You’ve probably heard the term ESG floating around a lot lately. It stands for Environmental, Social, and Governance, and it’s become a big part of how countries and companies think about doing business more responsibly. Ethiopia is still early in its ESG journey, but there are some meaningful things happening that are worth paying attention to.

Let's start with the environment.

Ethiopia recently secured a $500 million investment to help restore degraded land across the country. That means replanting forests, improving soil, and supporting small farmers so they can deal better with climate change. It’s not just about nature; it’s also about helping people who depend on that land to make a living.

On the financial side, the National Bank is working with the European Investment Bank to figure out how to encourage more green investments and make climate risks part of how banks make decisions.

Now on to the social side of things. 

There’s been some progress in improving labor conditions, especially in the garment industry. A program called Better Work Ethiopia has helped dozens of factories improve worker safety, promote gender equality, and support people with disabilities. Since most workers in this sector are women, these improvements make a real difference.

UN Women has also launched a new strategy focused on empowering women in the economy. It’s about making sure women have access to decent jobs, financing, and opportunities to be part of climate solutions.

What about governance?

One big step this year was the launch of the Ethiopian Securities Exchange. For the first time, companies in Ethiopia can go public, and that brings new expectations around transparency and accountability, especially when it comes to ESG reporting.

There’s also an effort, led by the International Finance Corporation (IFC), to help the country set up real ESG guidelines (Launched in November 2023). They’re working with banks, regulators, and business groups to put systems in place that support responsible business practices.

The Accounting and Auditing Board of Ethiopia (AABE) is playing a pivotal role in embedding ESG principles within the country’s financial and business sectors. AABE is actively advocating for the adoption of international standards on climate risk and sustainability disclosures. Their work includes developing regulations, building capacity, and guiding businesses to align with global best practices. Notably, AABE recommends making the adoption of these ESG standards mandatory by January 2029 for public interest companies, including financial institutions and state-owned enterprises. This initiative is crucial for enhancing governance and transparency around ESG in Ethiopia.

And there’s even movement in sustainable tourism. For example, the Gorgora eco-resort project up by Lake Tana is designed to attract visitors while protecting the environment and supporting local jobs.

Notable but fragmented contributions by companies

While Ethiopia doesn’t yet have a unified ESG framework guiding the private sector, a number of companies, both international and local are stepping up in meaningful ways.
Heineken Ethiopia stands out with a structured approach through its Brew a Better World program. From treating and reusing water to restoring forests and targeting carbon neutrality, their efforts are broad and impactful. Their Burqa watershed project alone has restored 900 hectares of land and benefited over 55,000 people. Socially, Heineken supports local farmers, promotes workplace equality, and builds community housing. They’re also working toward carbon neutrality in production by 2030.

Coca-Cola Beverages Africa (CCBA), through its subsidiary, East Africa Bottling Share Company (EABSC), is advancing ESG through focused initiatives. Their plastic collection program supports collectors and empowers women, and they’ve expanded access to clean water by partnering with local NGOs. This aligns with their global “World Without Waste” goal, aiming to collect or recycle every bottle by 2030.

Safaricom Ethiopia, the telecom company, is also stepping up. About 40% of its mobile towers are now running on solar power, and they’ve committed to becoming net-zero by 2050. Ethiopian Airlines is investing in education and youth development by offering scholarships and supporting school infrastructure. Dangote Cement is helping improve rural infrastructure while reducing its environmental footprint through cleaner production practices. Unilever Ethiopia is creating economic opportunities for smallholder producers in remote areas via its Shakti distribution model. Meanwhile, SGS Ethiopia and Diginex are working to strengthen ESG transparency by providing data assurance, risk assessments and training services that help businesses align with international standards. Other companies are also making notable contributions.

Although these efforts remain somewhat fragmented, they reflect growing momentum. Together, they point toward a gradual but encouraging shift toward more responsible and sustainability-focused business practices in Ethiopia.

Of course, there's still a long way to go. 

While ESG policies and frameworks are starting to take shape in Ethiopia, enforcement remains a work in progress. Awareness is growing, but for many businesses and institutions, ESG is still a new and evolving concept. Public interest entities, especially financial institutions and state-owned enterprises, are only beginning to explore how to meaningfully integrate ESG standards into their operations. Even where commitment exists, the capacity to implement and report on ESG remains limited.

Still, it's a good start. 

The foundation is being laid through regulatory efforts, early private sector leadership, and growing interest from development partners. With continued investment, broader education, and stronger systems, ESG has the potential to drive lasting, inclusive, and sustainable progress across Ethiopia’s economy.