SEC to develop Social Bond Guidelines; over half of listed firms report on ESG indicators
According to the SEC, the guidelines would aim to encourage the development of a credible and transparent social bond market, promote financing for projects that deliver positive social outcomes while ensuring integrity, transparency, and accountability in the issuance and reporting of social bonds.
The Securities and Exchange Commission (SEC) is busy crafting guidelines for Social Bonds, following the lead of the International Capital Market Association's Social Bond Principles. The goal is to foster a trustworthy and clear market for Social Bonds, which should channel funds towards initiatives yielding positive social impacts while maintaining honesty, transparency, and accountability in their issuance and reporting.
Funds for these bonds could go towards affordable basic infrastructure, essential services like healthcare and education, affordable housing, job creation and support for Small and Medium Enterprises, food security, and empowering vulnerable groups. The SEC's strategy to weave sustainable finance into the domestic capital market is detailed in its Capital Market Master Plan (2020-2029), which has three key components: Standardised Disclosure, Credible Green Finance Instruments, and Strong Governance and Enforcement.
These are meant to boost transparency, improve disclosure quality, safeguard investors, curb greenwashing risks, and attract private capital for projects that are good for the environment and society. The SEC supported the Ghana Stock Exchange's ESG Disclosure Guidance Manual in 2022, which uses the Global Reporting Initiative (GRI) Standards as the uniform ESG reporting framework for listed companies.
By using this common framework, the SEC hopes to boost comparability, enhance disclosure quality, and increase investor confidence. Around half of the 39 listed companies now share information about ESG indicators, showing progress but also showing the need for ongoing skill development.
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