In line with its commitment towards spearheading and promoting sustainable and transparent capital markets, Bahrain Bourse (BHB), a licensed exchange by the Central Bank of Bahrain (‘CBB’) has concluded its participation alongside other global corporations, policymakers, governments, non-governmental organizations and industry experts, at the 28th  Conference of the Parties to the UN Framework Convention on Climate Change (COP28), which takes place from 30th November to 12th  December 2023 in Dubai – UAE with the attendance of HE  Dr. Mohammed bin Mubarak bin Daina, Minister of Oil and Environment, Special Envoy for Climate Affairs, to showcase sustainability efforts and advancements undertaken within the capital markets in the Kingdom of Bahrain.

At COP28, Bahrain Bourse alongside the CBB participated in the panel discussion titled: “Navigating the ESG Landscape: Insights from Bahrain Bourse and the Central Bank of Bahrain” which took place on the 4thof December at Bahrain’s Pavilion. The panel included the participation of Shaikh Khalifa bin Ebrahim Al-Khalifa, CEO of Bahrain Bourse and Abeer Al Saad, Executive Director of Financial Institutions Supervision at the Central Bank of Bahrain (CBB), and was moderated by Kalyan Subramanian, Head of Markets - KPMG Bahrain.

During the panel discussion, the panelists highlighted the rising awareness of ESG issues in the region and the importance of ESG reporting to sustainable growth. The panelists also emphasized the role of regulatory authorities and exchanges in enhancing the implementation of ESG reporting requirements and ensuring sustainable and transparent capital markets. This has resulted in the recent introduction of regulatory framework for ESG reporting by the Central Bank of Bahrain that is applicable on all listed companies and targeted CBB licensees and comes into effect for the reporting period ending December 2024.

Shaikh Khalifa bin Ebrahim Al-Khalifa, CEO of Bahrain Bourse, said, "We are pleased to attend and participate at COP28 to highlight the major milestones undertaken by Bahrain Bourse to enhance transparency and disclosure in Bahrain’s capital market by supporting listed companies’ alignment with Bahrain’s Economic Vision 2030 and the UN Sustainable Development Goals (SDGs). We began our ESG journey with the issuance of the voluntary reporting guidelines for listed companies in 2020 to encourage and assist listed companies in disclosing ESG information. We strongly applaud the steps undertaken by the CBB for introduction of a standardized regulatory framework for ESG reporting, which will bring greater consistency and comparability to ESG disclosures within the market particularly on climate change, as this forms a key milestone towards achieving a net-zero economy. This milestone will facilitate further growth within the wider sustainability ecosystem in capital markets through promoting green finance initiatives and green indices products”.

“The announcements made by the CBB build upon Bahrain Bourse’s efforts in promoting sustainable capital markets, and fall in line with the Kingdom of Bahrain’s commitment towards achieving net zero by 2060 and decarbonization efforts. The ESG mandatory disclosure also builds upon Bahrain Bourse’s commitment as a Partner Exchange Member of the Sustainable Stock Exchanges (SSE) initiative and a member of the World Federation of Exchanges, in which Bahrain Bourse has made formal commitment to drive sustainability in the capital market of the Kingdom of Bahrain,” Shaikh Khalifa added.

Mrs. Abeer Al Saad, Executive Director of Financial Institutions Supervision at the Central Bank of Bahrain said, “We at the CBB recognize the importance of ESG reporting and our instrumental role in enhancing transparency and corporate governance across the Kingdom of Bahrain, as well as its necessity for driving sustainable economic growth and ensuring long-term stability. By introducing the ESG Module, we are setting a clear framework and guidelines that will enable listed companies and financial institutions to effectively measure, report, and manage their ESG performance. The CBB acknowledges that there may be challenges in implementing ESG reporting, particularly in the initial years. However, companies are expected to make reasonable efforts to report Key Performance Indicators, and transparently explain any limitations in reporting and outline the steps being taken to address those limitations. The issuance of the recent ESG Module represents a significant step toward sustainable financial markets and comes in line with Bahrain Economic Vision 2030 and the UN Sustainable Development Goals (SDGs), in accordance with the commitment of the Government of Bahrain. We invite all financial institutions in Bahrain to embrace this transformative journey and collaborate with us in realizing the vision of a more sustainable financial sector.”

Bahrain Bourse issued its ESG voluntary reporting guidelines for listed companies in June 2020, which included 32 ESG reporting metrics. The same year, the CBB issued an ESG Reporting Survey. A year later, in August 2023, a consultation paper was issued by the CBB on ESG Requirements. This was followed up by the issuance of the ESG Module by the CBB on 5th of November effective immediately and will be applicable on all listed companies as well as targeted CBB licensees for the reporting period ending December 2024. The module draws up on global standards and frameworks to ensure effective ESG integration, and incorporates findings from the ESG Reporting Survey as well as the Consultation Paper. Earlier this year, in January 2023, the GCC Exchanges Committee - GCC General Secretariat also published a unified set of ESG Disclosure Metrics to align reporting across GCC exchanges and enhance transparency within capital markets, which included 29 ESG reporting metrics.