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FRA publishes environmental disclosure models related to sustainability for stock exchange companies


Dr. Mohamed Omran, Chairman of the Financial Supervisory Authority, issued Resolution No. 107 of 2021, regarding the controls for disclosure by companies operating in the field of non-banking financial activities about environmental, societal and governance practices related to sustainability and the financial effects of climate change.

 

The first article of the decision, which was published in the Official Gazette in issue No. 160, stipulated: “Companies operating in the field of non-banking financial activities whose issued capital or net ownership rights are not less than 100 million pounds must fulfill the disclosures related to environmental, social and governance practices related to sustainability in their report. The annual report prepared by its board of directors and attached to the annual financial statements.

 

She added, "Companies operating in the field of non-bank financial activities whose issued capital or net equity is not less than 500 million pounds are obligated to fulfill the disclosures related to the financial effects of climate changes in their annual report prepared by their board of directors and attached to the annual financial statements."

 

The second article of the resolution stipulated that the companies addressed by the provisions of this resolution be given a deadline to complete the incoming disclosures until the date of submitting the financial statements for the fiscal year ending in 2022, and they must provide the authority with a quarterly statement of the actions they have taken or will take regarding disclosures as of January 1, 2022.

 

Dr. Mohamed Omran, head of the Financial Supervisory Authority, explained the reason for issuing this regulatory step, as the capital market in Egypt will be more attractive to many international financial institutions, which have reformulated their strategies to meet the challenges of climate risks and shift towards supporting environmentally friendly projects. Sustainability and climate change disclosure will reveal to them the extent to which the principles of sustainable development are applied, in a manner that generates confidence among investors and enables them to make informed investment decisions by identifying risks and opportunities that may not be monitored by traditional financial reports, which is in line with the world's growing interest in applying the principles and goals of development sustainable since it was announced in 2015.

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