Integrate ESG in planning and operations

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

While some companies and governments have embraced ESG principles, the majority still lag behind either, because they are unaware of the impact of their sustainability efforts or simply focus on profit at the expense of society or communities.

Some ministries, departments and agencies (MDAs) in Uganda have made commendable efforts in mainstreaming ESG, but for other entities, these wins are left in the general operations pool and could easily be overlooked. It is crucial, therefore, that ESG principles are not just acknowledged but are integrated, implemented by user departments, monitored, and effectively reported on across all government MDAs.

The environmental marker addresses greenhouse gas emissions, carbon footprint, waste management, water use, among other things; 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 governance arm spotlights oversight and compliance policies, etc.

One of the government agencies championing ESG integration in its business processes is National Medical Stores (NMS). In order to harness natural resource utilisation, the NMS warehouse and office complex in Kajjansi was built as a green building with solar as the first line of power supply.

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

Furthermore, the NMS warehouse has an on-site sewage treatment plant that processes human waste. Waste is collected in a tank where it settles before being pumped into the treatment process, the purified water is then utilised for irrigation and other non-potable purposes, which conserves water and the environment.

More efforts are being re-engineered in other departments, including communal transport 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 is about re-engineering operations to be more sustainable and efficient.

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

Moreover, for the broader government, ESG could affect a country’s cost of borrowing and credit rating if not well implemented.

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

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

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

Ms Sheilla Nduhukire, Principal Public Relations Officer, National Medical Stores.
[email protected]