Risk Insights ESG GPS Sustainable Newsletter

 

DEAR VALUED RISK INSIGHTS™/ ESG GPS™ SUBSCRIBER,

Welcome to the June edition of Risk Insights’ (“RI”) Monthly Sustainable Newsletter! As we progress through 2025, we’re excited to share the latest developments in our sustainability journey. This month, we continue to drive impactful initiatives advancing sustainability across Africa and beyond, showcasing key milestones, insights, and opportunities.

Let’s focus on this edition’s key highlights, impactful events, and thought leadership contributions:

• “Adapting Financial Policy to Climate Risks: Economic and Corporate Responses to a Looming Breakdown” by Shari Ramlall, Senior BI Analyst at Risk Insights. The article explores how escalating physical, transition, and liability climate risks threaten economic stability and corporate resilience, highlighting real-world examples, e.g., the 2022 KwaZulu-Natal floods and ExxonMobil’s asset impairments. The research piece outlines firms adapting financial policies e.g., from conservative capital structures to green bond issuance, while stressing the urgent need for integrated climate risk management, enhanced governance, and proactive financial strategies to ensure sustainable growth through the green transition.
• ESG Matters with Risk Insights podcast episode “The ESG Reset from Rhetoric to Real Accountability” Anushka Bogdanov shares powerful insights on the leadership paradox, regulatory shifts, and the politicisation of sustainability. She shares insights into ESG as a pathway to justice, resilience, and capital sovereignty.
• In collaboration with Risk Insights, the African Securities Exchanges Association (ASEA) is hosting the Inaugural Pan-Africa ESG Awards at the ASEA Annual Conference 2025 in Kigali, Rwanda. Congratulations to ASEA for spearheading an initiative that recognises organisations on the continent that are driving meaningful ESG impact and disclosure across Africa’s capital markets, guided by the ESG GPS tool. A team of independent panel of esteemed adjudicators has been announced, with more adjudicators from public, private and academic sectors to follow as Africa positions itself to lead in responsible, inclusive, and sustainable investment to attract green capital and deepen our capital markets.
• Risk Insights was honoured to participate at the Botho University International Research Conference (BUIRC) 2025. Anushka Bogdanov, our Founder and Executive Chair, moderated an impactful panel, while Andrey Bogdanov, the CEO of Risk Insights, presented part of his doctoral research on gender-balanced leadership influence on ESG matters with focus on JSE-listed companies. Botho University continue to drive impactful and purpose driven change through research and education with Dr Sheela Ram the Vice Chancellor and her esteemed team of educators.
• Risk Insights proudly participated in the exclusive Fireside Chat: Beyond Profit How Corporate Leaders Can Leverage Influence and Strategy to Shape Africa’s ESG Future, hosted by Botho University. The discussion explored ESG as a catalyst for sustainable growth, with leaders unpacking value creation beyond profit, key ESG metrics, and long-term integrated thinking. It also addressed talent development, global ESG perceptions, and the importance of collaborative ecosystems in accelerating Africa’s ESG maturity and impact.
• Risk Insights has been accredited as a supporting member of the Global Capacity Building Coalition (GCBC). The GCBC and its alliance is made up of international banks, companies, and organisations representing over 5,000 financial institutions, 160 financial centres, and millions of finance professionals champion climate finance, ESG capacity building, and sustainable development across emerging markets.
• ESG Matters with Risk Insights podcast episode “ESG Truth or Illusion: Who's Protecting Africa's Markets?” unpacks the dangers of performative ESG, regulatory blind spots, and greenwashing in capital markets. Anushka explores why tools like ESG GPS are critical to exposing greenwashing and protecting market trust as ESG faces mounting political pressure.
• Risk Insights has been invited to share insights at the upcoming BizStrat – Economic Resilience Africa 2025, taking place from 23–24 July 2025 at the Indaba Conference Centre in Sandton.
• Risk Insights is participating in the South African Sustainable Finance Seminar, taking place on 24 July 2025. This flagship event will gather market leaders and practitioners to explore the evolving landscape of sustainable finance in South Africa.
• Stemming from the LSE Africa Summit, sponsored by Risk Insights, Risk Insights and a task force of the RI delegation that attended the Summit, together with the London School of Economics and political science, have launched a joint initiative, “Investigating Africa’s Reputation in Improving Governance”, to develop a continentally accepted, globally recognised governance measurement tool for Africa. This project unites business leaders and academics to strengthen governance frameworks and support Africa’s global positioning in a rapidly changing world. The research asset outcomes will be presented at the LSE Africa Summit in 2026.

Stay connected as we continue driving ESG excellence, risk intelligence, and sustainable impact across Africa and beyond.

 

ESG Truth or Illusion: Who's Protecting Africa's Markets?

 

In this episode of ESG Matters with Risk Insights, Anushka Bogdanov unpacks the global leadership paradox, the politicisation of sustainability, and the flood of ESG regulations reshaping capital markets. The episode explores how sustainability is being weaponised in some regions while emerging as a strategic imperative in others. As ESG transitions from a reporting standard to a mechanism for justice, resilience, and capital sovereignty, Anushka examines what it all means for African markets where the risks of ESG colonialism and fragmented frameworks threaten to sideline local voices.

 

                                          ASEA and RI Announce Inaugural Pan-Africa ESG Awards First Adjudicators for Kigali 2025

 

In collaboration with Risk Insights, the African Securities Exchanges Association (ASEA) will host the Inaugural Pan-Africa ESG Awards at the ASEA Annual Conference 2025 in Kigali, Rwanda, this November. This landmark initiative aims to celebrate organisations driving meaningful ESG impact across Africa’s capital markets, recognising those that demonstrate leadership, integrity, and sustainable value creation beyond financial returns. We are excited to introduce the first group of adjudicators for the debut ASEA Pan-Africa ESG Awards, a distinguished panel of ESG champions, sustainable finance experts, market influencers, and governance specialists, including Pierre Celestin Rwabukumba, Dr. Vinika Rao, Anushka Bogdanov, Neo Mooki, Rami El-Dokany, Takara Lubner, Thapelo Tsheole, John MacKay, Debbie Millar, Justin Bgoni, Dr. Blessing Ayemhere, Uttum Corea, Paul Baloyi, and Thato Norman. These respected leaders will play a pivotal role in identifying Africa’s ESG trailblazers. The awards will be underpinned by the ESG GPS tool, which provides empirical evidence on disclosure practices and helps uncover genuine ESG champions, while safeguarding against greenwashing through oversight from an independent team of auditors. Africa is uniquely positioned to reshape the governance and investment narrative in a rapidly shifting global landscape through responsible, inclusive, and green capital markets. Stay tuned as we unveil the next group of adjudicators and announce the award categories Africa’s ESG future is bold, accountable, and transformational.

 

 

Risk Insights Participated in the Botho University International Research Conference (BUIRC) 2025 to Advance Africa’s Sustainability Agenda

 

Risk Insights was honoured to be part of the Botho University International Research Conference (BUIRC) in June 2025. Held under the theme “Building Sustainable Futures through Research, Innovations, Strategies, and Partnerships,” this influential gathering brought together global researchers, academics, industry experts, and policymakers to advance solutions for Africa’s sustainable future. Our Founder and Executive Chair, Anushka Bogdanov, moderated a thought-provoking panel discussion, while CEO Andrey Bogdanov presented insights from his doctoral research examining the influence of gender-balanced leadership on ESG performance, with a particular focus on JSE-listed companies. We applaud Botho University, Vice Chancellor Dr Sheela Ram, and their dedicated team for championing impactful, purpose-driven change through research, education, and collaborative dialogue.

 

Risk Insights participated in the exclusive Fireside Chat: Beyond Profit: How Corporate leaders can leverage influence and strategy to shape Africa ESG future

 

Risk Insights proudly participated in the exclusive Fireside Chat: Beyond Profit, How Corporate Leaders Can Leverage Influence and Strategy to Shape Africa’s ESG Future, hosted by Botho University. The conversation explored ESG as a catalyst for sustainable growth, unpacking how African leaders are redefining value creation beyond profit and considering which ESG metrics truly matter in driving long-term, integrated thinking and risk-informed investment decisions. From the boardroom to operational levels, discussions centred on embedding ESG through KPIs, supply chain integrity, stakeholder alignment, and robust governance frameworks. Participants also addressed the urgent ESG talent imperative, reflecting on how corporate leaders can nurture internal ESG capabilities while advocating for systemic change in education, workforce transformation, AI and technology partnerships, and executive ESG literacy. A compelling narrative emerged around challenging global perceptions, positioning African businesses as ESG innovators, and confronting bias in global ratings. Finally, the session highlighted the power of collaborative ecosystems, stressing the importance of public-private partnerships, regulatory alignment, and capital market connectivity in accelerating Africa’s ESG maturity and impact.

 

Risk Insights joined the Global Capacity Building Coalition

 

Risk Insights is proud to join the Global Capacity Building Coalition (GCBC). As part of this influential global network Through this supporting membership, RI will contribute its AI-powered ESG expertise, support capacity-building initiatives, and collaborate with global leaders to unlock new opportunities for sustainable finance and inclusive economic growth in Africa. This milestone marks another significant step in Risk Insights’ mission to advance ESG excellence and climate finance solutions across borders.

 

The ESG Reset – From Rhetoric to Real Accountability

 

In this episode of ESG Matters with Risk Insights, Anushka Bogdanov unpacks the global leadership paradox, the politicisation of sustainability, and the flood of ESG regulations reshaping capital markets. From Elon Musk’s headlines to Donald Trump’s ESG rhetoric, the conversation explores how sustainability is being weaponised in some regions while emerging as a strategic imperative in others. As ESG transitions from a reporting standard to a mechanism for justice, resilience, and capital sovereignty, Anushka examines what this means for Africa’s markets where the risks of ESG colonialism and fragmented frameworks threaten to sideline local voices.

 

Risk Insights will be sharing insights at the upcoming BizStrat – Economic Resilience Africa 2025 Conference

 

 

Risk Insights will be participating in the upcoming BizStrat – Economic Resilience Africa 2025, taking place from 23–24 July 2025 at the Indaba Conference Centre in Sandton. This vital platform is convening economists, business leaders, policymakers, and industry experts to unpack Africa’s economic challenges and opportunities in a shifting global landscape. Risk Insights will contribute to discussions on sustainability, economic resilience, and the evolving ESG landscape across the continent, highlighting how data-driven insights can support long-term resilience and sustainable growth for Africa’s economies.

 

 

                                                Risk Insights will be Participating in the LMA South African Sustainable Finance Seminar

 

Risk Insights is participating in the South African Sustainable Finance Seminar, taking place on 24 July 2025. This flagship event will gather market leaders and practitioners to explore the evolving landscape of sustainable finance in South Africa. As the country works to meet urgent climate and development goals, sustainable finance is emerging as a key driver of inclusive growth and long-term resilience. The seminar will unpack how financial institutions, corporates, and policymakers are responding to the growing demand for sustainable finance solutions, balancing global sustainability imperatives with local market realities. Discussions will cover opportunities and challenges in scaling sustainable finance, the influence of global sustainability policies on domestic strategies, comparative insights from international markets, and practical guidance for implementing transition finance in emerging economies. A particular focus will also be placed on breaking down barriers for SMEs in accessing sustainable and transition finance, ensuring a just and equitable transition for the region.

 

 

                    Risk Insights and LSE have embarked on a research paper on “Investigating Africa’s Reputation in Improving Governance”

 

Risk Insights and the London School of Economics are proud to announce the launch of “Investigating Africa’s Reputation in Improving Governance, an initiative aimed at developing an integrated governance framework for Africa. This project builds directly on the momentum of the LSE Summit 2025 and responds to the urgent need to strengthen and reshape governance across the African continent. The initiative brings together a diverse task force comprising leading business figures, who provide pragmatic and strategic insights, alongside a supervisory academic committee offering research rigour and analytical depth. The goal is to co-create a governance measurement tool that is continentally accepted and globally respected, equipping African institutions with the means to assess and improve governance performance in an era of global transformation.

The core researchers are Dr. Juliet Joseph and Dr. Dare Idowu from the University of Johannesburg. For academic rigor, they are supported by academic advisors including Prof. Tim Allen, Prof. David Luke, Dr Anna Williams, Mark Briggs, Lesley Orero, Dr Martha Geiger (LSE), Dr. Zeynep Kacmaz, Andrey Bogdanov, Anushka Bogdanov, Kunaal Kalyan, Shari Ramlall (RI), Dr. Filipe Morais, Dr. Vinika Rao, Dr. Blessing Ayemhere and a team of business leaders to support pragmatic business rigor. These include Yvonne Mothibi (IRMSA), Rami El Dokany, Fadi Kanso (AFCM), Thapelo Tsheole (CMA Rwanda), Deanne Chatterton, Pierre Celestin Rwabukumba, Alice Iribagiza (RSE), Paul Bwiso (USE), Vidya Sanooj, Ram Ottapathu (Choppies), Paul Baloyi (MMI), Nejat Kardas, Helen Wiseman (Bid Corporation), Edgar Isingoma (KPMG), and Jean-Pierre Lim Kong (Innodis Group) Boitumelo Kuzwayo, Lulama Boyce, and Kelly Makola (UJ).

The project findings and recommendations will culminate in a presentation at The London School of Economics and Political Science and the LSE Africa Summit in March 2026. Stay tuned for our upcoming blog posts and research releases as this important work unfolds.

                                                                                                  

Risk Insights ESG Risk Articles and Research

Adapting Financial Policy to Climate Risks: Economic and Corporate Responses to a Looming Breakdown

     Author: Shari Ramlall, Senior BI Analyst, Risk Insights

 

 

Introduction

According to the United in Science (2024) report and recent IPCC findings, global temperatures are increasingly likely to exceed the 1.5°C threshold, posing severe and potentially irreversible climate impacts. Climate change presents interconnected physical, transition, and liability risks that threaten economic stability, corporate performance, and long-term development. These risks extend beyond environmental concerns, encompassing reputational damage, regulatory pressures, and litigation exposure. Climate risk is therefore a strategic issue, requiring integration into organisational planning and financial decision-making (Amran et al., 2015). This essay categorises climate risks, analyses their macroeconomic implications, and evaluates how firms can adapt financial policies to enhance resilience, drawing on academic research and real-world corporate responses.

 

Main Categories of Climate Risk

Physical climate risks, including extreme heat, flooding, droughts, and storms, pose serious threats to business continuity and economic productivity. These risks are deeply interconnected, with climate change acting as a catalyst and stressor that amplifies underlying vulnerabilities, potentially triggering cascading effects and societal tipping points (Rising et al., 2022). Sautner et al. (2023) show that investor concerns about physical risks are increasingly evident in corporate earnings calls, highlighting their growing financial relevance. The economic repercussions are significant, ranging from supply chain disruptions to widespread infrastructure damage (Bozzola et al., 2017). A notable example is the 2022 floods in KwaZulu-Natal, South Africa, which caused over 400 fatalities, infrastructure losses exceeding R17 billion, and major disruptions at the Port of Durban, negatively affecting national GDP (World Bank, 2023). Such events underscore the materiality of physical climate risks and the urgent need for adaptive investment, resilient infrastructure, and strategic climate planning. Transition risks emerge from regulatory shifts, market revaluation, and innovation pressures associated with climate action. Dang et al. (2022) show that regulatory shock, for example the Nox Budget Trading Program, lead to conserve capital structures and financial distress in U.S. manufacturing firms. Similarly, Bolton and Kacperczyk (2021) find that carbon-intensive firms offer higher expected returns, reflecting that investors demand a premium for bearing carbon-related risks, a phenomenon termed “carbon premium”. A notable example is ExxonMobil’s $20 billion asset impairment in 2020, driven by lower oil price forecasts amid the energy transition. These examples highlight the financial materiality of transition risks and the urgent need for strategic adaptation (McCormick and Brower 2020). Liability risk arises from when firms face legal action over carbon emissions or inadequate climate disclosures. These risks are intensifying as courts and regulators demand accountability. A landmark case was Milieudefensie v. Shell, where a Dutch court ordered Shell to cut global emissions by 45% by 2030, citing human rights obligations. Although overturned on appeal in 2024, the ruling affirmed corporate responsibility for climate mitigation (Elliott et al. 2024). Such legal precedents highlight the growing exposure firms face and the urgent need for enhanced climate governance and risk management.

 

Climate Risk and Economic Growth

Climate risk has become a structural threat to global economic stability. Bolton and Kacperczyk (2021) show that carbo-intensive firms tend to offer higher expected returns, suggesting markets are pricing in compensation for carbon risk, but this mispricing can lead to capital misallocation or macroeconomic volatility. Research revealed that up to 96% of climate related exposure varies at firm level, highlighting asymmetry in how climate risks propagate across the economy. Burke et al. (2015) suggests that each 1°C increase in global temperature could reduce average global GDP by approximately 1.2%, with greater losses for low-income countries. This demonstrates how unchecked climate risk may exacerbate both cyclical volatility and long-term growth trends.

The economic burden of climate risk in not evenly distributed. Fossil-fuel-reliant industries and developing economies are disproportionately vulnerable due to weaker adaptive capacity and greater exposure to physical and transition risks (De Haas and Popov 2022). Dang et al. (2022) found that within the U.S., electricity prices rose 5-9% in states under the Nox cap-and-trade program, pressuring margins in energy-intensive manufacturing, while similarly Engle et al. (2020) argue that climate-related financial shocks could amplify inequality through uneven regional impacts. As climate policy introduces compliance costs and volatility, vulnerable sectors and economies may face constrained investment and short-term growth slowdowns, amplifying the need for targeted and equitable transition support (NGFS 2024).

 

Conclusion-Corporate Financial Adaptation Strategies

Firms are proactively adjusting financial strategies to address climate risks. It was found that manufacturing firms adopted more conservative capital structures in response to the NOx Budget Trading Program (Dang et al. 2022), reducing leverage to mitigate financial distress. Microsoft implements an internal carbon fee across business units, embedding environmental costs into investment decisions and promoting sustainability (United Nations 2020). Institutional investors, such as BlackRock, Vanguard, and State Street actively engage with carbon-intensive firms to reduce emissions, achieving up to a 2% drop with increased ownership (Azar et al. 2021). Additionally, firms are issuing green bonds to finance renewable energy projects, aligning capital allocation with environmental objectives. (Sautner et al. 2023) demonstrate that firms with higher climate exposure tend to generate more green patents and jobs, linking financial policies to innovation outcomes.

Climate risks, physical, transition, and liability, pose systemic threats to economies and firms. The dual economic pressures from environmental damage and decarbonisation mandates are now being priced into markets. Firms must respond by embedding climate risks into capital structures, innovation planning, and disclosure practices. Enhanced regulatory frameworks and proactive financial policies are essential to drive sustainable value creation and ensure resilience tughhro the green transition.

 

References

• Amran, A. et al. (2015). Business Strategy for Climate Change: An ASEAN Perspective. Corporate Social Responsibility and Environmental Management, 23(4), pp.213–227. [online]. Available from: https://onlinelibrary.wiley.com/doi/abs/10.1002/csr.1371.
• Azar, J. et al. (2021). The Big Three and corporate carbon emissions around the world. Journal of Financial Economics, 142(2). [online]. Available from*/: https://www.sciencedirect.com/science/article/pii/S0304405X21001896.
• Bozzola, M. et al. (2017). A Ricardian analysis of the impact of climate change on Italian agriculture. European Review of Agricultural Economics, 45(1), pp.57–79.
• Burke, M., Hsiang, S.M. and Miguel, E. (2015). Global non-linear effect of temperature on economic production. Nature, 527(7577), pp.235–239.
• Dang, V.A., Gao, N. and Yu, T. (2022). Climate Policy Risk and Corporate Financial Decisions: Evidence from the NOx Budget Trading Program. Management Science, 69(12).
• De Haas, R. and Popov, A. (2022). Finance and green growth. The Economic Journal, 133(650).
• Elliott, G. et al. (2024). Landmark Climate Change Case Overturned: The Hague Court of Appeals Overturns Ruling Ordering Shell to Reduce CO2 Emissions. Jonesday.com. [online]. Available from: https://www.jonesday.com/en/insights/2024/11/court-of-appeals-overturns-ruling-ordering-shell-to-reduce-emissions.
• Engle, R.F. et al. (2020). Hedging Climate Change News. The Review of Financial Studies, 33(3).
• IPCC. (2023). AR6 Synthesis Report: Climate Change 2023. www.ipcc.ch. [online]. Available from: https://www.ipcc.ch/report/ar6/syr/.
• McCormick, M. and Brower, D. (2020). ExxonMobil slashes capex and will write off up to $20bn in assets. @FinancialTimes. [online]. Available from: https://www.ft.com/content/145765b3-2385-4d2f-a71b-82d9b81e85da [Accessed June 3, 2025].
• NGFS. (2024). Network for Greening the Financial System Technical Document Guide on climate-related disclosure for central banks Second edition. [online]. Available from: https://www.ngfs.net/system/files/import/ngfs/medias/documents/ngfs_guide_on_climate-related_disclosure_for_central_banks_-_second_edition.pdf.
• Rising, J. et al. (2022). The missing risks of climate change. Nature, 610(7933), pp.643–651. [online]. Available from: https://www.nature.com/articles/s41586-022-05243-6.
• Sautner, Z. et al. (2023). Firm‐Level Climate Change Exposure. The Journal of Finance, 78(3).
• United Nations. (2020). Microsoft Global Carbon Fee | Global. Unfccc.int. [online]. Available from: https://unfccc.int/climate-action/momentum-for-change/financing-for-climate-friendly/microsoft-global-carbon-fee.
• World Bank. (2023). Africa’s Changing Exposure to Floods: 1985–2019. World Bank. [online]. Available from: https://documents.worldbank.org/en/publication/documents-reports/documentdetail/099121923145218934 [Accessed June 3, 2025].
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