Overlapping regulatory mandates on how companies should report on the environment and corporate governance is making compliance difficult, a global audit firm has said.
The environmental, social and governance (ESG) head at KPMG East Africa Edgar Isingoma said regulations from multiple bodies is creating a complex landscape for implementation of guidelines.
“There are scattered initiatives and standards which increase complexity and results in lack of comparability of disclosure across organisations,” Mr Isingoma said on Thursday during a virtual meeting.
Firms are now required to adopt and report on environmental, social and governance guidelines, in addition to financial performance in annual reports where they had been limited to.
Mr Isingoma, who is also a partner at KPMG said the lack of clear metrics to measure the key performance indicators was also hurting adoption.
“There is lack of clear and consistent guidance on how to respond and know which key performance indicators to measure.’’
Regulatory bodies in Kenya such as the Central Bank of Kenya (CBK) in October last year issued guidance on mandatory reporting on climate-related risks, while Nairobi Securities Exchange #ticker:NSE in November issued ESG disclosure guidance manual in partnership with Global Reporting Initiative.
The Capital Markets Authority issued corporate governance codes in 2016 while the Kenya Bankers Association also issued standards for sustainable finance.
Dar es Salaam Stock Exchange and the National Bank of Rwanda have also reinforced their own rules around reporting ESG, while the Bank of Uganda is carrying discussion on possible regulations.
This is seen as loading and costly to companies that are cross-listed or with subsidiaries in those countries.
ekivuva@ke.nationmedia.com
