ESG Reporting In Bahrain

ESG Reporting in Bahrain

In today’s corporate arena, a company’s success is not merely measured in profits; it is evaluated by its wider impact on the eco-system. Enter ESG reporting – a game-changer that evaluates a company’s environmental, social, and governance practices that are beyond just financial metrics.

ESG reporting is not mandatory in all jurisdictions and by all the regulators, however a general trend indicates that majority of the regulators are moving in this direction. Several nations, including parts of Europe, are making strides toward mandatory ESG reporting. The requirements vary widely, with some countries implementing specific regulations while others encourage voluntary reporting. The trend is leaning towards more regulatory measures to enforce ESG reporting as governments recognize its importance in assessing a company’s impact beyond financial aspects.

So, why is ESG reporting such a big deal?

Implementing ESG means setting clear goals and getting all the stakeholders involved. It’s about creating a positive impact on society and protecting the environment by carefully using the resources to safeguard the resources for future generations.

Moreover, it’s a smart way to manage risks. By focusing on the environment, treating people fairly, and having strong governance, companies can spot potential problems early and prevent bigger issues down the road.

Many investors prefer companies with strong ESG practices. So, when companies prioritize ESG, they are not just being responsible but also attracting investment, a win-win for sustainability and business growth.

So, how does this play out in Bahrain?

As per the recent requirement issued by the Central Bank of Bahrain (CBB), various financial institutions are required to implement and report ESG compliance. The CBB defines the timelines and accordingly, the measures are required to be adopted by the in-scope companies to implement the ESG framework and to submit their mandatory first report in 2025 for 2024. Bahrain Bourse is also at the forefront of responsible reporting. The Bahrain Bourse has emphasized the importance of conducting independent reviews of ESG reports.

This recommendation suggests involving internal or external auditors to ensure the accuracy of data collection aligns with the established guidelines and standards.
This proactive measure reflects the Bourse’s commitment to upholding transparency and accountability in sustainable reporting practices within the financial market.

Embracing ESG reporting is not just about being on trend. It’s about showcasing a commitment to sustainability and responsible practices. By doing so, companies in Bahrain can not only gain credibility but also pave the way for a more resilient and competitive future in the global market.

Disclaimer: The purpose of this publication is to create awareness and has been written in general terms. This publication is not for any specific situation and therefore no opinion should be drawn from it for any particular circumstances. Limitless Consulting recommend that the reader of this publication should refer to the official documents referred in the document, seek appropriate professional advice for any particular situation and accepts no liability for any loss as a result of any information mentioned in this publication and this article was previously published in “The Forensic Accountant Pakistan Newsletter”.