The United Nations Development Programme (UNDP) has published a white paper on Project Savannah, an initiative aimed at establishing common ESG metrics to generate digital sustainability credentials for Micro, Small, and Medium-sized Enterprises (MSMEs). This project, developed in collaboration with the Monetary Authority of Singapore (MAS) and the Global Legal Entity Identifier Foundation (GLEIF), addresses the increasing sustainability reporting demands faced by MSMEs.
The white paper outlines the challenges MSMEs encounter in navigating ESG reporting frameworks due to limited resources and the complexity of existing requirements. It highlights the critical role MSMEs play in the global economy, contributing significantly to employment and GDP, while also emphasizing their struggles with sustainability reporting.
Project Savannah proposes a standardized set of ESG metrics tailored specifically for MSMEs. These metrics cover environmental, social, and governance aspects, providing a baseline that MSMEs can use to measure, track, and report their ESG performance. The metrics are designed to simplify the reporting process, making it more accessible and manageable for smaller enterprises.
The environmental metrics focus on areas such as greenhouse gas emissions, energy consumption, water use, and waste generation. Social metrics include workforce demographics, diversity, inclusion, and workplace safety. Governance metrics address business registration, compliance with local regulations, financial practices, and transparency in financial transactions.
The white paper also emphasizes the importance of leveraging technology to streamline ESG reporting. By utilizing innovative solutions like Artificial Intelligence (AI) and Machine Learning (ML), Project Savannah aims to simplify data collection, validation, and reporting processes for MSMEs. The initiative promotes an ecosystem approach, encouraging the participation of global, regional, and local solution providers to create a comprehensive and adaptable framework.
Project Savannah recognizes the digitalization challenges faced by MSMEs, particularly in emerging markets where access to technology may be limited. To overcome these barriers, the initiative advocates for the use of cost-effective and user-friendly digital tools and platforms. The goal is to make ESG reporting more economically viable for MSMEs, transforming it from a financial burden into a strategic opportunity for growth and sustainability.
A key component of Project Savannah is the use of Legal Entity Identifiers (LEIs) to facilitate the transmission of verifiable ESG data to financial institutions and multinational corporations. This approach aims to enhance the visibility and credibility of MSMEs on the global stage, providing them with better access to green procurement, financing, and supply chain opportunities.
The white paper calls for active engagement from government agencies, financial institutions, industry enterprises, and technology providers to support MSMEs in their ESG reporting journey. It emphasizes the need for collaboration to provide MSMEs with the necessary tools, education, and incentives to begin their sustainability reporting.
Project Savannah seeks to establish a common framework for ESG data disclosure that can be adopted internationally, helping MSMEs gain recognition and trust from partners and stakeholders. The initiative aims to empower MSMEs to meet reporting requirements, address ESG risks, and capitalize on new business opportunities, ultimately delivering net benefits to the global economy.
The publication of the white paper marks a significant step in the journey towards more inclusive and sustainable business practices for MSMEs worldwide. By providing a clear set of metrics and leveraging technology, Project Savannah aims to simplify ESG reporting and enhance the global competitiveness of MSMEs.
First published by Africa Sustainability Matters
