MUSCAT: Oman is preparing to make sustainability and climate-related disclosures mandatory for listed companies and regulated financial institutions, under a phased framework now open for public consultation.

The Financial Services Authority (FSA) has issued a draft circular seeking public feedback on the adoption of the IFRS Sustainability Disclosure Standards — IFRS S1 and IFRS S2 — across the non-banking financial sector.

Under the proposed roadmap, companies listed on the Muscat Stock Exchange and other FSA-supervised entities would be required to apply the standards for annual reporting periods beginning on or after January 1, 2029.

Disclosures on Scope 3 greenhouse gas emissions, which cover indirect emissions across supply chains and wider value chains, would become mandatory from reporting periods beginning on or after January 1, 2030.

The move would gradually shift sustainability reporting from a voluntary exercise towards a more formal part of financial disclosure, giving investors clearer information on how climate risks, governance practices and sustainability issues may affect companies’ financial performance and long-term resilience.

The framework follows FSA Decision No. (E/7/2026) on the adoption of IFRS S1 and IFRS S2, issued by the International Sustainability Standards Board under the IFRS Foundation.

The FSA said the phased approach would give companies time to build reporting systems, improve internal controls, strengthen data collection and prepare for assurance requirements before full implementation.

The transition is expected to begin from the 2027 reporting cycle, with companies encouraged to assess gaps, improve governance structures and prepare sustainability information that is reliable, comparable and useful for investors.

Ahmed bin Ali al Mukhaini, Team Lead of the Green and Sustainable Finance Team at the FSA, said the framework was developed in line with international guidance while taking into account local market readiness and proportionality.

He said sustainability reporting was no longer limited to environmental performance, but was increasingly linked to market integrity, investor protection, pricing efficiency and investment attractiveness.

“The objective is not merely to increase the volume of disclosures, but to improve the quality and usefulness of sustainability-related information in supporting investment decisions and strengthening long-term economic resilience,” Al Mukhaini said.

The draft circular also covers digital sustainability reporting through the IFRS Sustainability Disclosure Taxonomy and XBRL-based electronic filing, part of wider efforts to modernise market disclosures in Oman.

It also links existing Muscat Stock Exchange ESG metrics with IFRS S1 disclosure areas, giving listed companies a clearer bridge from current ESG reporting practices to the new international framework.

The initiative supports Oman Vision 2040 and Oman’s target to achieve net-zero emissions by 2050, while reinforcing efforts to position the country as a more transparent and credible destination for sustainable investment.

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