Sub-Saharan Stock Exchanges should introduce requirements for listed companies to report on environmental, social and governance (ESG) matters or develop voluntary guidelines on the topic states a new report from ACCA (the Association of Chartered and Certified Accountants).
Examining stock exchanges in Botswana, Ghana, Malawi, Kenya, Nigeria, Mauritius, South Africa, Uganda, Zambia and Zimbabwe, the report – Stock Exchanges in sub-Saharan Africa: capturing intent towards ESG requirements – says that while there are fledgling signs of intent to introduce ESG disclosures from some of the stock exchanges, there is room for more commitment to be shown and more widespread action on their part. The report urges stock exchanges to to develop more extensive and meaningful disclosure requirements.
The report also finds that with the exception of listed companies on the Johannesburg Stock Exchange (JSE), which is the most advanced stock exchange in the region when it comes to sustainability, the level of sustainability reporting from the largest listed companies across sub-Saharan Africa is very low, with only 13 companies (15%) reporting on sustainability, either through a sustainability report, combined report or integrated report. The ACCA report has called for listed companies in this region to increase the quantity and quality of their sustainability disclosures.
Rachel Jackson, head of sustainability at ACCA, says: 'The benefits of stock exchange-led ESG initiatives are clear – they meet both the evolving information needs of investors and society, as well as create more transparent and responsible companies. It’s an encouraging sign that the Ghana Stock Exchange (GSE), Zimbabwean Stock Exchange (ZSE), the Stock Exchange of Mauritius and the Nigerian Stock Exchange are realising the importance of requiring ESG disclosures. However more can be done across the region for exchanges to recognise the influence they can have in achieving greater corporate accountability.'
The report says that stock exchanges need to:
- Introduce mandatory sustainability reporting requirements within listing regulations, or develop voluntary sustainability reporting guidelines for listed companies
- Consult with exchanges – internationally and across Africa - that already have sustainability reporting requirements, to understand how to implement such initiatives
- Consult with asset managers and asset owners to understand investors’ needs when developing reporting requirements.
Listed companies are also urged to co-ordinate with stock exchanges, and to move beyond charitable and philanthropic activities to integrate sustainability onto corporate strategies so that environmental and social impacts are assessed.
Speaking about the important role of stock exchanges in driving sustainability reporting, Corli Le Roux, head of SRI Index and Sustainability at JSE, says in the report: 'Ultimately, the approach should be up to each individual exchange. The reality is, however, that exchanges have significant influencing potential and are well positioned to exert that influence in a variety of ways, including collaborating with other players across the investment value chain in strengthening the call for greater transparency and advancing engagement on sustainability between companies and their shareholders.'
Rachel Jackson concludes: 'Outside of the JSE, so little is heard about the intentions of sub-Sahara African exchanges to enhance the ESG disclosures of their listed companies. By highlighting such intent, however small, we are hoping it will lead on to more ambitious plans from them, which in turn will provide inspiring examples for the other exchanges to follow. In addition, this work has served as a reminder that multiple disciplines have responsibility for encouraging exchanges to introduce robust ESG reporting requirements, including those from government and the investment community.'
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For more information, please contact:
Alana Sinnen, ACCA Newsroom
+44 (0)20 7059 5807
Notes to Editors
- ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
- We support our 170,000 members and 436,000 students in 180 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. We work through a network of 91 offices and centres and more than 8,500 Approved Employers worldwide, who provide high standards of employee learning and development. Through our public interest remit, we promote appropriate regulation of accounting and conduct relevant research to ensure accountancy continues to grow in reputation and influence.
- Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. We believe that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. Our values are aligned to the needs of employers in all sectors and we ensure that through our qualifications, we prepare accountants for business. We seek to open up the profession to people of all backgrounds and remove artificial barriers, innovating our qualifications and delivery to meet the diverse needs of trainee professionals and their employers.