Banks lead standalone ESG reporting among listed firms

More than half of the companies (52%) listed on the Ghana Stock Exchange (GSE) report on sustainability, a new report by auditing firm KPMG has indicated.

Out of these, 75 per cent report through their parent or group companies, while a quarter (25 per cent) report as standalone entities. 

This signifies a recognition of sustainability disclosure within the Ghanaian business environment.

The report, however, highlighted that only banks were reporting on ESG as a standalone entity, a situation influenced by the early implementation of the Sustainable Banking Principles by the Bank of Ghana in 2019.

All listed companies in the beverages, mobile telecommunications, oil & gas and personal goods industries report on sustainability; and more than half of entities in the banking and food producer’s industry report on sustainability, with reporting rates of 80 per cent and 67 per cent respectively. 

In recent years, Ghana has made significant progress in promoting sustainable business practices among its financial institutions and publicly listed companies. 

The introduction of the Sustainable Banking Principles (SBP) in November 2019 marked a key moment in the journey toward sustainability. 

Developed collaboratively by the Bank of Ghana (BoG), the Ghana Association of Banks (GAB) and the International Finance Corporation (IFC), these principles established a strong foundation for responsible banking. 

Building on this momentum, in 2022, the Ghana Stock Exchange (GSE), in collaboration with the Global Reporting Initiative (GRI) and the State Secretariat for Economic Affairs (SECO), introduced the GSE ESG Disclosure Guidelines. 

These guidelines encourage listed companies to adopt sustainable practices and transparently report their environmental, social and governance (ESG) activities.

Investor decision-making

The report, titled ‘ESG Reporting in Ghana: Are Listed Companies Meeting Expectations?’, further noted that the 48 per cent of listed companies who were not reporting on ESG created a gap in transparency and accountability, as well as hindered investor decision-making. 

It said investors were unable to access the impact of resources invested through sustainability performance, potentially impacting their investment decisions.

“It also emphasises the need for stronger regulatory incentives to encourage greater ESG reporting among Ghanaian businesses,” the report added.

Insightful findings 

The Managing Director of the Ghana Stock Exchange, Abena Amoah, said the insights gathered from this survey offer a nuanced view into the evolving ESG and sustainability reporting landscape among listed entities.

She said it sheds light on key industry trends, the current progress and the critical areas that require attention as companies in Ghana embrace sustainability reporting.

“The findings of this report are both insightful and promising. 

A significant portion of companies listed on the GSE are now actively reporting on their ESG practices, a testament to the growing emphasis on transparency, accountability and sustainable business practices. 

“This shift reflects the increasing expectations of stakeholders, from investors to regulators, and highlights the need for businesses to integrate ESG considerations into their strategic decision-making,” she stated.

Ms Amoah said the report also emphasises the importance of aligning these disclosures with globally recognised standards, such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB), which are essential for improving the comparability and credibility of ESG data across industries.

She said the GSE was committed to supporting listed companies on their ESG journeys, adding that the launch of the GSE ESG Disclosure Guidelines marked a significant milestone in its efforts to promote comprehensive and transparent ESG reporting. 

“By providing a structured framework, these guidelines will enable companies to report on ESG matters more effectively, ensuring that they remain aligned with both local regulatory requirements and international best practices. 

“We will continue to collaborate with stakeholders across the ecosystem, including investors, regulators and sustainability experts, to drive further improvements in ESG reporting,” she said.

Driving sustainability Partner and Head of Advisory of KPMG, Andy Akoto, also said the firm was committed to driving sustainability reporting forward and helping businesses integrate ESG practices into their core strategies. 

He said the report reflects its continued efforts to assess and improve sustainability standards across the Ghanaian market.

“While our findings indicate that many listed companies are taking steps towards ESG compliance, there remains a significant opportunity for others.

“We stand ready to support our clients on their ESG journey, ensuring they not only comply with regulations but also create long-term value,” he said.