The Borse Dubai (foreground)
The Hawkamah Institute for Corporate Governance, Standard & Poor’s, and the Credit Rating and Information Services of India Ltd recently launched its Environment, Social and Governance (ESG) index initiative, the first of its kind in the Middle East & North Africa region. The International Finance Corporation (IFC) is helping develop the index, which aims to encourage responsible and sustainable investment practices by measuring the environmental, social and corporate governance performance of hundreds of listed companies in the region. It aims to help about 600 listed companies in 11 countries to better understand environmentally and socially responsible investment practices, and the importance of implementing sound corporate governance.
The index will cover the United Arab Emirates, Saudi Arabia, Qatar, Bahrain, Oman, Kuwait, Jordan, Egypt, Morocco, and Tunisia. The project also intends to strengthen and promote environmentally-sustainable and socially-responsible businesses, which will create greater awareness and adoption of ESG practices by companies as well as increase available financing options. Hawkamah noted that financial performance indicators have traditionally marked investment decisions, while the index aims to provide the market and investors with a tool focusing on non-financial indicators that are fundamental in assessing the sustainability of a company’s future performance. The IFC added that the absences of credible and standardized data about business practices relating to social and environmental concerns is a key barrier limiting the flow of socially-responsible investing funds to the region.
Published Date: January 25, 2010