- framework in the offing
- says SEC will be firm on enforcing disclosure
Conditions are ripe for the introduction of green bonds unto the market, as the Securities and Exchange Commission (SEC) has disclosed plans to introduce rules that will guide the issuance of green bonds in the country.
This, according to Director-General of the SEC, Rev. Daniel Ogbarmey Tetteh forms part of measures aimed at deepening the market, ensuring sustainability and providing value for investors. A green bond, sometimes referred to as a climate bond, is a fixed income instrument that is specifically earmarked to raise money for ‘green’ – climate and environmentally sustainable – projects.
Making this disclosure during a virtual workshop organised by the Ghana Stock Exhange (GSE) and the Global Reporting Initiative (GRI) on the theme ‘Integrating Sustainability and Disclosure in Capital Markets’, Rev. Orgbarmey Tetteh expressed optimism that Ghana’s capital market will be deepened by the introduction green bonds, stating that new instrument will provide immense opportunities for all stakeholders.
“Sustainable financing is here with us, and I can confirm that this year, we as the SEC will be working on the framework for the issuance of green bonds and that will definitely open the way for a lot of activity in that space,” he said.
Whilst commending the organisers and pledging the Commission’s support for the initiative, the DG of the SEC took a moment to stress on the necessity of comprehensive and timely reporting. According to him, inadequate reporting was a key deficiency which led to the events necessitating the financial-sector clean-up, which he described as ‘painful’.
“From the perspective of the regulator, disclosure is important when it comes to protecting investors and protecting the integrity of the market. Disclosure is one of the key tools in the kit of the regulator and we believe this is so because an informed investor is a well-protected investor. It is therefore important for adequate disclosure to be given by issuers and other market operators to the investor.
We would not want to get into some of the factors that led to the painful clean-up that we had to undertake in the financial sector and in particular, the asset management space but clearly, a lack of adequate disclosure was one of the key contributory factors and going forward it is one of the things we are going to insist on firmly,” he stated.
Managing Director of the GSE, Ekow Afedzie said the steps are consistent with the Exchange’s aspiration of transitioning from a frontier market to an emerging market.
“We are seeking to inspire investor confidence and to make sure that we have internationally-accepted reporting standards that we must all abide by… as an Exchange, we are currently reviewing our listing rules and we want to makes sure that by the time we send the rules to the regulator, we will have sections of the rules dealing with sustainability reporting standards,” he explained.
Facilitator at the workshop was Director, GRI Africa, Douglas Kativu who expressed optimism, based on stakeholder response, that guidelines for a sustainability reporting standard will be drafted for consideration in the short-term.
Also, Team Lead, Corporate Sustainability and Responsibility at the Nigerian Stock Exchange (NSE), Olutobi Onajin joined in to offer insight from the NSE’s journey to implementing a comprehensive sustainability reporting standard.
The workshop is part of a series of engagements by the African Securities Exchange Association (ASEA) and the GRI aimed at enhancing ESG integration and disclosure within the region’s capital markets. The session aimed at listed companies, regulatory authorities, brokers, and other relevant market regulators will apprise stakeholders on ESG reporting as well as highlight key material disclosures relating to ESG reporting for GSE listed companies.
Rev. Daniel Ogbarmey Tetteh