Distribution of ESG Practices Among the Luse Sub-Industries Based on Morgan Stanley Capital International ESG Industry Materiality Map

This paper assesses the distribution of Environmental, Social, and Governance (ESG) practices among the Lusaka Securities Exchange (LuSE) sub-industries, using the Morgan Stanley Capital International (MSCI) ESG Industry Materiality Map. The paper employs a descriptive quantitative research design and uses secondary data from annual audited reports, sustainability reports, and related corporate disclosures from 2019-2023, using a modified MSCI ESG industry materiality map and an industry-adjusted ESG scoring framework alongside a purposive sample of 12 firms with 60 firm-year observations. The findings show a generally high level of ESG adoption, with a mean ESG score of 6.52 for LUSE-listed firms but with a significant variation across the sub-industries. Governance emerged as the top-performing dimension, with social and environmental performance ranking second and third, respectively. We found that ESG outcomes reflected industry-specific sustainability risks in line with the MSCI ESG industry materiality map. The highest overall ESG scores were achieved by industrial conglomerates, independent power producers and energy traders, and forest products. Comparative average results were observed for the diversified real estate activities and reinsurance sub-industries. The highest score in environmental performance was Independent Power Producers & Energy Traders, in social was Diversified Financial Services, and in governance was Industrial Conglomerates. The findings indicate that there are significant differences in environmental, social, and governance distributions among LUSE sub-industries, suggesting that ESG practices are unevenly distributed among the LUSE sub-industries. The paper adds to the emerging market ESG literature and provides practical findings for policymakers, regulators, investors, and corporate managers who aim to enhance ESG integration, sustainability reporting, and long-term value creation within Zambia’s capital market