ESG-A.1.1

The ESG reporting landscape is in a state of constant change, as companies now face mounting pressure from investors, regulators, and other stakeholders to disclose information relating to their stance on climate change, social issues, and governance factors. This heightened interest has led to a surge in sustainable investments such as ESG funds and Green Bonds, as more and more investors recognise the significance of taking into account the financial and economic ramifications of environmental, social and governance ("ESG") issues when making investment decisions. ESG factors also have an influence on a company's capacity to execute its business plan and produce value in the long run. ESG refers to the following:

ESG-A.1.2

ESG reporting is recognized as one of the diverse approaches accessible for assessing the company's overall performance. It offers insights into a company's performance that extend beyond the information conveyed in financial statements. Investors and other stakeholders seeking to evaluate the long-term sustainability and ethical impact of companies’ operations use such information in their decision-making process.

ESG-A.1.3

Sustainability reporting and ESG are related but distinct concepts. ESG reports conform to a more specific set of criteria that companies can measure and report against, whereas sustainability reporting provides a wide-ranging overview of a company's sustainability initiatives, goals, and strategies, as well as its progress in achieving them. While reporting on ESG metrics is important from a stakeholder perspective, it is imperative that companies proactively implement strategies to improve environmental and social performance, and to ensure good governance practices.

ESG-A.1.4

The Central Bank of Bahrain (“CBB”) views that ESG reporting is an effective tool for stakeholders to better examine a company’s efficiency, sustainability, and risk exposure. The objective of this Module is to establish a uniform framework for listed companies and licensees to disclose their ESG performance and sustainability efforts. Considering that companies are at different stages on their sustainability journey, this document contains information on important aspects of ESG reporting, such as stages involved in creating an ESG report, recommendations, resources, and requirements when preparing the report. These topics collectively offer a thorough approach to ESG reporting and are to be viewed in conjunction with relevant international best practices, frameworks and guidelines referred to within this document (Appendix 2).

Purpose

Legal Basis

Scope