JSE: JSE Leading the Way in Sub-Saharan Africa
Recent Gauteng Business News
Johannesburg Stock Exchange is leading the way in sub-Saharan Africa on environmental, social and governance (ESG) reporting
â¢ A handful of Sub-Saharan exchanges are showing initial signs of interest in ESG reporting, which must be supported
â¢ Other exchanges in this region must be encouraged to follow their example
The Johannesburg Stock Exchange (JSE) is leading the way when it comes to environmental, social and governance (ESG) reporting, forging a path for other
sub-Saharan Stock Exchanges to follow, 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 Stock Exchanges in sub-Saharan Africa: capturing intent towards ESG requirements finds that little is being done by stock exchanges to drive sustainability reporting. This is reflected in the reporting practices of listed companies as, with the exception of companies listed on the JSE, the level of sustainability reporting across sub Saharan Africa is very low.
Away from the JSE, the report says that while there are fledgling signs of intent to introduce sustainability disclosures from some of the stock exchanges, there is a need for consistency across the region. Offering recommendations for change, the report urges stock exchanges, listed companies and other stakeholders to develop more extensive and meaningful disclosure requirements, and to increase the quantity and quality of sustainability disclosures from listed companies.
Karen Smal, head of ACCA South Africa, says: “The JSE is the most advanced stock exchange in the region when it comes to sustainability, and others are following such as the Ghana Stock Exchange (GSE), Zimbabwean Stock Exchange (ZSE), the Stock Exchange of Mauritius and the Nigerian Stock Exchange. More can be done – especially by listed businesses too. The benefits of stock exchange-led sustainability initiatives are clear – they meet the information needs of investors, create more transparent and efficient markets, as well as demonstrating leadership in this important area.”
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.”
The report says that stock exchanges need to:
â¢ Introduce mandatory sustainability reporting requirements within listing regulations, or develop voluntary sustainability reporting guidelines for listed companies
â¢ Consult with exchanges – internationally and across Africa - that already have sustainability reporting requirements, to understand how to implement such initiatives
â¢ Consult with asset managers and asset owners to understand investors’ needs when developing reporting requirements.
The report also urges listed companies 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.
Karen Smal concludes: “The responsibility for change is not just on stock exchanges or listed companies – other players, such as governments, regulators, investors and professional bodies like ACCA - have as part to play too. That is why we also recommend that other influential actors can push for change, highlighting examples of good reporting practices in sub-Saharan Africa so that companies looking to report have a benchmark to aim for.”
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