IFC formally launched a new program promoting environmental, social, and governance (ESG) best practices in Ethiopia, called the Integrated ESG program, which aims to boost sustainable business growth and private sector investment in the country with a focus on the banking, manufacturing, and agribusiness sectors.
The program—IFC's first focused on ESG in Ethiopia—will work with private sector actors to better understand and adopt ESG standards and codes of conduct. It will also support banking and financial market regulators, including the Central Bank of Ethiopia and the Ethiopian Stock Exchange, to improve their capacity to integrate, monitor and enforce ESG requirements. Currently, there are limited ESG requirements for the financial sector, and with the imminent launch of the Ethiopian Stock Exchange, ESG reporting will be a key consideration for companies looking to list.
As part of the program, IFC signed partnership agreements with the Accounting and Auditing Board of Ethiopia (AABE), the Addis Chamber of Commerce and Sectoral Association (AACCSA) and the Ethiopian Bankers Association (EBA) to develop Ethiopia's first ESG code and sector specific guidelines.
"Sustainability is critical for companies, their customers, surrounding communities, broader stakeholders, and the environment," said Madalo Minofu, IFC's Country Manager in Ethiopia. "Strong ESG practices and regulations are crucial to supporting the development of stronger, more sustainable businesses, and creating more jobs and opportunities in Ethiopia."
"The Integrated ESG program plays a key role in readying Ethiopian companies for sustainable and inclusive growth. The program will be instrumental in understanding and addressing current gaps in ESG practices and is poised to play a pivotal role in shaping the future landscape of Ethiopia's capital market," said Dr. Brook Taye, Director General of the Ethiopian Capital Market Authority.
IFC is a global leader in setting ESG standards for the private sector, including through its Performance Standards and other guidance materials and tools. IFC is also a Global Corporate Governance leader with a proven track record and a globally developed corporate governance methodology for assessment.
Over the past five years, IFC has invested and mobilized more than $105 million to support Ethiopia's agribusiness, manufacturing and financial sectors. IFC's priorities in the country focus on strengthening agribusiness value chains, supporting the growth of manufacturing, and increasing access to digital connectivity.