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Tuesday, January 31, 2023

Launch Partners

GCC Exchange Committee releases voluntary unified ESG disclosure metrics

The GCC Exchange Committee has released voluntary unified ESG disclosure metrics comprising 29 standards. The metrics are aligned with the World Federation of Exchanges and the Sustainable Stock Exchange initiative.

The metrics serve as a guideline for companies wishing to disclose ESG-related performance and serve as an important step toward standardizing disclosure across GCC capital markets. It is noteworthy that as the metrics are voluntary, they do not replace existing ESG disclosure guidelines.

“As the Gulf initial public offering boom continues, it is important that issuers are cognizant of the priorities of local, regional and international investors. The GCC ESG Metrics will serve to unify reporting across capital markets, encouraging issuers and industries to look at value beyond the balance sheet and operate as responsible businesses,” Mohammed Al Rumaih, CEO of the Saudi Exchange and chairman of the GCC Exchanges Committee, commented.

The metrics, which comprise 10 environmental, 10 social and nine governance metrics, cover disclosure guidelines on greenhouse gas emissions, energy usage, water usage, gender pay, employee turnover, gender diversity, data privacy and ethics.

The exchange committee consists of the Abu Dhabi Securities Exchange, Bahrain Bourse, Bourse Kuwait Dubai Financial Market (DFM), Muscat Stock Exchange, Qatar Stock Exchange and the Saudi Exchange which chairs the committee. The exchange committee aims to support the development of regional capital markets.

GCC capital markets have been making consistent efforts toward adopting ESG best practices with a combination of introducing regulatory and voluntary guidelines for local markets.

Boursa Kuwait launched its ESG Disclosure Guide in September 2021 and is currently collaborating with the Capital Markets Authority on the implementation of sustainable finance. Also as part of its sustainability efforts, the Central Bank of Kuwait introduced guidelines on sustainable finance in the banking sector in November 2022.

Earlier in 2020, the Shariah compliant DFM became one of the first GCC exchanges to track ESG best practice among listed companies.

“We also actively promote sustainable finance by leveraging Dubai’s world-class ecosystem. This has accelerated the emirate’s position as a global center for sustainable finance, with the total value of sustainable and ESG-linked bonds and Sukuk listed on NASDAQ Dubai reaching US$16.8 billion by the end of 2022,” Hamed Ali, CEO of DFM and NASDAQ Dubai, shared.

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