48% of GSE-listed companies fail to report ESG

 

A survey by KPMG has highlighted a mixed picture of Environmental, Social, and Governance (ESG) practices among companies listed on the Ghana Stock Exchange (GSE). While 52% of these firms embrace sustainability reporting, nearly half still lag, underscoring critical gaps in transparency and accountability.

Insights into Sustainability Reporting

The survey reveals that 75% of companies engaged in sustainability reporting do so through their parent or group entities, while only 25% report as standalone organizations. This indicates a growing awareness of sustainability within Ghana’s corporate sector but also reveals disparities in reporting practices across industries.

The banking sector leads ESG efforts, with most entities independently disclosing their ESG data. This leadership stems from the early adoption of the Bank of Ghana’s Sustainable Banking Principles in 2019, which pushed banks to integrate ESG practices into their operations.

Industries such as beverages, telecommunications, oil and gas, and personal goods have achieved full compliance with sustainability reporting. However, compliance rates are inconsistent across other sectors:

• Banking: 80%
• Food Producers: 67%
• Mining: Less than 50%

Several industries, including forestry and paper, pharmaceuticals, real estate, and non-life insurance, have no listed companies reporting on ESG practices.

Challenges of Non-Compliance

Despite progress, 48% of GSE-listed companies fail to disclose sustainability data, creating significant transparency gaps. This lack of reporting hinders investor decision-making and diminishes confidence in non-reporting entities.

Non-compliance also signals missed opportunities for businesses to align with global trends that emphasize sustainability, which is becoming critical for accessing international markets and financing. Companies failing to adopt ESG reporting risk being excluded from these opportunities, limiting their growth and competitiveness.

Regulatory and Sectoral Insights

The findings highlight the role of regulatory frameworks in driving ESG adoption. The banking industry’s strong performance demonstrates how mandates like the Sustainable Banking Principles can influence corporate behaviour. Extending such frameworks to other sectors could encourage broader adoption of ESG standards.

The mining sector, in particular, remains a priority for intervention due to its high environmental impact and low reporting rate. Targeted regulations and stakeholder engagement are needed to accelerate ESG integration in this industry.

Bridging the Reporting Gap

To address these challenges, Ghanaian businesses must make ESG reporting a fundamental part of their operations. Key strategies include:

• Regulatory Measures: Strengthening policies and incentives to drive ESG compliance across all sectors.
• Capacity Building: Offering training and resources to help companies implement effective sustainability reporting mechanisms.
• Investor Advocacy: Encouraging investors to demand ESG disclosures as a prerequisite for funding.

The Way Forward

As global business practices increasingly emphasize sustainability, bridging Ghana’s ESG reporting gap is imperative. Enhanced transparency will not only attract investments but also position Ghanaian businesses to contribute significantly to national and global sustainability objectives.

By prioritizing ESG practices, Ghana’s corporate sector can foster accountability, build investor trust, and drive sustainable economic growth.