Nothing in Kenyan law requires a ten-person startup to have an ESG policy. The Nairobi Securities Exchange’s ESG Disclosures Guidance Manual and the Capital Markets Authority’s Code of Corporate Governance Practices, the two most developed ESG frameworks in the country, apply to listed companies and public issuers, not to an early-stage private company. If an investor is asking anyway, it is because they are asking, not because the law is, and the two calls for a different response.
Why investors ask even when the law does not require it
Development finance institutions, impact funds, and increasingly ordinary venture funds carry their own ESG commitments to their own backers, and those commitments get pushed down the chain to every company they invest in, regardless of size. A fund that has promised its limited partners it screens for ESG risk cannot simply skip that screening because your company is small. The request is real even though the underlying legal obligation is not.
What a proportionate answer actually looks like
Investors evaluating an early-stage company are not expecting a listed-company sustainability report. What they are actually looking for is evidence that you have thought about the obvious risks for a business your size: how you treat employees, whether you handle customer or user data responsibly, whether there is any exposure to corruption in how you win business, and whether your operations create any environmental impact worth naming, even if the honest answer for a software company is very little. A one or two page policy that answers these plainly, rather than a document copied from a much larger company’s sustainability report, is usually exactly what is expected.
What to actually put in it
A workable starting policy for a small company covers, in plain terms: a statement on fair employment practices and non-discrimination, a data protection and privacy commitment tied to your actual obligations under the Data Protection Act, a short anti-bribery and corruption statement, which most private entities already need under section 9 of the Bribery Act regardless of ESG, and a brief, honest statement of environmental impact appropriate to what you actually do. Overstating environmental commitments you cannot substantiate is worse than a short, accurate paragraph, since it creates a claim an investor or a later acquirer can hold you to.
Treat it as a living document, not a box to tick once
The version you write to close a seed round will not be adequate by the time you raise a Series A with a larger, more formal investor. Build the policy so it can grow with the company rather than treating it as a one-off document produced to satisfy a single due diligence request. Revisiting it at each funding round, rather than only when someone asks, keeps it accurate and saves you from scrambling the next time it comes up.
