ESG Conference 2025: a conversation with Naa Atswei Koney

Sara Carnegie: Naa Atswei Koney is a sustainability and climate change specialist with Ernst & Young West Africa and is the Lead Manager for the Climate Change and Sustainability Services unit in Accra. Her team focuses on providing end-to-end ESG advisory services to corporate clients, from how to build resilience and meet their compliance obligations, to how they can unlock value through sustainable business practices. Prior to joining EY, Naa was in private practice and has significant experience in litigation and dispute resolution, employment and environmental work. Finally, in addition to her degree in law, Naa also holds one in zoology and a master’s in environmental science from the University of Ghana.

Sara Carnegie: Thank you very much for joining us today. I'll start off with mentioning the sustainability regulations that have come from the EU and how the proliferation of those regulations such as the CSDDD, the sustainable finance regulation, has created quite a complex landscape for multinational corporations and their subsidiaries. But the application of those standards to companies operating in the Global South could present significant challenges for corporate council and external advisors. And I'm interested to know how these changes are affecting what you're being asked to advise on and how you're operating in Ghana in your practice.

Naa Atswei Koney: It's relatively easy when you're looking at a subsidiary of a parent company that's based in the EU jurisdiction, because what it means is the parent company still has control over the subsidiary. So compliance, it's easier to enforce compliance when it comes to expectations at the parent company level, which of course is in line with what the EU regulations are expecting. some of the key issues that seem to affect these compliance requirements are based largely around data availability and data collection, which can easily be solved by putting the necessary structures in place and making sure that the kind of data that has been expected is being collected in a way that is useful for the end result of reporting compliance with these EU regulations. So that is an issue that can easily be addressed with mindfulness and thoughtfulness and planning towards full compliance at the parent company level.

But when we're looking at the wider conversation which looks at supply chain, so if you're sourcing materials from a more informal sector, then we can see these challenges growing exponentially, because when you're dealing with the largely informal sector, they may not have the necessary corporate governance systems in place, or they might not even have the regular, what you typically expect of the formal sector when it comes to running businesses in place. So if you want to collect data on how they're sourcing their materials, that might become a little difficult for them. When they're thinking about how they're running their business, they're looking at the easiest way to accomplish their goals and targets; they are not really focused on what you'd find the traditional formal sector looking at or looking into. But I should add that I don't think it's something that's impossible. It just makes it a little more difficult.

We need to commit a lot more resources to try and get that level of compliance that we're looking for, and a lot of it sits with sensitisation and education. So once the businesses you're dealing with, because at the end of the day, nobody wants to lose access to their income or revenue. So, whatever it will take for them to make sure that they ensure the steady flow of income or revenue, I want to believe that they will be committed to doing that. So it's a question of how are we making sure they understand what the requirements are and then how are we helping them understand what they can do, the systems and structures they can put in place to make that they are able to comply and then also they're able to collect the kind of data that is needed for the purposes of reporting.

Sara Carnegie: You've mentioned the cocoa industry, which is a particularly large and important part of the activity in Ghana, and I'm interested to know what specific processes exist around that.

Naa Atswei Koney: We have a very unique structure where our cocoa sector is largely informal. Informal in the sense that our cocoa farms are owned by smallholder farmers, and there's a special structure in place. So, we have a law that prohibits cocoa farmers from directly exporting their cocoa. So, we have a government body, which we call Cocoa Board, in place where they are responsible for overseeing our cocoa sector and part of their obligations or responsibilities include purchasing cocoa from these smallholder farmers for onward export to our global business partners. And globally Ghana sits in an important position when it comes to the sale of cocoa beans; we are the second largest in the world and when it comes to the largest importers, we have the three of the top five, according to statistics coming from the EU's jurisdiction. The EU has a large industry surrounding the production and sale of chocolate, which is an end product of cocoa or which relies on cocoa as the primary ingredient. So, it's in the interest of both the seller and the buyer in this case, which would be Ghana and then the EU, to make sure that the cocoa industry or the cocoa sector doesn't collapse because it has a huge potential fallout for both sides of the coin. So, what we see happening is partnership between EU and Ghana to make sure that some of the key ESG risks in the cocoa-sector have been identified and managed properly.

When it comes to the biggest ESG risk, or E&S risk in the cocoa sector, we are looking at issues related to child labour, and then issues related to land use, land rights, land ownership, of which deforestation is an extension. For the cocoa farmers, their perspective is largely shaped by their experiences so they might not have a sense of what's happening at the global stage and how little actions are there and cascade into something much bigger so it's for the key players in the space, in this case the Ghanaian regulator and then also the EU, to make sure that the smallholder farmers understand how their actions have potential global implications.

Sara Carnegie: I think what would be helpful to hear more about would be the role of lawyers, and of course, what you're doing in this space. And what would you say to the external advisors or in-house counsel who are advising on these regulations need to be thinking about?

Naa Atswei Koney: The in-house counsel needs enough to be able to understand what's happening and to be able to make sure that whatever external council is providing sits well with the company's objectives. But then when it comes to external counsel, they are expected to have a lot more expertise, specialised knowledge that is useful to what the company is looking for. So I think the first step in all of it is trying to make sure that you have the requisite skill to be able to provide the kind of advice that the organisation or the company needs.

You want to make sure that at the end of the day, whatever advice you are providing, you have that good grasp of the subject matter, and then you're not leaving your client in a bad position because it has implications for their business. It could be reputational, it could be regulatory fines, or in a more stricter jurisdictions, it could come with a civil law suit against them. So let's not try and cut corners. Let's make sure that we're actually studying, understanding and appreciating what these ESG regulations require and then making sure that we're giving the best advice to our clients.