Ghana makes significant progress in incorporating ESG in financial sector – Absa Bank Financial Markets Index

Ghana has made significant strides in incorporating ESG factors into its financial sector over the past few years, as highlighted by the Absa Bank Financial Markets Index (ABFMI) 2026. This progress is evidenced by the Ghana Sustainable Banking Principles (2019), which encouraged banks to integrate ESG considerations into their lending practices, risk management, and governance structures.

The Ghana Stock Exchange followed suit by releasing its ESG Disclosures Guidance Manual (2022), providing a standardized framework for identifying, measuring, and reporting ESG impacts in alignment with the Global Reporting Initiative Standards.

Moreover, the ABFMI noted that Ghana's banking regulations have expanded beyond sustainability reporting to encompass prudential ESG-risk management. The Bank of Ghana's Climate-Related Financial Risk Directive now mandates regulated institutions to integrate climate-related financial risks into their governance and risk-management systems. Consequently, ESG is no longer viewed solely as a corporate social responsibility concern but has also become a matter of financial materiality and risk management.

A key legal development in Ghana's ESG landscape is the Banks and Specialised Deposit-Taking Institutions Act, which recognizes netting arrangements for eligible financial contracts. The International Capital Market Association (ICMA) confirmed the validity of the Global Master Repurchase Agreement and the enforceability of its close-out netting provisions under Ghanaian law in 2024.

The focus now is on further strengthening this legal framework by promoting the wider use of standard master agreements, such as the Global Master Repurchase Agreement and the Global Master Securities Lending Agreement. This move aims to provide greater legal certainty for repurchase agreement and securities lending transactions and their associated close-out netting provisions.