ESG stands for environmental, social and governance. It is a way of looking at how a company manages the risks and opportunities that sit outside the traditional balance sheet: its use of energy, water and land; its relationships with employees, suppliers and communities; and the quality of its leadership, controls and ethics.
The three pillars
- Environmental: emissions, energy and water use, waste, biodiversity and climate-related risk.
- Social: workplace safety, fair employment, human rights, community relations and local supply chains.
- Governance: board oversight, anti-corruption, transparency, data protection and risk management.
Why it matters in Tanzania
Companies of every size are being asked ESG questions: by development finance institutions and commercial banks assessing loans, by international buyers screening their supply chains, by investors comparing opportunities, and by communities living alongside operations. At the same time, national environmental and social requirements, such as environmental impact assessment under the Environmental Management Act, continue to apply to many projects.
Good ESG practice is not a reporting exercise. It is a way of running a business that is better prepared for risk and better positioned for opportunity.
Where to start
You do not need a large team or a 100-page report to begin. A sensible first step is a short materiality assessment: identify the handful of ESG topics that matter most to your business and your stakeholders, set a baseline, and agree a few measurable targets. Reporting and assurance can follow once the foundations are in place.
