Sub-Saharan Stock Exchanges Urged to Introduce ESG Reporting in their Listing Requirements

A recent report from ACCA stated that all the stock exchanges in Sub-Saharan region, should make mandatory for listed companies to report on environmental, social and governance (ESG) matters or establish voluntary guidelines on the subject.

The report while examining Sub-Saharan countries including Ghana, Kenya, Malawi, Mauritius, Zimbabwe and South Africa points out that there are signs of developing intentions to adopt ESG reporting but there is a lot more that can be done in this regard. The report stresses respective stock exchanges to establish broad and meaningful reporting requirements.

Except the listed companies on Johannesburg Stock Exchange (JSE), there are only 13 (15%) companies reporting on sustainability in the entire Sub-Saharan Africa, which is very low. The ACCA, via its report has urged companies within this area to enhance quality and quantity of sustainability reporting.

Rachel Jackson, sustainability head at ACCA said that the initiatives taken by stock exchanges on ESG are beneficial as they meet the growing needs of society and investors and the develop more responsible companies. It is an encouraging, that the stock exchanges of Ghana, Zimbabwe, Mauritius and Nigeria are accepting the importance of sustainability reporting. However, there is a lot that can be done in the region of stock exchanges to make them realize the influence they may have on companies in bringing them to corporate accountability.

As per the report, Stock Exchanges are required to do the following:

• Make sustainability reporting part of listing regulations or make separate guidelines for sustainability reporting.
• Consult with international stock exchanges that have already implemented sustainability reporting to learn the way of taking such initiative.
• Keep in mind investors’ requirements when developing reporting guidelines.

Corli Le Ruox, heading Sustainability and SRI Index at JSE said in the report that the stock exchanges have the required potential to influence companies to be more transparent and move towards sustainability reporting.

Rachel concludes that the report serves as a reminder that more than one stakeholder are responsible for encouraging stock exchanges to implement ESG reporting, including government and private organizations.