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Oman issues ESG reporting guidelines for listed companies

11 Sep 2023 By GULAM ALI KHAN

Muscat – The Muscat Stock Exchange (MSX) issued guidelines on Monday for listed companies to report their environmental, social, and governance (ESG) performance on the electronic platform of the Omani bourse.

MSX encourages all publicly listed companies to voluntarily report their ESG performance for 2024, covering their 2023 activities. Starting in 2025, reporting on the 2024 activities will be mandatory, as stated in MSX’s ESG Disclosure Guideline document.

‘By following these guidelines, companies can publicly disclose ESG information that communicates their commitments and activities while addressing key stakeholders, including but not limited to investors, clients, partners, suppliers, employees, and the overall community,’ MSX stated.

The Muscat Stock Exchange’s ESG Guidelines align with the GCC ESG Disclosure Metrics for listed companies published in 2022.

According to the exchange, developing these guidelines was a natural step following MSX’s participation in the UN Sustainable Stock Exchange (SSE) initiative in March 2022, which influences the growth of a sustainable and inclusive financial culture through ESG best practices.

The UN SSE collaborates with stock exchanges through technical assistance, consensus building, and research to contribute to the achievement of the United Nations Sustainable Development Goals (SDGs) and to stimulate investment for a sustainable future.

Exchanges worldwide partner with UN SSE to work towards a common objective of fostering financial markets that support the growth of sustainable and responsible business practices.

The MSX ESG Guideline includes information on the business case for ESG, global trends, frameworks, and standards that aid in facilitating reporting exercises. It also provides information on 30 ESG metrics aligned with the recommendations of the UN SSE initiative and the World Federation of Exchanges (WFE).

As per the guidelines, the business case for ESG reporting includes several factors, such as meeting investor demands, achieving operational improvements, complying with an evolving regulatory environment, enhancing financial performance, improving reputation, and effective risk management.

‘We encourage companies to go beyond these guidelines and publish reports in accordance with global reporting standards that best suit their needs,’ MSX said.

Haitham al Salmi, CEO of Muscat Stock Exchange, in his foreword in the ESG Guidelines document, said, “Our aim is to build a sustainable and inclusive financial culture by adopting the best ESG practices, corresponding to Oman Vision 2040 for achieving a diverse and sustainable economy. These guidelines are intended to meet the current and future needs of investors while also promoting sustainable development, a crucial part of our world’s future. Companies play a vital role in achieving this noble goal.”

While profitability and financial success are important aspects of businesses, sustainability cannot be measured solely by financial indicators, Salmi said. “It also encompasses social responsibility, environmental protection, and strong governance. Therefore, MSX is committed to enhancing transparency in these areas as a matter of responsibility. Good governance is an essential pillar for achieving sustainable development and building a strong economy.”

On a regional level, MSX is a member of the GCC Stock Exchanges ESG Committee. MSX played an active role in the development of the GCC ESG Disclosure Metrics for listed companies. The issuance of these standards for GCC-listed companies is a significant milestone in promoting ESG considerations in the region and aligning GCC markets with global best practices.

As part of its commitment, MSX strives to provide an ecosystem for ethical business practices by introducing a sustainable investment team dedicated to monitoring ESG practices at the bourse and supporting listed companies in disclosing their ESG practices.

On Monday, the Muscat Stock Exchange launched a platform on its website with the aim of broadcasting disclosures related to companies’ performance in ESG practices to enhance transparency and commitment to achieving sustainable growth for listed companies.

According to Salmi, the ESG guidelines aim to provide a comprehensive and practical toolkit for producing world-class ESG disclosures for local listed companies, serving as a best practice benchmark for all local companies aspiring to meet these standards of excellence.

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