Nearly Half of GSE-Listed Companies Not Reporting on ESG; Mostly Mining Companies

Nearly Half of GSE-Listed Companies Not Reporting on ESG; Mostly Mining Companies

Some 15 companies—48% of companies listed on the GSE—are currently not reporting on their environmental, social, and governance (ESG) performance as demanded by the GSE per its ESG Disclosure Guidelines, which are aligned with globally recognized standards such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB).

Failure of the listed companies to report on their ESG according to accounting giant, KPMG, in its report titled “ESG Reporting in Ghana: Are Listed Companies Meeting Expectations?”, quipped, creates a gap in transparency and accountability, and also hinders investor decision-making.

Adding investors are unable to access the impact of resources invested through sustainability performance, potentially impacting their investment decisions, hence, emphasizing the need for stronger regulatory incentives to encourage greater ESG reporting among Ghanaian businesses.

“No listed company within the forestry and paper, general industries, industrial, metals & mining, life insurance, non-life insurance, oil equipment, services and distribution, pharmaceuticals and biotechnology, real estate investment and services, technology, hardware, and equipment are reporting on sustainability,” KPMG posited.

Of much concern, is the fact that more than half of listed mining companies on the country’s local bourse do not report on their ESG.

This is particularly worrying, in view of the current environmental and social challenges facing the country in relation to the illegal mining menace as formalized and large-scale mining firms would have been expected to prove their commitment to responsible mining with the report of their ESG thereby absolving themselves from blame and linkage to the devastating environmental impacts of mining in the country.

“More than half of entities in the mining industry are not reporting on sustainability, with non-reporting rates of 67%. Also, less than half of entities in the banking and food-producing industries are not reporting on sustainability, with non-reporting rates of 20 percent and 33 percent respectively,” KPMG added.

Listed companies reporting on their ESG are, however, slightly higher than those not reporting on their ESG as currently, more than half of listed companies in Ghana report on sustainability, with a reporting rate of 52 percent.

Of these, 75 percent report through their parent or group companies, while a quarter (25 percent) report as standalone entities. This signifies a recognition of sustainability disclosure within the Ghanaian business environment.

Entities in the Banking industry are the only ones reporting on ESG as a standalone entity and this may be influenced by the early implementation of the Sustainable Banking Principles by the Bank of Ghana in 2019.

According to KPMG, the majority of listed entities reporting on ESG identify material topics, with 44 percent of the listed companies utilizing impact materiality concept for identifying their material topics for ESG reporting purposes, reflecting a strong focus on environmental and social impacts.

Also, 44 percent adopted double materiality, demonstrating a growing awareness of the interconnectedness of financial and non-financial factors.

Meanwhile, only 6 percent of the listed companies prioritize financial materiality for identifying materiality topics for ESG reporting purposes while the other 6 percent of companies do not explicitly identify material topics, highlighting a need for greater transparency.

The survey by KPMG focused on thirty-one (31) listed entities across sixteen (16) industries.

The survey was to assess the current state of ESG reporting among entities listed on the Ghana Stock Exchange (GSE) at a time when sustainability practices are becoming critical to corporate governance and investor decision-making.

With the increasing global focus on ESG and the introduction of the GSE ESG Disclosure Guidelines, the survey aims to evaluate how well-listed companies are aligning with ESG practices.

It also sought to measure the extent to which listed entities are prepared to meet both regulatory requirements and rising stakeholder expectations for transparency, accountability, and sustainable growth.