Oracle finance director for Sub Saharan and South Africa Dorothy Sagwe, MTN Rwanda CFO Dunstan Stober, Zep Re CFO Dr Rachael Gitonga, and Dolphin Professional Services CFO Noel Ngonyani offer insights into the challenges and opportunities they have encountered in aligning financial strategy with sustainability goals, highlighting how CFOs can adopt environmental, social, and governance (ESG) principles for long-term profitability.
At the ongoing 29th UN annual conference on climate change (COP29) in Azerbaijan, world leaders have been engaged in talks about how to address the urgent need for climate adaptation. Closer to home, finance leaders have also been mulling over ways to balance economic growth with environmental sustainability.
For acting MTN Rwanda CFO Dunstan Stober, cash is king. He advises CFOs to understand the financial implications of being environmentally and socially responsible as they align their organisation’s financial strategy with their sustainability plans. To this end, he urges CFOs to move beyond the traditional role of managing cash and play an active role in developing and executing strategy. This, he says, is key to fulfilling social and environmental responsibilities.
“Whether you want to be environmentally friendly, socially responsible, or a good development partner to the government, you have to fund all those things. The CFO's role, therefore, is understanding, let’s say, how our oversight of capital allocation in the business world supports this agenda? So for example, something as simple as if you're working with the guys in technology, when we are looking at our network rollout, as a CFO, whether they are planning a network that supports the environmental agenda you are working towards. Are we controlling oil spillage in our sites? Are we looking at our emission targets?” he said.
Oracle finance director for Sub Saharan and South Africa Dorothy Sagwe holds similar sentiments. According to Dorothy, finance leaders must understand and define sustainability within their organisations and assess how stakeholders across their value chains align with their sustainability goals. Dorothy urges C-suite executives to take the lead in ensuring good corporate governance at all levels of the organisation, saying it is crucial for business sustainability.
“I serve on a number of boards and these conversations come up. You might find yourself starting to ask your suppliers to mould their operations in a certain way that guarantees your own sustainability. I saw an article during COVID that went into much more detail on how to do an ESG test for your organisation. And I was surprised that it went down to customers, suppliers, government, and the company at the centre,” Dorothy said.
Community welfare
In incorporating sustainability into financial strategy and business operations, businesses are often faced with the question of ensuring the well-being of the communities in which they operate. Zep Re CFO Dr Rachael Gitonga poses the question: are the products enhancing people’s lives? The company has been using satellite imagery to collect data about climate patterns, a key component of its drought risk protection products, which are geared toward pastoralist communities in the region. Rachael views long-term community welfare as an integral part of an organisation’s long-term success.
“Today as we grow our business, we are thinking not just about the growth of the business, but also about what is happening to the communities that are our stakeholders. What are we saying about their livelihoods? What are we saying about the core of human life and livelihoods themselves in our business today? In the Horn of Africa, the remotest parts of Africa with pastures, these are communities where you want to be able to promote the households, help the women, youth, and children in those communities, and support those households so that children can be able to go out and get an education and come back home and find food,” she said.
At the same time, some finance leaders are leveraging ESG principles to generate capital. Since his appointment as CFO in October 2024, Dolphin Professional Services finance lead Noel Ngonyani has been researching ESG, which he considers important for securing cost-effective financing and boosting the company's credibility in international financial markets. He is keen to align the organisation’s strategy with global standards to retain a competitive edge.
“For Africa, ESG is still developing, but it’s a big deal. The main thing I want to focus on now is implementing it for the company. We need to integrate it into our company strategy. The problem in Africa is that loans are extremely expensive. If we want to compete internationally, we need to be part of the global financial architecture, and ESG is a part of that,” he said.
Despite his optimism, Noel has faced the challenge of measuring the outcome of initiatives geared towards sustainability in the absence of a universal standard.
“The key thing now is establishing a methodology. It is difficult to create benchmarks for things like measuring carbon emissions or defining eco-friendliness. What level of social contribution is considered significant? How do you measure it? Is there a comparative report that positions you against other industries?” he explained.
