Environmental, Social, and Governance (ESG) principles are becoming a cornerstone of sustainable development in Oman. With the nation’s commitment to Oman Vision 2040, ESG practices are being integrated into corporate strategies to ensure long-term economic resilience and environmental stewardship. The Muscat Stock Exchange (MSX) has taken significant strides in promoting ESG reporting, aligning with global standards and regional initiatives.
ESG Disclosure Requirements as per Muscat Stock Exchange
The MSX has introduced ESG disclosure guidelines to encourage transparency and accountability among listed companies. These guidelines are currently voluntary for 2024, covering activities from 2023, but will become mandatory starting in 2025. Companies are required to report their ESG performance using a standardized framework that aligns with global best practices, such as the Global Reporting Initiative (GRI) standards.
The MSX guidelines emphasize the importance of ESG reporting for meeting investor demands, improving operational efficiency, and enhancing financial performance. They also highlight the role of ESG in risk management and reputation building.
ESG Disclosure Guidelines as per Muscat Stock Exchange
The MSX ESG Disclosure Guidelines are designed to foster a sustainable and inclusive financial culture. These guidelines align with the recommendations of the UN Sustainable Stock Exchange (SSE) initiative and the World Federation of Exchanges (WFE). They include 30 key metrics that companies must report on, covering environmental, social, and governance aspects.
The guidelines encourage companies to adopt practices such as reducing carbon emissions, promoting diversity and inclusion, and ensuring transparent governance. They also align with Oman Vision 2040, which aims to achieve a diversified and sustainable economy.
UN Sustainable Stock Exchange Initiative
The UN Sustainable Stock Exchange (SSE) initiative is a global platform that promotes corporate sustainability and inclusivity. It encourages stock exchanges to enhance corporate transparency on ESG issues and stimulate sustainable investment. The SSE initiative aligns with the United Nations Sustainable Development Goals (SDGs) and provides technical assistance, research, and consensus-building to achieve these objectives.
The MSX joined the SSE initiative in 2022, demonstrating its commitment to fostering a sustainable financial ecosystem in Oman.
ESG Initiatives by GCC Countries
The Gulf Cooperation Council (GCC) countries, including Oman, have made significant progress in integrating ESG principles. Key initiatives include:
- Saudi Arabia: Tadawul introduced sustainability disclosure guidelines in 2021.
- UAE: The Securities and Commodities Authority mandated ESG reporting for publicly listed firms in 2022.
- Qatar: The Qatar Stock Exchange launched ESG reporting guidelines and an ESG index in 2022.
- Kuwait: Boursa Kuwait implemented voluntary ESG reporting guidelines in 2021.
These initiatives reflect a regional commitment to aligning with international ESG standards and promoting sustainable development.
The 30 Metrics for ESG Reporting
The MSX ESG guidelines outline 30 metrics that companies must report on, categorized into environmental, social, and governance aspects. These metrics include:
- Carbon emissions
- Energy consumption
- Waste management
- Water usage
- Diversity and inclusion
- Employee health and safety
- Community engagement
- Board diversity
- Executive compensation
- Shareholder rights
These metrics provide a comprehensive framework for assessing a company’s ESG performance and aligning with global sustainability goals.
Summary of ESG Disclosure Guidelines on the MSX Website
The MSX website provides detailed ESG disclosure guidelines, emphasizing the importance of transparency and accountability. The guidelines encourage companies to adopt sustainable practices and report their ESG performance using standardized metrics. They also highlight the alignment of these guidelines with Oman Vision 2040 and global ESG standards.
By adhering to these guidelines, companies can enhance their reputation, attract sustainable investments, and contribute to Oman’s long-term economic and environmental goals.
Source:
Muscat Stock Exchange: Muscat Stock Exchange
Muscat Daily: Oman issues ESG reporting guidelines for listed companies
KPMG: Navigating the ESG reporting landscape in Oman – KPMG Oman
UN SSE: Sustainable Stock Exchanges Initiative | SSE Initiative
GCC BDI: APCO-GCC-BDI-ESG_Report_2022.pdf
