2024-01-10 10:26:48
Par BEN BOUBAKER Cannon* et Emmanuel MILLARD*
The “CSRD” (or “Corporate Sustainability Reporting Directive” of December 14, 2022, the provisions of which come into force from January 1, 2024 for companies subject to the Dpef) is of capital importance for African companies. Although the directive is directly applicable to European companies, it has significant repercussions on African companies, requiring them to put themselves in working order to maintain their commercial positions and relationships. This is undoubtedly a major strategic opportunity to strengthen sustainability, reputation and access to global markets.
A cross-border impact on African businesses
From 2024, the Csrd involves the establishment of transversal and thematic standards. Although extra-financial reporting is not yet an obligation in the majority of African countries, initiatives and awareness-raising actions have been taken in certain countries to encourage the adoption of a CSR (“Corporate Social Responsibility”) approach. ).
In Africa, there is a crucial link between the implementation of extra-financial reporting and preparation for the Csrd. Compliance with the Csrd requires African companies to familiarize themselves with reporting standards similar to those of the European directive. It is essential to share the CSRD experiences of European companies and to highlight the associated benefits and risks.
In order to preserve their commercial links, African companies must anticipate future requirements to guarantee their compliance, maintain or develop strategic partnerships in Europe. By preparing for this, these companies will improve their overall performance.
How should African businesses prepare for the impending challenges?
To remain competitive and maintain essential commercial links with Europe, representing more than a quarter of their trade, African companies must develop their management tools and data systems to assess performance in environmental, societal and governance matters.
Lack of dedicated structures for data collection, technical gaps in reporting, limited financial resources for the adoption of green technologies and varied perceptions of sustainability are all constraints.
To overcome them, solutions include the establishment of strategic partnerships with European entities, the promotion of good practices, significant investments in training and the development of ESG skills. African businesses might foster the creation of a resilient local ecosystem, conducive to sustainability and regulatory alignment, allowing them to actively prepare for the growing demands of the international market.
African governments have a role to play
By integrating the dual materiality matrix into their strategy and adopting a proactive approach focused on measuring and managing their sustainability and compliance impact, African businesses will respond to growing demands for transparency and accountability, thereby strengthening their European and international credibility and attractiveness.
African governments have a key role to play in developing regulatory frameworks supporting the transition to sustainable practices, likely including financial incentives and training programs. Public-private partnerships (“PPPs”) support companies towards compliance with the CSRD.
Although extra-financial reporting is not obligatory in most African countries, its voluntary implementation might serve to integrate African companies into the global dynamic. This proactive approach can stimulate their long-term growth.
With a European market share towards Africa of only 2.2%, Europe exerts indirect pressure on African companies.
The adoption of these practices is more than a regulatory necessity, it is a potential vector of growth and competitiveness that can transform the challenges of the Csrd into strategic and competitive advantages for African companies, thus aligning their operations with the objectives of sustainable development and the requirements of a global economy attentive to sustainability.
M.B.B.
Vice-president Icfoa and vice-president Cogeref Et
E.M.
Secretary General Endrix Group, President ICFOA, Vice-President Sorbonne Business School andhonorary president DFCG
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