QSE’s Chief Executive Officer, Rashid bin Ali Al Mansoori
The Qatar Stock Exchange (QSE), which was among the first stock exchanges in the world to encourage transparency and disclosure by promoting the digitalisation of environment, social and governance (ESG) data, is planning to make it mandatory for listed Qatari firms to report their ESG data on the QSE online platform within the next two years, a top official has said.
Globally, investors and asset managers are increasingly incorporating sustainability and ESG factors, which are the non-financial factors that determine the ability of a company to create value in the long term, into their investment decisions. Studies show that companies which effectively communicate their sustainability and ESG strategies are more likely to improve their capital raising abilities and have an overall competitive advantage.
In Qatar, plans are underway to make it mandatory for the listed firms to disclose their ESG reporting, which will likely be enforced by the country’s regulatory body, said QSE’s Chief Executive Officer Rashid Bin Ali Al Mansoori while talking to The Peninsula on the sidelines of the 3rd Qatar Financial Markets Authority Conference which concluded in Doha recently.
Asked on the timeframe for the enforcement of mandatory ESG reporting, he said: “Maybe it should not exceed two years. Companies now recognise the importance of ESG reporting, and it’s important for their investors to comply with ESG rules. And as we also know globally, investors are now becoming smarter about where they put their money. They are looking to invest in green, environment-friendly companies and companies complying with ESG rules. And now, many of the international index providers have launched their ESG indexes. So this is a very good sign”.
To date, out of the 47 listed Qatari firms on the QSE Sustainability and ESG Dashboard, as many as 15 firms have disclosed incomplete ESG data, while 32 firms have not disclosed their ESG data report on the online platform.
“Qatari companies are working in that direction. We see companies that voluntarily disclose their ESG reports because they are aware and are exposed to international requirements. Companies that do not follow suit still need to be educated and informed. But now, we’re giving them a chance to turn things around and then we will enforce (the planned policy). Also, as a stock exchange, we’re now trying to hold some conferences about ESG to increase awareness (in the business sector),” Al Mansoori added.
Paul Andrews, Secretary- General of the International Organization of Securities Commissions, which is the worldwide association of national securities regulatory commissions, said transparency is a crucial component on ESG reporting, and added that Qatar is set up for openness and transparency in disclosing ESG information.
“There’s been a real move of late in the world around the issue around transparency. Some regulators are now mandating that ESG disclosures be made to investors. There are becoming more and more regulatory and supervisory requirements about disclosure issues. I think it’s taking some time of course, but it’s moving definitely in the right direction. There are many advantages in the sense that you give investors information about the issues that the company is facing, how it’s handling those issues, and what it plans to do about them going forward. And here, it seems that Qatar is set up for openness and transparency in the sense of disclosing information. Transparency is a crucial component, and I think we’ll see more and more reporting of these types of issues in the near future,” Andrews added.
With the support of the Qatar Financial Markets Authority, the QSE launched its online platform Sustainability and ESG Dashboard in 2018 to help listed companies to communicate their ESG and sustainability performance to investors and other relevant stakeholders. The online platform also seeks to improve the attractiveness of individual companies and the QSE as a whole to international investors.
