Stakeholders during the launch of the Nairobi Securities Exchange (NSE) Environmental, Social and Governance (ESG) Disclosures Guidance Manual at the Nairobi Serena Hotel on November 29, 2021. PHOTO | DIANA NGILA | NMG Kenya’s strive to be a sustainability thought-leader was yet again demonstrated by the recent issuance of the Nairobi Securities Exchange (NSE) Environmental, Social and Governance (ESG) Disclosure Guidance Manual.
This was a strong indicator that Kenya will not be left behind as other global markets such as the UK announced their net-zero aligned financial centres making listed companies publish plans towards a net-zero economy by 2050. In Africa, NSE was the fourth stock exchange after Egypt, Nigeria and Botswana to release an ESG guidance manual that aims at improving and standardising information listed companies report.
But what does this mean for corporates? The guidelines require that companies listed on the NSE report publicly on their ESG performance at least annually. To allow for this, the NSE has offered a one-year grace period from the issuance of the guidelines for listed companies to interact and familiarise themselves with the ESG reporting process.
Furthermore, they have developed the manual to facilitate by guiding on how to identify and measure material ESG topics, how to embed ESG into an organisation’s strategy, operations, and performance management, and how to report on ESG performance, using an approach that meets international standards on sustainability reporting.
Thereafter, listed firms are expected to deliver an integrated or separate ESG or sustainability annual report.
Having a common set of ESG metrics, that provides a full and balanced picture of an organisation’s material topics and related impacts, as well as how these impacts are managed, facilitates comparability of ESG performance of listed companies in Kenya.
Thus, the guidelines recommend the adoption of the Global Reporting Standards (GRI) as the common framework for ESG reporting. Over the years, GRI has led the way to provide the world’s most widely adopted standards for sustainability reporting.
It includes 3 universal standards that apply to all organisations and 33 topic-specific standards that are applicable only based on an organisation’s materiality. Through its materiality assessment, an organisation assesses its operations for issues that can affect it and determines those that matter most and require to be disclosed.
NSE, however, has also gone ahead to propose a list of mandatory ESG disclosures that listed companies must disclose to facilitate compliance with the CMA code and local regulations.
Some of the topics […]