ESG in practice across Africa’s real estate market

As ESG takes shape in the world over, real estate players across the continent are taking critical steps to ensure its adoption in the real estate sector. In the article below, we highlight 3 key ways in which each ESG component is being actualized. 

1. 1. Environmental 

The Green Building Bare Minimum

As ESG continues to garner momentum, the number of ESG regulations affecting property owners has continued to rise. For example, Kenya’s proposed building code mandates all commercial buildings to provide for a green space through the incorporation of a rooftop, balcony or vertical garden in instances of a 100% plot coverage.  Furthermore, in Rwanda, the Rwanda Green Building Minimum Compliance makes it mandatory for buildings occupied by more than 100 people to have a green component as the country pursues a green approach to economic transformation. Interestingly, these requirements are not only being adopted at a national level but also at a city or municipality level. This can be evidenced by the recent initiative by the city of Takoradi to introduce a 30% discount on the permit fees and an expedited permitting for green certified projects within the metropolis. 

As such, there has been an influx of green developments across the continent. Below, we highlight some of the key green developments across Africa

2. Social

Rising Demographics across the continent are driving up the need for impact investment

As the continent’s urbanisation rates and population continues to rise, the need for impact investing can no longer be ignored. The Global Impact Investing Network describes impact investing as investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. 

In reporting their overall impact, developments such as Cosmos Yopougon have noted that the retail development has resulted in over 750 jobs and impacted the over 80% of local businesses that they work with. This development has also had a ripple impact on the surrounding economy resulting in over 100 businesses strategically relocating in close proximity to the mall. 

On the other hand, CDC noted that its investments in Africa Logistics Park in Kenya has so far contributed to over 355 direct tenant jobs and thousands of suppliers with a reach of over 1 million consumers directly impacting Kenya’s economy.

With the need for holistic approach now greater than ever, companies investing in Africa are set to take impact investing to even greater heights moving forward.

3. Governance

Corporate Social Responsibility remains the guiding principle for good governance across Africa

In the journey to ESG adherence, Corporate Social responsibility is emerging as a key way to reflect businesses brand values and ethos while building operational resilience. A key initiative for the majority of developers has been through capacity building. Already developers such as Gateway Real Estate in Nairobi have donated approximately US$40,000 in Nairobi for the Buildher Kenya initiative – a women focused building and construction entity that focuses on training them at a higher skill level and making them easily fit in the local construction industry.

Additionally, Warehousing and Logistics Developer –   Agility  Logistics developers has consistently run vocational trainings across countries such as Ghana in a bid to ensure skills transfer in the warehousing sector. For example in collaboration with Oiada international, Agility launched a vocational training program in Ghana to provide free vocational and technical training to 180 local young adults in electrical work, brickmaking, and basic IT and computer skills.

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