Integrate ESG into planning and operations

Introduced 18 years ago by the United Nations to encourage responsible investment, the Environmental, Social and Governance (ESG) concept has largely remained on the shelves of private and government agencies worldwide.

While some companies and governments have embraced ESG principles, most are still lagging behind, either unaware of the impact of their sustainability efforts or simply focusing on profits at the expense of society or communities.

Some Ministries, Departments and Agencies (MDAs) in Uganda have made laudable efforts to mainstream ESG, but for other entities, these victories remain in the overall operational mix and could easily be overlooked. It is therefore crucial that ESG principles are not only recognized, but integrated, implemented by user departments, monitored and effectively reported to all government MDAs.

The environmental marker addresses greenhouse gas emissions, the carbon footprint, waste management, water use, among others; The social aspect, on the other hand, focuses on areas including but not limited to health and safety, gender equity, supply chain management; while the government arm highlights oversight and compliance policies, etc.

One of the government agencies that advocates ESG integration in its business processes is National Medical Stores (NMS). In order to leverage the use of natural resources, the NMS office and warehouse complex in Kajjansi was built as a green building with solar energy as the first line of power.

Our solar system currently has a capacity of 500 KVA out of the required 600 KVA, which means that 80 percent of NMS’s energy needs are met from renewable energy resources, resulting in an impressive reduction in 60 percent of NMS’s total energy bills and reliance on non-renewable energy.

In addition, the NMS warehouse has an on-site wastewater treatment plant that processes human waste. The waste is collected in a tank where it settles before being pumped to the treatment process, the purified water is then used for irrigation and other non-potable purposes, which conserves water and the environment.

More efforts are being redesigned in other departments, including community transportation for staff to reduce carbon emissions, among other initiatives.

The ESG integration steps NMS has taken so far highlight that ESG is not just about compliance or corporate responsibility; it’s about re-engineering operations to make them more sustainable and efficient.

So why should other MDAs care about this apparently “new” elephant in the room? ESG is a social contract to protect people, society and the environment. It is a commitment to safeguarding the three core constituencies at the heart of any business. Strict adherence to health and safety, gender equity, waste management, use of renewable energy, among others, has far-reaching positive consequences not only for the brand of the government/organization, but also for the overall efficiency of any entity.

Also, for the government in general, ESG could affect the cost of borrowing and a country’s credit rating if not implemented properly.

ESG integration will have challenges. Some obstacles may include changes in management, insufficient budgets, gaps in stakeholder engagement, clear reporting frameworks, greenwashing, and failure to adequately define and quantify ESG risks.

Therefore, anticipating, mitigating and addressing the risks associated with ESG implementation will absorb the shocks and frustrations that may arise during the integration process.

With government agencies like NMS leading the way in ESG mainstreaming, more MDAs are encouraged to adopt similar practices, ultimately contributing to a resilient and sustainable future for Uganda.

Ms Sheilla Nduhukire, Senior Public Relations Officer, National Medical Stores.
(email protected)