Corporates told: ESG reporting will attract money for investments

Kampala, Uganda | THE INDEPENDENT | Business operators in Uganda are encouraged to consider environmental, social and governance aspects when compiling their annual financial statements in order to gain relevance before different stakeholders.

Annual financial reports are usually made for accountability to business owners, regulators and, increasingly, prospective investors in the company.

However, the Institute of Certified Public Accountants of Uganda (ICPAU) says that beyond the financial performance of the business, investors, financiers and the general public are getting more concerned about the Environmental, Social and Governance (ESG) impacts of businesses on their surroundings.

Charles Lutimba, the Director of Standards at ICPAU says that Uganda must walk with the rest of the world and, if possible, be a leader in integrated reporting in Africa.Lutimba was speaking at the launch of this year’s edition of the Financial Reports Awards also known as fiRe, on Tuesday.

The chosen theme for the awards this year is Promoting Excellence in Corporate Reporting: Disclosing ESG Performance and Progress, and according to Lutimba, the 2024 awards will consider how the entities are incorporating their dealing with the environment, the people around and tolerance to corruption.

CPA Lutimba says they are also encouraging companies to focus on communication so that the reports are easily understood by the targeted audience, especially investors and regulators.

The participating entities are those that will have closed the year by June 30 when entries will be open.

Stephen Ineget, the Chairperson of the FiRe Awards Committee, says that the 14th Awards are aimed at reviewing how far companies have gone in practising integrated reporting, which goes beyond the financial statements, and responding to other emerging issues.

Currently, Uganda and the world as a whole are more concerned about climate effects and how they tame them, the protection of human rights and the prevention of corruption.

CPA Ineget enterprises and investors have the responsibility of reversing the effects of climate change to avoid ongoing disasters like floods and others, and these are aspects the corporations should incorporate in their annual reports.

Given the recent developments in sustainability reporting, notably the introduction of global Sustainability reporting standards, ICPAU is committed to recognising the impact of the now streamlined sustainability reporting on the users of the annual reports.

The ESG reporting is in the long run, expected to increase Uganda’s attractiveness to international investors.

Peter Kwagala, the Business Development Manager at Uganda Securities Exchange, says much as the country’s public and private sectors may be faced with declining sources of external financing, there is a lot of finances targeting projects aligned with ESG.

Among other benefits, participating entities have the opportunity to benchmark their annual reports with up-to-date financial reporting requirements, receive recognition for excellence in financial reporting, and receive expert feedback on the annual report’s strengths and weaknesses, at no cost.

Over 1,000 organisations have been impacted since the inception of the FiRe Awards.

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