Environmental, Social, and Governance (ESG) Status in Sub-Saharan Africa: Status and Required Conditions for Firm Engagement

Aladino José Manhiça

Chapter 14 in The Competitiveness of Nations 2:Government Policies and Business Strategies for Environmental, Social, and Governance (ESG), 2023, pp 313-331 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Firm shareholders are becoming more conscious and compliant with Environmental, Social, and Governance (ESG) issues as the significance of corporate social responsibility (CSR) is growing. For some firms, the ESG footprint serves as a tool to gain a competitive strategic advantage within an existing legal framework. Still, other firms simply perceive ESG activities as philanthropic activities. Hence, to what extent each firm will engage in ESG activities is largely determined by the collective and structural arrangements of the country or society. In this regard, several reviews have raised the importance of legal frameworks to boost ESG performance. Despite the considerable literature, they only recommend the enhancement of governance to assure firm accountability and information disclosure on ESG. However, most of these assumptions are based on high-income countries where social hardship is less of a challenge. Moreover, only limited research discusses the concept of creating shared value (CSV) within the 2030 Agenda of Sustainable Development Goals (SDG). The object of this chapter is to explore the required conditions to motivate more firms to engage in ESG affairs in the Sub-Saharan Africa (SSA) region. As our study points out, environmental issues are not a core objective for SSA Governments as of now. This shows that social hardship and regulation gaps are influential factors for business competitiveness and government policy adjustment toward ESG arrangements.

Keywords: National Competitiveness; Government Policy; Business Environment; Firm Strategy; Locational Advantage; Competitive Advantage; International Business; Russia-Ukraine War; Environmental; Social; and Governance (ESG); Corporate Social Responsibility (CSR); Corporate Social Opportunity (CSO); Creating Shared Value (CSV) (search for similar items in EconPapers)
JEL-codes: F1 F13 F23 (search for similar items in EconPapers)
Date: 2023
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