Only one in four Nairobi Securities Exchange (NSE) listed firms are compliant with environmental, social and governance (ESG) reporting and disclosures.
Fifteen out of the 61 publicly traded firms have so far adopted ESG disclosures following the release of the guidelines on this line of reporting in December 2021.
Safaricom, Bamburi Cement, KCB Group, East African Breweries Plc, Nation Media Group, Kakuzi, Standard Chartered Bank Kenya and Stanbic Holdings are among the firms that have issued an ESG report to the bourse.
Geoffrey Odundo, NSE’s chief executive, who spoke during the financial reporting (FiRe) conference ahead of the annual awards, said reporting isn’t about numbers only but how the company is doing in terms of governance and sustainability.
“We have seen at the exchange, over 30 companies doing integrated reporting and about 15 of which doing sustainability reporting,” said Mr Odundo.
NSE issued guidelines in partnership with the Global Reporting Initiative (GRI), requiring firms to announce how they deal with issues such as community, number of employees, corruption, customers’ data privacy and environmental impact.
The rules were not compulsory and the NSE has only been urging them to adopt sustainability reporting mechanisms to increase profitability and up their investment attractiveness from local and foreign investors.
“Investors are keener on the sustainability of organisations that are in these tumultuous times. What are you doing to remain agile and those that remain agile can produce better results,” added Mr Odundo.
A Global Economic Crime and Fraud Survey for Eastern Africa report from PricewaterhouseCoopers (PwC) shows that one of the newest economic crimes is ESG fraud, which relates to misrepresentation of its factors and implementation.
Examples of internally influenced ESG fraud are reporting of achievements to meet the expectations of investors, regulators, and customers or to meet individuals’ performance goals also known as greenwashing which happens when money and favours change hands for weaker safety inspections.
