New FRA decision Regarding Companies Listed in the EGX submit ESG and Climates Disclosure Reports

FRA issued mandatory regulations to companies listed on the Egyptian Stock Exchange (“EGX”), and companies operating in non-bank financial activities to submit environmental, social, and governance disclosure reports related to sustainability (ESG standards).

After succeeding in completing the approval of the first issuance of green bonds in the Egyptian Stocks Market at a value of USD 100 Million for one of the companies listed in the EGX.

Companies enlisted in the EGX with issued capital or net equity not less than USD 500 Million are required to task force on Climate-Related Financial Disclosure. And that was stated in the first article of the new FRA decision number (18) for year 2021 in 5/7/2021.

The second article stated on giving companies deadline to comply with the performance measurements indicators for those indicators until the financial statement submission date for the fiscal year ending in 2022, with providing the Authority with a quarterly statement of the measures the company has taken or will take regarding these disclosures as of January 1, 2022.

In accordance with the decisions of the Authority’s Chairman of the Board of Directors No. (107), (108) for the year 2021, companies will be given time limit to comply with the performance indicators standards for those disclosures, as companies will initially be obligated to comply or explain the performance indicators for each of the ESG- and TCFD standards and respond to them with (Yes) or (No) - from companies with an explanation of why in the event of non-compliance. This stage continues throughout the compliance period for the application of disclosures, which is expected to end in December 2022, and it will be applied to companies that meet the previously defined criteria.This is in addition to providing these companies to the Authority with a quarterly statement of the measures they have taken or will take regarding these disclosures as of January 1, 2022, so that the Authority can follow up on the efforts made by companies to comply with the disclosures and to know the points on which companies can be trained.

For further information or to discuss Egypt’s new FRA decision (no 108) in more detail, please contact:

Muhammed Abu Daif

m.abudaif@tcmglaw.com

or

Omar Abu Daif

o.abudaif@tcmglaw.com