Vedanta Resources Shows The Future Of Responsible Business In Africa

Indian mining giant Vedanta Resources made headlines in Zambia this week when it pledged to commit $5 billion towards reducing the company’s carbon emissions over the next ten years, with a goal of reaching Net Zero by 2050. The company, which is the majority shareholder of Zambia’s Konkola Copper Mines, also pledged to provide skills training to 2.5 million families, as well as lift 100 million women and children out of poverty through education, nutrition and healthcare.

Representatives from Vedanta handing out face masks in Zambia.

The promises form part of Vedanta’s new environmental, social and corporate governance (ESG) agenda, entitled ‘Transforming for Good’. Through this programme, the company is seeking a greener business model, aiming to reduce carbon emissions by 25% by 2030. It is also placing a greater deal of emphasis on the workers it employs, as well as the communities it operates in. 

ESG is an increasingly important consideration for companies operating in the West, with a recent report by PwC highlighting that 79% of investors say the way a company manages ESG risks and opportunities is an important factor in their investment decision making. 

Regrettably, however, ESG responsibility has not caught on quite so quickly in Africa, with many foreign companies still treating the continent like the Wild West of investment; good to make a quick buck and get out. 

Perhaps nowhere is this more observable than in the telecoms sector, which as of 2019 has returned revenues in excess of $52 billion. Much of this money has gone to foreign-owned companies based in Europe or south-east Asia, who have notorious records when it comes to corporate responsibility and standing up for their customers. 

For instance, although most of these foreign-backed businesses claim to take a hard line on protecting customers’ freedom of speech, they invariably crumble in the face of autocratic governments - particularly around election time. The recent elections in Uganda, Tanzania and Zambia itself were all marred by internet shutdowns as telecoms providers kowtowed to the iron fist of aggressive incumbents and suppressed opposition voices. 

In Tanzania’s elections last year, these blackouts helped the much maligned President Magufuli secure a second term in office, despite widespread reports of pre-ticked ballots and electoral violence. Likewise in Uganda, the internet shutdown facilitated by telecoms companies helped cover-up widespread reports of electoral fraud and usher President Yoweri Museveni into his sixth term in office. 

In Zambia, former President Edgar Lungu made a last-ditch attempt to hold on to power by blocking the social networking site WhatsApp during the August elections. The blockade was enforced on all major telecoms networks, despite claims by the companies that they would maintain connectivity for all Zambians. Invariably this meant that many instances of voter fraud and electoral violence went unreported. 

The lack of consideration which most companies in southern Africa pay towards their customers is staggering, let alone the wider communities in which they operate. That is why it is so remarkable to see a foreign-owned company like Vedanta pledge concrete plans for social responsibility. 

The mining giant’s plans are certainly ambitious but in the aftermath of the COP26 climate change conference, more ambition is exactly what is needed to tackle the climate crisis. Moreover, Vedanta’s new agenda shows a change in the way foreign companies think about their African workers and customers, and that is to be encouraged.