According to a recent survey conducted by KPMG, a concerning 48% of companies listed on the Ghana Stock Exchange (GSE) have yet to align with Environmental, Social, and Governance (ESG) reporting requirements. The survey highlights a significant gap in corporate responsibility as nearly half of these firms are not integrating essential sustainability practices into their reporting frameworks. While some companies have begun to adopt ESG reporting, the overall compliance rate reflects a pressing need for improved adherence to these guidelines in the Ghanaian corporate sector.
Among the companies that do engage in ESG reporting, the findings reveal that 52% have started to implement sustainability disclosures. However, a notable reliance on external resources exists, with 75% of these companies depending on reports from their parent organizations for ESG information. This reliance diminishes the potential for independent sustainability practices, as only 25% of companies are creating their own standalone ESG reports. This disparity highlights the need for firms to develop their individual sustainability agendas rather than defaulting to generalized disclosures from parent companies.
The survey also identifies discrepancies in compliance rates across various industries. Industries such as beverages, mobile telecommunications, and oil and gas demonstrate a commendable adherence to ESG standards. In contrast, the mining and food production sectors are lagging significantly, reporting non-compliance rates of 67% and 33%, respectively. These figures indicate not just a failure to comply with ESG norms but also a broader issue of corporate accountability, particularly in sectors that have significant environmental and social impacts.
The findings reveal that only 45% of listed companies have integrated sustainability into their board responsibilities, illustrating a disconnect between governance and sustainability objectives. Furthermore, less than half of these firms have adopted globally recognized reporting standards like the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB). These standards are critical for establishing transparency and consistency in sustainability reporting, and their low adoption rates suggest a need for greater awareness and commitment among Ghanaian firms regarding best practices in ESG reporting.
Emerging trends from the survey indicate that carbon reduction targets have been incorporated into the reports of approximately 45% of listed companies, showing a growing recognition of the importance of climate action. Nonetheless, only 39% of these companies identify biodiversity loss as a business risk, pointing to a significant area of neglect in corporate risk assessments. This oversight narrows the scope of corporate responsibility and highlights the need for companies to broaden their focus to encompass not just carbon emissions but also the preservation of ecosystems and biodiversity.
The report recommends several strategies to improve ESG compliance among GSE-listed firms. Key actions include implementing stricter guidelines and incentives for firms to adhere to ESG standards, investing in capacity-building initiatives, conducting materiality assessments, promoting board-level commitments, and fostering stakeholder engagement. By prioritizing these actions, the GSE can enhance accountability and transparency within the corporate sector, ultimately leading to more sustainable business practices and fostering long-term value creation for both companies and society at large.
