ESG is business decision, not just sustainability agenda
ESG is becoming a business decision, with CFOs playing a central role in turning sustainability goals into investment, risk and long-term value, writes John Ngobi Ggolooba
John Ngobi Ggolooba. (Courtesy)
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OPINION
By John Ngobi Ggolooba
Environmental, social and governance (ESG) considerations are increasingly shaping how businesses think about risk, capital and long-term value. But for ESG to move beyond policy documents and presentations, it must become part of the decisions that determine how a business allocates its resources and creates value.
This was one of the key reflections I shared during the chief finance officer (CFO) Sustainability Summit hosted by CFO East Africa, where I joined fellow finance leaders to discuss the evolving role of the CFOs in advancing ESG.
For me, the CFO’s role in ESG can be viewed through four areas: strategy, risk, capital and reporting. We must help integrate sustainability into long-term business decisions, translate ESG risks and opportunities into financial implications, support responsible allocation of capital and ensure that sustainability reporting is credible, measurable and useful to stakeholders. Put simply, we must connect sustainability to business value.
Our stakeholders expect finance leaders to understand return, risk and value. When we support an ESG initiative, we must be able to explain its financial implications, demonstrate its long-term value and give stakeholders confidence of the sustainability.
For a financial entity that deals with investment, ESG goes beyond how it operates. It influences how the business thinks about the capital entrusted to it by clients.
As asset managers, the responsibility is to invest that capital prudently while identifying opportunities capable of generating sustainable long-term returns and contributing to economic development.
That is why it is important to explore alternative investments that can diversify portfolios while directing capital towards productive areas such as infrastructure, healthcare, renewable energy and private markets. Such businesses can also evaluate opportunities in renewable energy, including solar, where commercially viable projects can simultaneously provide attractive investment opportunities and contribute to Uganda’s development.
The important shift, however, is from simply discussing sustainability to finding commercially viable ways of deploying capital towards it.
According to the Capital Markets Quarterly Bulletin-1Q 2026, the uptake of CIS in Uganda has continued on a strong growth trajectory, with Assets Under Management rising by 48.4% year on year to sh6,262 billion as of March 2026. The Number of CIS investor accounts also increased by 4.76$ over the quarter, reaching 211,650, reflecting rising investor participation and growing confidence in regulated investment vehicles. This momentum is attributed to increased financial awareness, effective regulation, and a preference for professionally managed investment products.
Governance ties all of this together. Investment innovation must be accompanied by appropriate oversight, transparency and regulatory engagement. As we explore new investment opportunities, working closely with regulators such as the Capital Markets Authority is essential to ensuring that innovation develops within a sound framework.
The reporting environment is evolving as well. IFRS Sustainability Disclosure Standards, particularly IFRS S1 and IFRS S2, will increasingly require organisations to connect sustainability and climate-related risks and opportunities with strategy, risk management, metrics, targets and financial reporting.
The CFO’s ESG responsibility therefore extends well beyond financial reporting and moves into helping the organisation understand what ESG means, making the case for responsible investment, communicating with stakeholders and ensuring that sustainability ambitions are supported by resources, measurable outcomes and sound governance.
The message I took from the Summit is simple: ESG should not be treated as another expense line or a compliance exercise. It is a business decision. When capital is allocated with discipline, risk is properly understood, and long-term value remains at the centre of decision-making, ESG becomes part of how we build businesses that remain relevant, resilient and valuable for years to come.
The writer is the chief financial officer of Old Mutual Investment Group Uganda