•Safaricom, East African Breweries, Nation Media Group, Bamburi Cement, KCB Bank Group, Kakuzi, and Standard Chartered are the firms that have issued an ESG reports.
•Both NSE and CMA are pushing to end the near-eight years of a listing dry spell at the Nairobi bourse.
The Nairobi Securities Exchange and Capital Markets Authority now want companies to widen disclosures to attract investors, amid a push for new listings at the bourse.
This is in the wake of a continued dry-spell of Initial Public Offers (IPOs) at the bourse, with the last significant one being in October 2015, when the Stanlib Fahari REIT was listed.
The last successful privatisation by the government was the Safaricom initial public offering in 2008.
Disclosures by companies should go beyond financials to attract investments, both NSE and the Capital Markets Authority have said, as Environmental, Social and Governance programmes (ESG) practices gains traction in Kenya.
This not only instills confidence in stakeholders, investors, and consumers but also fosters a culture of accountability and responsibility.
According to the regulator and NSE, there is increasing demand for information (both financial and non- financial) by investors across the globe, which form the core of decision making on investments.
While financial health of companies have been the main basis of decision making in past years, today’s investors also want to understand sustainability programmes within businesses.
This has led to the adoption of Environmental, Social and Governance (ESG) disclosures, especially for publicly listed entities, where ESG disclosures have become a key component of disclosures of non-financial information.
Safaricom, East African Breweries, Nation Media Group, Bamburi Cement, KCB Bank Group, Kakuzi and Standard Chartered are the firms that have issued an ESG reports.
“Disclosure of non-financial information is becoming critical due to the growing concerns around governance practises, business sustainability and the contribution of corporate activity to climate change,” CMA chief executive Wyckliffe Shamiah said yesterday.
The effect of climate change has been witnessed in the recent past with some countries reporting drought leading to loss of human life and livestock, unprecedented floods and massive crop failure in some instances leading to untold human suffering.
With this, businesses are expected to continue reviewing their operations to ensure sustainability.
In Kenya, ESG reporting is gaining traction due to the appreciation of its impact on business sustainability, the regulator said, and how it is beginning to shape decisions among investors, at both institutional and retail level.
NSE issued ESG Disclosures Guidance Manual in November 2021, with investors increasingly making investment decisions after assessing non-financial information, and not just financial performance numbers.
“We expect to see more sustainability reports going forward from our listed companies,” Shamiah said.
At a global level, the International Sustainability Standards Board (ISSB) recently published the final standards for Sustainability-related Financial Information (IFRS S1) and Climate-related (IFRS S2) Disclosures.
It is expected to support investors as they make investment decisions, considering the growing importance of sustainability and climate-related disclosures for publicly listed companies.
NSE chief executive Geoffrey Odundo called for increased adoption of technology in enhancing transparency of sustainability, governance and financial information.
“Whilst other sectors have seen a significant increase and adoption of technology, financial reporting is not where many would prefer it to be,” Odundo said, even as he retaliated on transparency beyond financial reporting.
The two spoke in Nairobi, during the launch of the 2023 edition of the Financial Reporting Award.
Both NSE and CMA are pushing to end the near-eight years of a listing dry spell at the Nairobi bourse, with eyes on President William Ruto’s government if it will live to its word on listing a number of state-owned entities.
The government has previously earmarked about 26 companies for privatisation.
They include the lucrative Kenya Ports Authority and Kenya Pipeline, alongside loss-making lenders, collapsed sugar millers and state hotels that have been run down over the years.