Egypt Financial Regulatory Authority published remarks by its chair, Mohamed Farid, reiterating sustainability as a central pillar of its strategy for the non-banking financial sector, alongside ongoing work to develop an updated reporting framework aligned with IFRS S1 and IFRS S2 and to strengthen Egypt’s regulated voluntary carbon market. The update was delivered in the context of the launch of the Arabic version of the OECD guidelines on responsible business conduct for multinational enterprises and a visit to the authority’s office at the General Authority for Investment and Free Zones’ investment services complex. The authority highlighted its existing mandatory disclosure regime introduced in 2021. Board Decision 107/2021 requires non-banking financial activity firms with issued capital or net equity of at least EGP 100m to include environmental, social and governance disclosures in the annual board report attached to annual financial statements, while firms with issued capital or net equity of at least EGP 500m must include both ESG and Task Force on Climate-related Financial Disclosures-aligned climate disclosures. Board Decision 108/2021 requires all companies with securities listed on the Egyptian Exchange to include ESG disclosures in the annual board report attached to annual financial statements. On the voluntary carbon market, the release points to amendments to the executive regulations of the Capital Market Law that treated carbon emission reduction certificates as a financial instrument, followed by creation of a supervisory committee and a series of authority decisions covering verifier and validator listing criteria, listing and delisting rules for carbon certificates on Egyptian Exchanges, accreditation standards for local voluntary carbon registries, and exchange trading and settlement rules. It also reports nine regulatory decisions underpinning the market, five registries, four verification and validation bodies, registration of more than 145,000 carbon certificates and around 21 projects across six project types, and notes that three supervised non-banking financial institutions have issued social bonds. Work is continuing on the IFRS S1 and IFRS S2-aligned framework, alongside further measures to enhance the effectiveness of the voluntary carbon market and build company capabilities for sustainability and climate-related disclosures.
Egypt Financial Regulatory Authority 2025-01-16
Egypt Financial Regulatory Authority sets out IFRS S1 and S2-aligned sustainability disclosure work and updates on regulated voluntary carbon market
The Egypt Financial Regulatory Authority emphasized sustainability for the non-banking financial sector, focusing on an updated reporting framework aligned with IFRS S1 and S2 and strengthening the voluntary carbon market. Board Decisions 107/2021 and 108/2021 mandate ESG and climate disclosures for firms meeting specific capital thresholds. The authority also detailed regulatory developments in the carbon market, including amendments to the Capital Market Law and the establishment of a supervisory committee and accreditation standards.