General
ESG Obligations Leading to Risk of Increased Litigation for African Businesses
By Darryl Bernstein
As African businesses begin to recover and build the resilience needed to successfully navigate COVID-19 disruption, a focus on Environmental Social and Governance (ESG) strategies is proving to be essential for long-term success.
In order to stay competitive, organisations based in Africa are engaging meaningfully with ESG to build robust sustainability strategies that meet stakeholder expectations and enable compliance with global and domestic mandatory and voluntary ESG standards and codes.
ESG encompasses a broad range of issues across the spectrum of Environmental (climate change, biodiversity, waste, water and resource use, pollution), Social (human rights, labour practices, HSE, diversity); and Governance (corporate governance, ethics, compliance) matters.
As climate change impacts become clearer and nearer, there is an increasing emphasis on the Environment aspect of ESG. After the pandemic, initiatives in Africa are expected to have a heightened focus on green, low-carbon and sustainable development, via, for example, clean energy production, community care initiatives, green transport and sustainable water projects, wildlife protection programmes and low-carbon development projects.
There is a major role for ESG policies to play in mitigating some of the effects of climate change, through planning and building for hotter temperatures, higher sea levels and more extreme weather conditions, for example.
Organisations are adopting new strategies that address climate change risk and identify the sustainable opportunities that arise from addressing climate concerns. To regulate this, there are likely to be developments from African regulators in the near future that address climate risk disclosure requirements for businesses operating on the continent.
Post-pandemic, the discussions around ESG are also resulting in an added emphasis on the Social aspect – which, among other things, focuses on protecting an organisation’s workers and the wider local populations in which these businesses are based.
Organisations are looking at ways to build better social programmes that are more resilient to future pandemics and ensure good business practice. A focus on issues such as enhancing considerations around the health and safety of employees and communities, implementing diverse and inclusive workplace cultures, and building good management teams that can pull employees together in all kinds of remote, physical workplace and hybrid settings, put companies in a strong position to move forward.
The Governance aspect has also been emphasized by the pandemic, with an increased focus on due diligence around compliance with regards to anti-bribery and corruption, data privacy and cyber security legislation, for example.
Some of the larger African jurisdictions have already implemented mandatory ESG and sustainability reporting frameworks and, going forward, more African regulators are expected to replace current voluntary frameworks with mandatory ones or to adopt new mandatory frameworks. In turn, organisations operating in Africa will seek guidance and more detail from corporate regulators on how they want to see ESG reported and the practices behind the reporting process.
In South Africa, there are many laws that govern ESG factors, including business and financial sector conduct, economic and social empowerment and environmental protection. Voluntary codes such as the King IV Code on corporate governance and the Code for Responsible Investing in South Africa also serve as a guide to businesses on ESG considerations.
Other examples include Kenya, where the Capital Markets Authority introduced Stewardship and Corporate Governance Codes in 2017 and Nigeria, where the Nigerian Code of Corporate Governance was introduced in 2019. Globally, in addition to numerous country-specific laws, there are a plethora of voluntary sustainability-focused codes and standards, including the UN Guiding Principles on Business and the Human Rights and UN Guiding Principles Reporting Framework.
ESG risk management has become a mainstream component of corporate due diligence programmes, and corporate boards are being held accountable for their ESG practices by their shareholders, stakeholders and management teams. Risks for non-compliance with the multitude of global and local laws, voluntary codes and best practices governing ESG factors range from criminal prosecution and hefty fines to reputational risk and business failure as a result of not fulfilling ESG commitments.
Actual and perceived non-compliance with ESG regulations and best practices have engendered activist shareholder protests and action against the parent companies of global groups. A key challenge for businesses is navigating where the laws end, and business strategy and market expectations begin. This is especially the case when navigating the major global issues of, for example, environmental standards and human rights responsibilities. Such issues often lead to activism, litigation and class actions if a business falls short of sustainability standards or appears to be breaking publicly made promises.
Contractual liabilities around ESG must be carefully considered, as contracts that stipulate compliance with certain standards can trigger a breach of contract claim if there is seen to be any violation of the terms. It would be better for businesses to ensure in advance that they can fulfil specific ESG obligations before agreeing to them contractually. Limitations of liability should also be agreed upon to mitigate the risks.
Further, if companies have made public promises regarding their ESG obligations and they are seen to be not fulfilling such obligations, they could be vulnerable to the threat of class actions that are brought by consumers and shareholder activists. Companies should identify what ESG goals can be properly measured, and what goals should be clearly defined as being aspirational and ensure that this is accurately communicated in the public domain. Reputational damage from ESG non-compliance escalates quickly and can be difficult to recover from.
For African organisations, maintaining a long-term sustainability strategy ensures sound financial performance, full compliance with local and global laws and frameworks, and substantially increased resilience in a challenging post-pandemic environment. In the current global environment, ESG is no longer just about doing the right thing, the dial has shifted and having a legally sound and comprehensive approach to ESG considerations is a prerequisite for business success.
Darryl Bernstein is a Partner and Head of the Dispute Resolution Practice at Baker McKenzie in Johannesburg
By Adedapo Adesanya
Nigeria’s electricity distribution companies (DisCos) generated N196.13 billion in revenue in March 2026, despite billing customers a total of N246.43 billion during the month, according to the latest commercial performance report released by the Nigerian Electricity Regulatory Commission (NERC).
The figure represents a slight decline from the N196.68 billion collected in February, highlighting persistent challenges in revenue recovery across the power distribution segment, even as energy supplied to the grid continued to improve.
NERC’s March 2026 fact sheet showed that electricity billing rose by 1.71 per cent from N242.29 billion recorded in February, reflecting increased energy deliveries and customer charges. However, collection efficiency declined to 79.59 per cent from 81.17 per cent in the previous month, indicating that a significant portion of billed revenue remained uncollected.
The regulator disclosed that DisCos received 293.76 million kilowatt-hours of electricity during the review period, representing a 6.02 per cent increase compared to February. The development suggests a modest improvement in power availability across the distribution network.
Despite the increase in energy supplied, revenue recovery remains uneven across the industry. NERC reported that the average approved tariff for March stood at N124.30 per kilowatt-hour, while actual collections averaged ₦100.75 per kilowatt-hour, resulting in an overall revenue recovery efficiency of 81.05 per cent.
Among the eleven DisCos, Ikeja Electric emerged as the strongest performer, posting a revenue recovery efficiency of 99.30 per cent. Eko Electricity Distribution Company followed with 95.73 per cent, while Benin DisCo recorded 85.18 per cent.
At the lower end of the performance table, Kaduna Electric recorded the weakest recovery rate at 35.65 per cent. Jos DisCo and Yola DisCo also struggled, achieving recovery efficiencies of 53.53 per cent and 58.58 per cent, respectively.
Ikeja Electric also led in collection efficiency with 96.38 per cent, ahead of Benin DisCo at 90.97 per cent and Eko DisCo at 87.68 per cent. Kaduna, Jos and Yola remained the poorest performers in this category, underlining the persistent commercial and operational challenges facing power distributors in parts of northern Nigeria.
In terms of billing efficiency, Eko DisCo ranked first with 92.30 per cent, followed by Port Harcourt DisCo at 90.36 per cent and Ikeja Electric at 87.76 per cent. Yola DisCo recorded the lowest billing efficiency at 58.68 per cent.
The latest figures underscore the mixed realities within Nigeria’s power sector. While electricity supply and customer billing continue to improve, revenue collection remains a major obstacle to the financial sustainability of the industry.
Analysts note that stronger metering penetration, improved customer confidence, reduction in energy theft and more efficient collection systems will be critical if DisCos are to close the widening gap between electricity supplied, billed revenue and actual collections.
The March performance report comes as regulators and industry stakeholders intensify efforts to strengthen the commercial viability of the electricity market, attract fresh investment and improve service delivery across the country.
By Adedapo Adesanya
Interswitch has entered into a partnership with Geneva-headquartered banking software provider Temenos to offer managed banking services to financial institutions across the continent, deepening its push into banking technology.
The partnership will see Interswitch adopt Temenos’ banking technology across core banking, digital banking, payments, wealth management, and financial crime management.
This will enable the firm to provide cloud-hosted and on-premises managed services to lenders on the continent. The service will initially target Nigeria, Ghana, Côte d’Ivoire, Kenya, and other African markets.
“This is a pivotal moment for Interswitch as we accelerate our expansion beyond payments and reimagine digital banking for Africa,” Mr Jonah Adams, managing director for Digital Infrastructure and Managed Services at Interswitch, said in a statement.
By combining Temenos’ software with its existing footprint across the continent, Interswitch is positioning itself as a technology partner that can help banks upgrade critical systems without having to manage the complexity of large-scale technology deployments.
“By adopting Temenos’ cloud-native, composable platform, Interswitch gains the flexibility and scalability to accelerate its next phase of growth and deliver banking services that meet the needs of African markets,” Mr Adams added.
For Temenos, the deal strengthens its presence in Africa through a partner with deep relationships across the banking sector. It lost one of its banking customers, Sterling Bank, in 2024 after the tier-2 Nigerian bank switched to SEABaaS, a new custom-built core banking application.
“Interswitch is an important new customer and partner for Temenos in Africa,” said Mr William Moroney, Chief Revenue Officer at Temenos. “Interswitch’s strong presence across the continent also extends our reach and further strengthens our ecosystem and partner network.”
Founded in 2002, Interswitch built its reputation as one of Africa’s largest payments companies through products such as Quickteller and Verve, its domestic card scheme.
By Adedapo Adesanya
Tropical General Investments (TGI) Group and Singapore-based Wilmar International have agreed to combine their Nigeria and Republic of Benin operations into a 50:50 joint venture aimed at building a dominant integrated food and agribusiness platform across West Africa, targeting a market estimated at $12 billion.
The proposed merger will consolidate operations across several value chains, including agriculture, oil palm plantations, edible oils, edible nuts, rice, food manufacturing, and distribution, creating one of the region’s largest end-to-end food production and supply chains.
Under the arrangement, both firms will integrate their complementary strengths, with Wilmar contributing global expertise in palm oil, speciality fats, and large-scale agribusiness operations, while TGI brings established local manufacturing capacity, consumer brands, and an extensive distribution network across Nigeria and neighbouring markets.
Chairman and Chief Executive Officer of Wilmar International, Mr Kuok Hong, said the partnership would enhance both firms’ ability to serve Africa’s expanding consumer base, describing Nigeria and Benin as strategic growth markets.
“For more than four decades, TGI Group has built a leading position in Nigerian food manufacturing and distribution. This partnership will leverage Wilmar’s global scale and expertise as well as TGI’s local knowledge to deliver innovative food solutions across Africa,” added TGI Group founder and chairman, Mr Cornelis Vink.
On his part, Vice Chairman of TGI Group, Mr Farouk Gumel, said the deal reflects confidence in Nigeria’s long-term economic prospects, adding that it would deepen domestic value addition, strengthen food security, support smallholder farmers, and create jobs.
Adding his input, Wilmar’s Africa Head, Mr Santosh Pillai, described the transaction as a strategic fit, noting that the combined entity would have the scale, local insight, and operational depth needed to better serve consumers in the region.
The companies said the transaction is expected to be completed in the 2026 financial year, subject to regulatory approvals and other customary conditions.
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