. A lack of infrastructure becomes a liability rather than an opportunity for impact.
Instead of catalyzing change, ESG frameworks too often become gatekeepers for capital.
What’s Happening on the Ground
Here’s the thing: African markets aren’t waiting to be told what ESG means. They’re already shaping it in ways that are deeply local, deeply practical, and arguably more aligned with the original spirit of sustainable finance.
Take Kenya, where solar microgrid initiatives are not only decarbonizing rural communities but also creating local employment and financial inclusion. These aren’t add-ons to a clean tech project — they are core performance metrics.
Or Ghana’s work on community-managed forests, where local groups are integrated into governance models to preserve biodiversity while maintaining livelihoods. These models don’t neatly map onto ESG ratings, especially because social factors (the S in ESG) tend to be so severely underestimated in Western approaches. These forests, however, are so rich in real sustainability.
Nigeria’s mining investment strategy, backed by the Africa Finance Corporation, accounts for contextual impact — such as access to basic services and contribution to local economic resilience. These metrics might not show up on Bloomberg or MSCI dashboards, but they matter to the people on the ground.
And let’s not forget what the IFC documented in their report on ESG integration across Africa: there’s growing momentum toward practical, impact-first ESG. Many African firms are adopting governance and environmental standards, but adapting them to local realities — not just mimicking foreign norms.
Redefining, Not Copying
What’s emerging is not a “lite” version of ESG. Based on necessity rather than trend, Africa is redefining what sustainability means.
While ESG in Europe or the U.S. often becomes a performance of compliance — annual reports, assurance statements, investor comms — in many African contexts, it’s far more existential. It’s about building something that lasts. About avoiding climate collapse and making sure people have clean water, reliable transport, a functioning health system.
This isn’t to romanticize — there are plenty of greenwashing risks and accountability gaps both in the West and across Africa. But the potential is undeniable.
The best ESG models might not be found in the City of London or in a San Francisco VC fund. They might be quietly developing in Lusaka, Dakar, or Kigali — as bottom-up, community-driven responses to real problems.
Africa is redefining ESG by necessity. But perhaps this necessity is a gift. A chance to move beyond performative checklists and toward values-rooted sustainability that is practical, inclusive, and deeply future-oriented.
A Call to Curiosity
If you’re in sustainable finance and haven’t taken a serious look at how African institutions, funds, and communities are approaching ESG — now is the time. Not out of charity. Not out of solidarity. But out of sheer strategic intelligence.
ESG is going through a rough time in the West. Might it be that we’ve had our heads in the clouds for too long? On my end, at least, I’ve been feeling inspired by reading about—and, in some cases, having the honor to contribute to—frameworks that seem much more grounded in day-to-day reality.
In the West, we could learn something from this.
For all my fellow ESG practitioners: Maybe the answer isn’t in another G7 working group. Maybe it’s in a farming cooperative in Malawi. Or a climate adaptation project in Senegal. Or a cross-border infrastructure project that dares to build social equity into its core financial model. (I’ll go deeper into some examples on Thursday.)
Africa isn’t just participating in the ESG conversation. It’s rewriting the script from beginning to end.
The question is whether the rest of the world dares to listen.
Wangari’s Curated Reads
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frame the immediate market reaction through the lens of economic principles like Jevons Paradox, which describes how improvements in efficiency often increase total demand. DeepSeek's story is a powerful reminder that deep technical shifts can ripple outward into financial systems in surprising ways.
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