Mauritius Reimagined: ESG as Strategy in an Island Economy under Transition

Long admired for its political stability, high human development, and financial services ecosystem, Mauritius is now entering a new phase of identity building—one shaped increasingly by ESG imperatives. As the global economy pivots toward sustainability, and climate resilience becomes a litmus test for credibility, this Indian Ocean nation is recasting itself not only as a financial centre, but as a sustainability laboratory for small island economies.

The stakes are high. Mauritius is highly exposed to climate risk, reliant on tourism and imports, and faces a demographic shift with rising inequality. But it also boasts strong institutions, a sophisticated financial sector, and a track record of policy-led transformation.

“ESG is not a branding exercise for Mauritius—it’s a matter of future-proofing our economy,” says Dr. Renganaden Padayachy, Minister of Finance. “We must embed sustainability into every sector—from finance and energy to tourism and trade.”

1. ESG in Context: Small Island, Global Connectivity

Mauritius is classified as an upper-middle-income country with:

• GDP (2024 est.): $14.3 billion

• Population: 1.29 million

• Human Development Index: 0.802 (2023) — highest in sub-Saharan Africa

• Ranked #1 in Africa for economic freedom, governance, and ease of doing business

But its economic model—built on sugar, textiles, tourism, and offshore finance—now faces 21st-century challenges:

• Climate change threatens coastlines, reefs, and rainfall

• Global minimum tax regimes put pressure on offshore finance

• Inequality and informal employment are on the rise

• ESG compliance is fast becoming a prerequisite for global capital

2. Environmental Sustainability: Coastal Guardianship in a Warming World

2.1 Climate Vulnerability Meets Policy Ambition

Mauritius is one of the world’s most exposed countries to climate change:

• Sea level rise of 5.6 mm/year—above the global average

• Coral bleaching and lagoon acidification impacting fisheries and tourism

• Cyclones and flash floods increasing in frequency and intensity

  
  

In response, Mauritius has committed to:

• Net-zero carbon emissions by 2070

• 60% renewable energy share by 2030

• 40% reduction in GHG emissions by 2030 (NDC target)

  
  

Progress is visible but uneven:

• Renewable energy share reached 28.4% in 2023, mostly from wind and solar

• Fossil fuels still dominate transport and heavy industry

• The Mauritius Renewable Energy Agency (MARENA) is scaling up investment—but grid modernization and battery storage remain hurdles

2.2 Blue Economy and Natural Capital

With an Exclusive Economic Zone (EEZ) of 2.3 million km², Mauritius is a blue economy powerhouse:

• Over 24% of its EEZ is designated as Marine Protected Areas (MPAs)

• The Blue Economy Roadmap (2021) prioritizes ocean-based tourism, fisheries, aquaculture, and biotech

• The Mauritius Ocean Sustainability Index (2023) measures marine biodiversity, pollution, and economic use

  
  

Mauritius is also exploring nature-based finance:

• A blue bond feasibility study is underway with the World Bank

• The Mauritius Sovereign ESG Bond Framework, published in 2023, includes marine conservation and coastal resilience as eligible categories

• Coral reef valuation pilots estimate $300 million/year in ecosystem services

“For Mauritius, the ocean is not just a resource—it’s an economic infrastructure,” says Dr. Vassen Kauppaymuthoo, marine scientist and policy advisor.

3. Social Development: Inclusion with Imbalances

3.1 Human Capital and Basic Services

Mauritius has long invested in its people:

• Universal free education and healthcare

• Literacy rate over 92%, life expectancy at 75.8 years

• Gender parity in school enrolment and high female workforce participation (43.6%)

  
  

But vulnerabilities persist:

• Youth unemployment at ~21%

• Rural-urban income gaps widening

• Informal employment accounts for 22% of total jobs

• Migrant workers in textiles and hospitality often lack social protections

  
  

3.2 Social ESG and Equity Metrics

The government is expanding social protection:

• The Marshall Plan Against Poverty includes cash transfers, subsidised housing, and microfinance

• The National Social Inclusion Foundation (NSIF) funds over 200 community NGOs

• A new Social Resilience Index, piloted in 2024, tracks ESG metrics such as housing access, gender pay gap, and educational mobility

  
  

Still, ESG data transparency on social indicators is limited, and corporate disclosures rarely include social KPIs beyond employment figures.

4. Governance and Institutional Maturity

4.1 Regulatory Strengths

Mauritius is a leader in governance by African standards:

• Transparency International CPI (2023): Rank 57/180 — highest in mainland Africa

• World Bank’s Worldwide Governance Indicators show strong rule of law and regulatory quality

• The Mauritius Financial Services Commission (FSC) is internationally respected and aligns with IOSCO, IAIS, and FATF standards

  
  

4.2 ESG Disclosure and Corporate Governance

Progress is accelerating:

• ESG disclosures are mandatory for listed companies under the National Code of Corporate Governance (2016)

• The Stock Exchange of Mauritius (SEM) launched an ESG Index in 2022, tracking 15 companies with advanced sustainability practices

• The FSC published its first Sustainable Finance Guidelines in late 2023, aligned with SASB, GRI, and TCFD frameworks

  
  

However:

• ESG adoption is limited among SMEs, which make up 90% of firms

• Only 32% of listed companies published sustainability reports in 2023

• ESG enforcement capacity at the FSC and SEM remains under-resourced

5. ESG Finance: A New Pillar for the Mauritian IFC

5.1 Green and Sustainable Bonds

Mauritius is positioning its International Financial Centre (IFC) as a hub for sustainable capital:

• The first corporate green bond was issued in 2022 by MCB Group, raising ~$40 million for renewable energy

• The Mauritius Green Finance Framework (2023) enables green, social, and sustainability-linked bonds

• The government is preparing for its first sovereign sustainability bond in 2025, tied to SDG-aligned expenditures

  
  

5.2 Sustainable Investment and Asset Management

• The Mauritius Investment Corporation (MIC) is exploring ESG-linked venture capital, particularly in fintech and renewable energy startups

• Impact investing platforms, such as AfricInvest and Bamboo Capital, are using Mauritius as a domicile for regional ESG funds

• The Mauritius IFC ESG Council, launched in 2024, brings together regulators, banks, and asset managers to standardize ESG scoring and taxonomy

“We want Mauritius to be the ESG gateway between Africa and Asia,” says Harvesh Seegolam, Governor of the Bank of Mauritius.

6. ESG Case Studies: Local Leaders in Action

Case Study 1: MCB Group – ESG in Banking

Mauritius Commercial Bank is the country’s largest financial institution:

• Published a TCFD-aligned climate risk report in 2023

• Offers green loans for SMEs and energy-efficient housing

• Issues annual Sustainability Reports, aligned with GRI and IFRS S1/S2

• Target: net-zero operational emissions by 2030

  
  

Case Study 2: ENL Group – Green Property Developer

ENL is a diversified conglomerate with major holdings in real estate and agribusiness:

• Develops smart cities with solar infrastructure, green mobility, and waste recycling

• Introduced ESG-linked KPIs in project finance and tenant contracts

• Partnered with IFC on climate risk modelling for real estate assets

  
  

Case Study 3: Rogers Group – ESG in Tourism

Rogers Hospitality is integrating sustainability into resorts and eco-tourism:

• Certified under EarthCheck and Green Key labels

• Invests in mangrove restoration and coral repopulation near its coastal properties

• Trains over 500 youth in green hospitality skills annually

7. Comparative Positioning: ESG in the Indian Ocean and Africa

Indicator (2023)	Mauritius	Seychelles	South Africa	Morocco
Net-zero target	2070	2050	2050	2050
Renewable electricity share (%)	28.4	7.5	11.3	19.4
ESG disclosure (listed firms)	Mandatory	Partial	Partial	Partial
Green bond issuance (USD million)	80	15	3,200	1,200
TI Corruption Rank (2023)	57	66	83	80
Female labor force (%)	43.6	42.1	46.4	21.8

*Mauritius leads the Indian Ocean region in governance, green finance, and institutional ESG alignment—but must scale its impact to meet global benchmarks.

8. Strategic ESG Risks and Priorities

Risks

• Slow pace of renewable energy deployment

• Exposure to climate shocks and sea-level rise

• Over-reliance on low-productivity services and tourism

• ESG fatigue among SMEs due to cost and complexity

  
  

Opportunities

1. Launch a national ESG taxonomy and scoring system

2. Develop a blue bond program with regional partners

3. Mandate ESG reporting for all public enterprises

4. Scale green jobs and vocational training in clean energy and tourism

5. Expand sustainable finance literacy across banks, regulators, and entrepreneurs

   
   

Conclusion: ESG as Mauritius’s Next Economic Strategy

Mauritius has a rare combination of governance credibility, human capital, and financial sophistication. Now, it must align that foundation with the demands of a net-zero, SDG-aligned global economy.

If it succeeds in embedding ESG across sectors—not just in finance, but in energy, tourism, agriculture, and education—Mauritius could emerge not just as a regional ESG leader, but as a global case study in sustainable transition for small states.