Listed companies will be required to incorporate environmental, social and governance (ESG) performance reporting in their 2024 financial statements, the Malawi Stock Exchange (MSE) has said.
This is in a quest to enhance corporate responsibility and promote sustainable business practices.
MSE revised listing requirements in 2023, such that it incorporated a provision for reporting on ESG performance to align local businesses with global standards and foster sustainable development.
MSE Chief Operating Officer Kelline Kondowe said the listed firms were mandated to incorporate the element of ESG in their reports Global Reporting Initiative (GRI) standards.
“This requirement will become obligatory for the fiscal year ending December 31 2024, compelling companies
to include ESG metrics in their annual reports,” Kondowe said.
Kondowe said the move had been met with optimism, as many listed entities such as Standard Bank and Illovo Malawi already started integrating sustainability issues into their corporate reporting.
She then highlighted the necessity for businesses to act as responsible corporate citizens, balancing profit with their environmental and social footprint, by considering their impacts on society, establishing strong governance and adopting sustainable practices.
Kondowe said the timing of the initiative was relevant, given environmental challenges facing the region, including drought, which has impacted several countries in the Southern African Development Community.
“The financing needed for climate resilience, adaptation and mitigation is vast, yet domestic contributions remain minimal.
“By fostering ESG reporting, we hope to redirect capital market flows towards these critical areas,” she said
In an earlier interview with Times Business, Sycamore Consult Limited Managing Director Audrey Mwala emphasised the role of ESG in sustainable development.
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