Zambia’s ESG Crossroads: Mining Wealth, Green Growth, and a New Social Compact

Zambia is a nation of paradoxes. It is one of the world’s largest copper producers, yet nearly 60% of its population lives under the poverty line. It has abundant rivers and forests, yet suffers from rising deforestation and climate shocks. It remains rich in natural capital, but historically poor in inclusive growth.

Today, Zambia is at a turning point.

With a new political leadership, a return to debt sustainability, and a wave of climate and governance reforms, Zambia is emerging as a model for ESG transformation in sub-Saharan Africa. It’s a story of green hope—anchored in mining reform, fiscal transparency, and a renewed commitment to people and planet.

“Zambia is building not just a resilient economy—but a responsible one,” says Situmbeko Musokotwane, Minister of Finance and National Planning. “We want to become a credible destination for sustainable investment.”

1. ESG in Context: From Debt Distress to Development Diplomacy

Zambia’s recent history has been turbulent:

• First African country to default on its debt during the COVID-19 era (2020)

• Reached a $6.3 billion restructuring agreement with bondholders and official creditors in 2023

• Now under a $1.3 billion IMF Extended Credit Facility, with ESG-linked reforms

Macroeconomic snapshot:

• GDP (2024 est.): $32.1 billion

• Population: 20.5 million

• Public debt: ~78% of GDP (down from 120% in 2021)

• Inflation: 9.5% (2024), with food prices still volatile

• Gini coefficient: 0.57 (among the highest in Africa)

Despite structural challenges, Zambia is realigning its development model around climate-smart infrastructure, social equity, and institutional reform—with strong support from the World Bank, IMF, AfDB, and the EU.

2. Environmental Sustainability: From Copper to Climate Resilience

2.1 Mining, Emissions, and Just Transition

Mining is Zambia’s lifeline—and its ESG challenge:

• Contributes ~70% of export earnings, ~10% of GDP

• Copper, cobalt, and manganese critical for green technologies globally

• But mining is energy- and water-intensive, and linked to pollution, displacement, and deforestation

The government is now:

• Reviewing mining licenses and environmental permits

• Introducing ESG disclosure requirements for companies under the Mines and Minerals Development Act (Amendment Draft 2024)

• Working with IFC and EITI on ESG benchmarks for copper and cobalt exports

Green mining goals include:

• Electrifying mining fleets and reducing diesel dependency

• Investing in sustainable tailings management and water recycling

• Linking mining revenues to climate adaptation funds for host communities

2.2 Renewable Energy and Climate Adaptation

Zambia is highly vulnerable to climate change:

• 80% of electricity comes from hydropower

• Droughts and El Niño events have led to load-shedding and water stress

• Agriculture—employing 60% of the population—is increasingly climate fragile

Climate policy responses:

• Zambia’s Updated NDC (2021) targets a 25% emissions reduction by 2030, conditional on international support

• Plans for 2.3 GW of solar and wind capacity by 2030

• Launch of Green Growth Strategy (2023–2030) with AfDB and UNDP

Key milestones:

• Scaling Solar projects with IFC in Lusaka and Copperbelt provinces

• Launch of the Zambia Climate Change Fund (ZCCF) to finance local adaptation

• Development of climate-smart agriculture zones in Eastern and Southern provinces

3. Social Sustainability: Poverty, Equity, and Human Capital

3.1 Poverty Reduction and Social Protection

Despite mineral wealth, Zambia faces deep structural poverty:

• 58% of people live below the national poverty line

• Rural poverty exceeds 76%

• Youth unemployment remains high at ~20%

The government is scaling up:

• Social Cash Transfer (SCT) program (reaching 1.2 million households in 2024)

• Free primary and secondary education rolled out in 2022

• Public health insurance and maternal care expansion in rural areas

Social ESG priorities include:

• Targeting child malnutrition (35% stunting rate)

• Gender-based violence prevention and legal support

• Improved access to water and sanitation in informal settlements

“You cannot have a sustainable economy if your people are starving,” says Mutinta Buumba, a development economist in Lusaka. “ESG starts with dignity.”

3.2 Gender, Youth, and Inclusion

Women and youth are central to Zambia’s ESG future:

• Female labor force participation: 59%, but concentrated in informal work

• Only 19% of corporate board members are women

• Education gaps persist in STEM and vocational fields

Key reforms and programs:

• Gender Equity Act (2022) mandates quotas in state-owned firms

• Youth Empowerment Fund supports green startups and digital businesses

• New National ESG Scorecard (2024) includes gender KPIs for public projects

4. Governance: Transparency, Fiscal Reform, and ESG Regulation

4.1 Institutional Strength and Public Accountability

Zambia is rebuilding trust in institutions:

• Ranked 96/180 on Transparency International’s Corruption Index (2023)

• Passed the Public Finance Management Act (2022) with IMF support

• Created the Debt Transparency Portal to publish external liabilities

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Anti-corruption momentum:

• High-profile investigations into procurement fraud and mining contracts

• Digitization of customs, land registries, and budget execution

• Formation of ESG Compliance Units in Auditor General’s Office and ZRA

4.2 ESG Policy and Corporate Regulation

Zambia is developing its ESG rulebook:

• Draft Sustainable Finance and ESG Disclosure Law expected by 2025

• Zambia Development Agency (ZDA) now requires ESG risk screening for all FDI applications

• Lusaka Securities Exchange (LuSE) issued voluntary ESG Reporting Guidelines in 2023

Private sector uptake:

• Major mining and agribusiness firms (e.g., First Quantum, Zambeef) have published sustainability reports aligned with GRI and TCFD

• Pension funds and banks integrating climate stress tests and exclusion lists

5. ESG Finance: Green Bonds, Carbon Credits, and Impact Investing

5.1 Sovereign and Subsovereign Green Finance

Zambia plans to issue its first sovereign green bond in 2025:

• Framework under development with AfDB and UNEP FI

• Expected allocation to solar energy, water resilience, and reforestation

Municipalities and provinces are piloting:

• Green municipal bonds for water and sanitation projects

• Climate-resilient infrastructure loans with World Bank and EU guarantees

5.2 Carbon Markets and Private Capital

Zambia is rich in carbon sequestration potential:

• Over 44% forest cover, but deforestation exceeds 250,000 hectares/year

• REDD+ projects underway in Luapula and Western provinces

• Developing a National Carbon Registry, aligned with Article 6 of Paris Agreement

Private finance trends:

• Green credit lines from Absa, Stanbic, and NATSAVE

• Rise of impact investment funds in clean tech and agribusiness

• Zambia is positioning as a regional hub for high-integrity carbon offsets

6. ESG Case Studies: Zambia’s Sustainability in Action

Case Study 1: ZESCO – Powering a Clean Energy Shift

• Zambia’s state-owned utility

• Investing in solar and hydro diversification

• Targeting 30% renewables share by 2030

• Partnering with IFC and China Power on large-scale solar parks

Case Study 2: Zambeef – ESG in Food and Agribusiness

• One of Africa’s largest vertically integrated agribusinesses

• Adopted ESG-linked KPIs in 2023

• Reducing methane from cattle, and investing in regenerative grazing

• Working with FAO on climate-resilient maize and soy

Case Study 3: Livingstone Municipality – Climate-Ready Tourism

• Pilot city for Green Cities Africa initiative

• Introduced sustainable mobility, waste management, and solar lighting

• Partnering with UNEP and local banks on green hotel retrofits

• ESG budgeting and SDG tracking dashboards launched in 2023

7. Comparative ESG Performance: Southern Africa Snapshot

Indicator (2023)	Zambia	Kenya	South Africa	Botswana
Renewable electricity (%)	80%	90%	17%	46%
ESG disclosure regulation	Draft	Partial	Mandatory (JSE)	Partial
Green bond issuance	Planned	Yes	Yes	No
Forest cover (%)	44%	6%	34%	20%
CPI Corruption Rank (TI)	96	126	83	39
Female labor force (%)	59%	49%	47%	66%

*Zambia leads in renewable energy and climate ambition, while working to catch up in finance, gender equity, and ESG reporting infrastructure.

8. Strategic ESG Risks and Opportunities

Risks

• Fiscal space still constrained by debt repayments

• ESG adoption among SMEs and informal sector remains low

• Climate shocks threaten agriculture and hydropower

• Forest degradation and land-use change not yet fully regulated

Opportunities

1. Launch and scale a sovereign green bond program

2. Develop a Zambia ESG Index for the LuSE and pension funds

3. Leverage copper and cobalt ESG branding for sustainable mining exports

4. Expand REDD+ and verified carbon markets

5. Build green skills training and ESG curricula for youth and civil servants

   
   
   
   

Conclusion: ESG as Zambia’s New Development Pathway

Zambia is rewriting its story—from debt and dependency to resilience and responsibility. With the right mix of governance reforms, climate leadership, and social investment, it can become a leading ESG frontier market in Africa.

The world needs more clean copper, clean energy, and clean governance. Zambia is showing that—with courage and coordination—it can deliver all three.