Today, Monday, the Financial Regulatory Authority released its annual Sustainability Report for the year 2021, for the fourth consecutive year, and published it on its website.
Through its various divisions, it reviewed its efforts to localize the principles of sustainable development and green financing in the non-bank financial sector, which began in 2018 to build a strong financial sector capable of adapt to climate change and avoid its negative consequences – in line with Egypt’s Vision 2030 – and work according to an effective approach to managing risks and crises. It seeks opportunities for development in which it balances to achieve financial gains, the preservation of the ecosystem and the development of the community, and the acceptance of the rules of governance.
Dr. Mohamed Omran, Chairman of the Financial Supervisory Authority, revealed that this year’s sustainability report included for the first time the government’s disclosure as an institution of its compliance with environmental, social and governance standards related to sustainability (ESG), as the first public authority or body to do so within the framework of providing a role model in this area.
The Authority was keen to prepare the report in accordance with the International Reporting Initiative (GRI), which requires a survey of opinions and the participation of relevant parties to determine priority issues for the Authority as well as for non-bank financial markets, and to connect them. to the Government’s strategy for sustainable development.
At the beginning of the report, the Head of Government emphasized that the government will continue to have a responsibility to locate and integrate the principles and practices of sustainable development into the operations of the non-bank financial sector, which issues securities (shares, bonds and sukuk) worth 280.3 billion pounds in 2021, including the value of the first issue of green bonds In the capital market in Egypt for a company worth $ 100 million, and its responsibility extends to keep up with the periodic disclosure reports of 500 companies from 1 January 2022, so that their disclosure reports speak the same language as the disclosure reports of international companies on their environmental, social and managerial practices related to sustainability and the financial consequences arising from climate change. .
Dr. Omran said that adapting to the new global reality – which is concerned with sustainability approaches – and gaining more flexibility in dealing with the risks of climate change, has forced the government to set its priorities in the coming period; Start by linking sustainability policies with digitization and Fintech, improving the role of technology in addressing and predicting climate risks in the non-bank financial sector, while continuing to encourage companies to issue green and sustainable financial instruments, and encourage the establishment of green investment funds. in collaboration with international organizations.
The insurance sector’s investments, which amounted to £ 131.5 billion at the end of the 2021 financial year, had to take sustainability into account in its investment policies.
He added that in the context of Egypt’s presentation of the upcoming international climate summit COP27 in Sharm El Sheikh, the report monitored the departure of the FRA’s initiative to promote sustainability and its disclosures in non-bank financial activities from local to global. scale by asking the Authority’s chairman in his capacity as chairman of the Growth and Emerging Markets Committee of the International Organization of Capital Markets Supervisory Bodies (IOSCO), all financial market observers in developing countries quickly finalize the issuance of standards for companies’ preparation of sustainability and climate change publicity reports within their markets to become more attractive to many international investment institutions, which have reformulated their strategies to meet the challenges of climate change and the principles of sustainability and the shift towards supporting a green economy e and adopted environmentally friendly projects.
The report was eager to monitor the experience of financial control and its interaction with what the world has seen over the past two years of the repercussions of the Corona virus pandemic, and its impact on slowing the pace of implementation of the sustainable development objectives, and the government’s holding various meetings with the parties concerned to determine the priority objectives for sustainable development for the government, and to specify them in four Objectives are climate action, gender equality, decent work and economic growth, and responsible consumption and production as pillars of sustainability for the authority to adapt to the painful global reality, in addition to linking these objectives to key issues of relative importance in line with the interests of stakeholders and the priority of their impact on the economy, environment and society for the year 2021.
It is represented in the promotion of non-financial disclosures, green and sustainable finance, and leadership in the empowerment of women, which is an increase in the number of members of the female component on the boards of companies subject to the supervision and control of the Authority saw. to 715 female cadres in 2021, a jump of 374 women in 2019 with a growth rate of 91%, while The percentage of female representation on the boards of companies listed in the stock exchange jumped from 191 women in 2019 to 283 women . end of 2021, with a growth rate of 48%.
Dr. Omran also noted that the third section of the “FRA-2021 Annual Sustainability Report” details the government’s efforts to achieve the priority objectives for sustainable development and its responsibility to build the capabilities of non-bank financial sector workers and the government through the introduction of the Knowledge Complex for Financial Culture its affiliate.
Where 86 management programs specialized in management were implemented by the Egyptian Institute of Directors, and 34 programs to refine expertise in non-bank financial activities implemented by the Institute of Financial Services, which benefited nearly eight thousand workers in the sector during 2021, in addition to 14 seminars prepared by the Center The Regional Fund for Sustainable Finance to present the publicity reports on environmental, social and governance practices related to sustainability and to provide an explanation of the performance indicators for environmental, social and managerial publications related to sustainability and disclosures related to climate change.
The report, regarding the “green and sustainable finance axis”, included the watchdog’s zeal to contribute positively to society and reduce negative impacts on the environment, and to allow three types of investment funds to contribute to to invest in the areas of sustainable development, social dimension, women empowerment and environmental activities, which are private equity funds or funds Specialized private ownership involving direct investment in financing or refinancing projects related to sustainable development, the social dimension, women empowerment and enabling environmental activities.
In addition to the quality of debt instrument funds that enable indirect investment and target investment in securities, securitization effects and sukuk that finance projects related to sustainable development, the social dimension, women’s empowerment and environmental activities, and finally charitable funds whose investment policies are aimed at securities related to all areas of sustainable development, grants The three types of investment funds: A reduction of (50%) in exchange for services due for the examination and study of requests for investment documents for which are now being collected.
In addition to preparing for an internal green work environment, water resources are used efficiently, the negative impact of electrical energy consumption is reduced, and a company specializing in waste recycling is used.