Why African CEOs find it especially hard to choose between profit and planet
In the glass towers of Nairobi’s Westlands and along the shores of Lake Victoria, a reckoning is underway. Chief executives, long accustomed to balancing risk and reward against infrastructure deficits and market volatility, now face an additional calculation: how to reconcile shareholder returns with mounting climate impacts that hit Africa harder than anywhere else. For a continent that contributes less than 4 per cent of global emissions yet suffers disproportionately from climate change, the answer carries particular urgency.
Consider the position of Peter Ndegwa, chief executive of Safaricom, East Africa’s most profitable company. Under his leadership, the telecommunications giant published its 2025 Sustainability Report claiming a total societal impact of KES 1.1 trillion (£5.9 billion), far exceeding its financial profit. The company planted 830,000 trees, recycled 190 tonnes of e-waste, and powers its operations with Kenya’s abundant renewable energy. “Sustainability is not an obligation for us; it is a business imperative,” Ndegwa declared at the report’s launch. Yet he secured sustainability-linked loans worth KES 30 billion to fund these initiatives, raising a pointed question: when does environmental responsibility become too expensive for shareholders to stomach?
At East African Breweries, Jane Karuku faces similar pressures. The brewing giant invested KES 5.1 billion in biomass plants to replace heavy fuel oils, achieving 70 per cent renewable energy usage across its manufacturing operations. “Long-term business success goes hand in hand with environmental stewardship,” Karuku insists. But with Kenya requiring $40 billion over the next decade to meet its climate goals, and climate impacts already wiping out as much as 15 per cent of per capita GDP growth in African countries, the arithmetic grows increasingly challenging for companies answerable to quarterly earnings calls.
When adaptation meets the balance sheet
The arithmetic of green investment in Africa carries unique complications. Whilst Kenya generates 90 per cent of its electricity from renewable sources, among the highest proportions globally, the country still requires enormous capital to build resilience against floods, droughts, and extreme weather events that have become routine occurrences. The floods of April 2024 displaced thousands in Nairobi’s Githurai area. Lake Victoria and Lake Turkana have swollen dramatically between 2010 and 2020, submerging lakeside communities. Agriculture, which accounts for 33 per cent of Kenya’s GDP, faces mounting threats from erratic rainfall patterns.
For African CEOs, the pressure intensifies because they operate in an environment where basic infrastructure gaps persist alongside climate adaptation needs. Paul Russo, chief executive of KCB Group, Kenya’s second-largest bank by assets, joined the African Business Leaders’ Coalition to address climate change ahead of COP27. “We are now at a point where even critics have given up denying the reality about climate change,” Russo observed. “Storms, droughts, and rising sea levels are bleak signs of what we are facing. Today, several parts of world have become uninhabitable because of climate change.” Yet KCB reported record profits of KES 60 billion in 2024, primarily from risk-free government lending rather than financing the green economy that Russo champions. The contradiction is stark: banks prosper by avoiding the very climate investments their executives advocate.
The regulatory maze
Market incentives alone have proved woefully insufficient. Kenya’s government has responded by mandating that from 2027, all listed companies must publish Environmental, Social, and Governance reports under new disclosure rules aligned with global standards. The East African Community is developing harmonised frameworks. At December’s United Nations Environment Assembly in Nairobi, Kenya championed three resolutions addressing antimicrobial resistance, AI sustainability, and sports-driven behavioural change. President William Ruto told environment ministers that climate threats demand “predictable, urgent funding for developing countries.”
Yet regulation brings complications that African companies feel acutely. The EU’s Carbon Border Adjustment Mechanism imposes tariffs on imports from countries with lax environmental standards. African leaders protest that such measures penalise nations still building basic infrastructure whilst Europe industrialised on fossil fuels for centuries. Kenya produces 90 per cent renewable electricity, yet its companies face export barriers designed for coal-dependent economies. The injustice stings: Africa bears minimal responsibility for historical emissions but maximum vulnerability to their consequences, whilst also navigating trade rules that fail to account for this disparity.
The innovation opportunity
A different narrative emerges from Africa’s climate-focused entrepreneurs. Over 400 nominations for the 2024 Earthshot Prize came from Africa, with 100 from Kenya alone. Young innovators are building climate-resilient housing with local materials, developing sustainable agriculture technologies for smallholder farmers, and creating circular economy solutions. Microsoft partnered with Nairobi-based CETRAD to use geospatial machine learning for water management around Mount Kenya, balancing irrigation needs with sustainable supply. The company is building a data centre campus in Olkaria powered entirely by geothermal energy.
These success stories point to a path where environmental necessity drives commercial innovation. Kenya’s electricity access rose from 37 per cent in 2013 to 79 per cent in 2023, according to the International Energy Agency, largely through renewable infrastructure that leapfrogged traditional grid development. Africa’s green economy could create 3.3 million jobs by 2030, according to Kenya’s Special Envoy on Technology, Ambassador Philip Thigo. Yet affordability remains a major obstacle, and energy storage technology, which could make renewable power truly reliable, remains underdeveloped across the continent.
The financing gap
The numbers tell a sobering story. Kenya needs $40 billion over the next decade to meet its climate commitments under the Paris Agreement. Climate impacts are already erasing up to 15 per cent of per capita GDP growth in African countries. Augustine Njamnshi of the Pan African Climate Justice Alliance captures the frustration: “We cannot talk about advancing sustainable solutions for a resting planet when our own part of Mother Earth is burning and flooding at the same time.” African negotiators at global forums call repeatedly for predictable funding and stronger environmental laws, but a 2024 WWF report shows biodiversity continues declining across the continent.
The financing challenge is particularly acute because African companies compete for capital against global firms operating in wealthier markets. When Safaricom secured its sustainability-linked loan, it demonstrated that green financing is possible. But smaller enterprises lack similar access. Banks prosper from government securities rather than climate lending. The gap between what’s needed and what’s available grows wider.
The dilemma persists because it rests on fundamentally mismatched timeframes and resources. Financial markets operate on quarterly cycles; ecological systems on generational ones. African economies need immediate development to lift populations from poverty whilst simultaneously adapting to climate change they didn’t cause. CEOs exist in the uncomfortable middle, their tenures averaging just seven years in large corporations. They must deliver results that satisfy impatient investors whilst making decisions whose consequences will unfold long after they’ve departed, all whilst operating in markets with less capital cushion than their Western counterparts.
Consider the executives named above. Ndegwa’s compensation exceeded KES 250 million in 2023. Russo earned KES 250.2 million in 2024, a 40.8 per cent increase. Karuku received KES 83.49 million. These are substantial rewards in a country where GDP per capita sits around £1,640. The pay packages reflect market rates for leading large enterprises, but they also highlight the stakes: executives who champion sustainability must convince shareholders that long-term resilience justifies short-term investment, all whilst their personal wealth depends on those same shareholders’ approval.
Perhaps the question itself is flawed. Framing the choice as profit versus planet implies a zero-sum contest that may not exist, particularly in Africa where climate impacts directly threaten business continuity. Companies that invest in water stewardship protect supply chains; those that build renewable energy infrastructure hedge against volatile fossil fuel prices; businesses that demonstrate environmental credentials attract international partners increasingly focused on ESG criteria. EABL’s regenerative agriculture programmes have doubled farmer yields in some regions, simultaneously improving environmental outcomes and securing raw material supplies.
The challenge lies not in whether to act, but in convincing markets to value actions whose benefits arrive slowly whilst costs appear immediately. African CEOs navigating this terrain face an additional burden: they must prove sustainability works in resource-constrained environments where every shilling matters, where infrastructure gaps persist, and where climate impacts hit hardest. They deserve neither blanket condemnation nor uncritical praise. They operate within constraints not of their making, answerable to systems that reward short-term thinking whilst penalising long-term investment, all whilst their continent faces disproportionate climate risks.
Until incentive structures change, the dilemma will persist: a choice that shouldn’t exist, but does, between doing well and doing right. The uncomfortable truth is that reconciling these imperatives requires more than executive vision. It demands a fundamental reimagining of how markets measure value and time, how global finance accounts for historical responsibility, and how wealthy nations support adaptation in places that bear minimal blame for the crisis. For African CEOs, the stakes are nothing less than their continent’s future.
