Environmental and Social Governance (ESG) activities have their roots from the implementation and commitment by countries from Kyoto Protocol, The Paris Agreement, the United Nations climate finance Conference (Cop29) in Abjan, the United Nations Framework Convention on Climate Change (UNFCCC) and the European Union (EU) traceability requirement which have put cooperators on the spot when it comes to saving the planet. Climate change has become a global concern and it is a shared responsibility for cooperatives to promote sustainable practices. Zero net carbon, creating green organizations and communities should be a crucial agenda for cooperative leaders in 2025. Fostering community engagements, and ensuring ethical governance practices is what Cooperatives must stand for. The fact that least developed economies are considered as low emitters or degraders, but they are mostly affected by climate change compared to the highly developed economies is the main cause for this synopsis.
Environmental Aspect; Cooperatives must re-engineer their environmental Sustainability Initiatives by implementing renewable energy solutions such as solar energy or wind energy to reduce carbon emissions and reliance on non-renewable resources. By adopting energy-efficient practices in their operations and facilities, including production, lighting, heating, and cooling systems, promoting waste reduction and recycling programs within the operational systems and among their member activities, supporting sustainable agriculture practicessuch as organic farming methods or agroforestry is promising in reducing carbon emission. Cooperatives should focus on social responsibility programs by investing in community development projects such as affordable housing initiatives, education programs and creating awareness about dangers of climate change, they should develop financial products with incentives to promote investment in water, health, sanitation, green finance,smart agriculture and tree planting. Promote the no harm rule!
Social Aspect; To create equal opportunities and employment tovenerable groups like women, youth and the disabled personsbut also to provide fair wages and benefits to employees. Cooperatives must address income and gender inequalities andthus the financial cooperatives (SACCOs) should prioritize the excluded and unbanked communities for financial inclusion and they should further engage in philanthropic activities such as donating a portion of their surplus to charitable causes or disaster relief efforts. Do not leave any body behind!
Governance Aspect; Cooperatives must ensure governance practices by adhering to transparency and accountability in decision-making processes, Support clear communication channels between management and members, establish diversity and inclusive governance structures that reflect the interests and perspectives of all members, promote gender inclusivity and uplift marginalized groups, adhere to ethical business practices and regulatory compliance standards including anti-corruption measures and fair-trade principles. To conduct regularassessments and audits to evaluate the cooperative’s performance in relation to ESG objectives and identify areas for improvement. To promote member engagement and education by building capacity of members in regard to the importance of ESG principles and encouraging their participation in relevant initiatives and activities by providing training and resources to help them adopt sustainable practices in their own operations. To Solicit feedback from members on ESG priorities and incorporating their input into strategic planning processes and should promote stakeholder collaboration by partnering withother cooperatives, NGOs, government agencies, and industry partners to address common environmental and social challenges. To participate in industry-wide initiatives and sustainability networks to share best practices, research findings, resources and engaging with investors and financial institutions that prioritize ESG criteria to access patient and impactful capital for long-term growth. When we walk together, we reach far!
ESG is impact driven; Cooperatives as collective enterprises which are owned and governed by their members have a unique opportunity to prioritize environmental and social governance (ESG) initiatives and this is because cooperative principles andvalues are aligned with the ESG agenda. Enhanced reputation and trust are key while embracing ESG as it promotes thereputation of cooperatives among consumers, investors, and communities because they are being seen as responsible stewards for protecting the planet and contributing to social well-being which builds a goodwill. Investors are increasingly considering ESG factors when making investment decisions and when cooperatives prioritize ESG, it may attract a wider pool of investors for access to patient and impactful capital more easily. ESG considerations promote long-term sustainability by ensuring that cooperatives operate in a way that preserves natural resources, minimizes negative social impacts, and fosters resilience to external challenges. In competitive markets, prioritizing ESG can differentiate cooperatives from other businesses as consumers are increasingly seeking products and services from companies that demonstrate environmental and social responsibility and thus giving cooperatives a competitive edge. ESG regulations are becoming more stringent globally and by proactively embracing ESG principles, cooperatives can ensure compliance with existing and future regulations, avoiding legal and financial penalties. Emphasizing environmental and social responsibility can enhance employee satisfaction and engagement where by employees are often proud to work for organizations that prioritize ESG leading to higher morale and productivity. Promoting global Citizenship as Cooperativesoperate within a broader global context and embracing ESG reflects a commitment to being responsible global citizens.
Finally, embracing environmental and social governance is aligned to the 17 United Nations (UN) Sustainable Development Goals, Africa Agenda 2063, East African Community Agenda 2050 and Uganda Vision 2040. The core values of cooperativeswhich enhance their reputation and trust, mitigate social risks, attracts capital, promote long-term sustainability, differentiate them in the market place, ensures regulatory compliance, boostsdiversity in employment, contributes to community development, and demonstrates global citizenship. By integrating ESG activities into their operations, cooperatives can demonstrate their commitment to responsible business practices, build trust and loyalty among members and stakeholders, and contribute to the sustainable development of their communities and the broader green economy. We are the first generation to feel the full effects of climate change, and the last generation that can do some thing about it -Brack Obama.
To join a Society for Environmental and Climate Finance Professionals; WhatsApp +256 777 222 732.
Denis Tukahikaho holds a PhD in environmental Management & Economics, he is a PhD student in International Relations and Diplomacy – AI University Hawaii USA, holds a Master of law Energy & Policy, Executive MBA, Bachelors of Business Administration (Banking & Finance) and Diploma in business Management and Economics.
