The Uganda Securities Exchange (USE) is set to introduce new Environmental, Social and Governance (ESG) guidelines for companies to align with global climate change pressures.
Paul Bwiso, the chief executive officer of USE, said the guidelines will be in place by September next year.
“We recently held a consultative meeting where we explained to stakeholders the importance of ESG guidelines, the reporting criteria, and the metrics necessary to attract more financing into the capital markets. This will particularly benefit listed companies on the exchange and help investors better understand the value these companies contribute to the broader Ugandan economy,” Bwiso said.
Several countries, including South Africa, already have established ESG reporting frameworks, such as the Global Reporting Initiative. Bwiso highlighted that the absence of an ESG framework in Uganda has limited the flow of capital to local companies, especially from impact investors who focus on green finance products.
“The introduction of ESG guidelines will enable us to implement initiatives that encourage companies to prioritize sustainability, attract investment, and enhance their business operations. Sustainability is no longer optional; it’s integral to the future of business and the world,” he emphasized.
Bwiso also noted that, traditionally, investments are driven by profitability. However, with sustainability as a core objective, companies can draw more interest from investors.
“It’s not just about doing business for profit. If sustainability is embedded in a company’s operations, it becomes an attractive option for investors,” he explained.
As part of the new framework, USE will also introduce thematic bond rules for sustainability-linked bonds. The exchange has already begun developing regulations for green financing and ESG, which will help companies raise capital in alignment with sustainable projects.
“We believe this initiative will open the door to a new group of investors. Projects linked to green financing and sustainability will receive increased attention and as market players, the stock exchange will work closely with the government and ministry of Finance. Our goal is to support infrastructure financing projects and other sustainable ventures that drive long-term growth for the economy,” he said.