As South Africa faces mounting economic headwinds and urgent calls for growth, the question is back on the table: does ESG — environmental, social and governance investing — still have a place in how we manage money?
In a recent Business Day opinion piece, Ricardo Smith challenges local investors to get real about the value and limits of ESG as a meaningful investment tool. He argues that while ESG frameworks can steer capital towards sustainable, responsible businesses, too often they become a box-ticking exercise that looks good on paper but delivers little real-world impact.
By Ricardo Smith – Business Day
Smith notes that in South Africa’s unique context — with deep socio-economic inequality, an energy transition underway, and corporate governance under the spotlight — ESG should not be scrapped but sharpened. Instead of vague pledges, investors need hard metrics and credible evidence that companies are actually creating measurable value for people, planet, and profits.
“A sustainability report alone is not a guarantee of a sustainable business,” Smith writes. “It’s time to demand real accountability and clear KPIs that prove impact, not just intention.”
For pension funds, asset managers, and everyday investors, the message is clear: ESG must move beyond the marketing pitch. It should be an integrated, transparent part of how investment decisions are made — not an afterthought.
As pressure grows for business to help drive inclusive economic growth while tackling climate and governance risks, the debate over ESG’s role isn’t going away. The real test is whether the finance industry can make ESG do what it was always meant to do: build long-term, sustainable value that works for everyone.
