MUSCAT: Following the unveiling of a new platform to facilitate the disclosure of environmental, social, and corporate governance (ESG) standards by listed companies, the Muscat Stock Exchange (MSX) is now preparing the groundwork for the growth and development of green finance in line with the goals of the Omani government’s Financial Sustainability Program.
According to a high-level official associated with this programme, the drive to embrace green finance was initiated following the noble directives of His Majesty Sultan Haitham bin Tarik, which is now gaining momentum under the auspices of the National Program for Financial Sustainability and Financial Sector Development.
Oman’s Vision 2040, which outlines the nation’s long-term development objectives, strongly emphasises sustainability and ESG (Environmental, Social, and Governance) considerations.
The Vision seeks to establish a diversified economy that encourages innovation, provides equal opportunities, harnesses Oman’s competitive strengths, and prioritises environmental conservation and social advancement.
Speaking to the Observer, Mahmood al Awaini, Director of the National Program for Financial Sustainability and Financial Sector, expressed the unwavering dedication of the programme to support this strategic direction.
The Financial Sustainability Program, Al Awaini said, employs a systematic, analytical methodology that commences with a thorough assessment of the current landscape. This includes identifying shortcomings, challenges, and their root causes.
The programme then seeks inspiration from regional and international best practices to propose optimal solutions and the most efficient pathways to achieve their objectives.
A vital aspect of this approach is a meticulous analysis of risks and opportunities, culminating in establishing performance measurement standards for the proposed solutions and their expected economic impact.
This process identifies a significant challenge: more laws, regulations, and guidelines facilitating access to sustainable green financing. To overcome this challenge, there is a pressing need to develop a comprehensive legal framework for this relatively new sector. Additionally, regulations about triple governance, which are environmental, social, and corporate governance, must be established. This would include creating a list of government and private projects that align with these governance principles and qualify for sustainable green financing, often at relatively lower interest rates.
In alignment with this vision, the Central Bank of Oman (CBO) has issued circulars related to financial inclusion per the Sustainable Development Goals (SDGs). These circulars outline the country’s strategy for enhancing access to financial services for all population segments and address climate-related financial risk management and green financing.
The circulars are intended to promote adopting green finance practices by financial institutions.
Various government and private institutions in Oman have made substantial efforts to align their operations with this global trend.
Key players such as the Ministry of Finance (MoF), the Central Bank of Oman (CBO), the Capital Market Authority (CMA), the Oman Investment Authority (OIA), and affiliated companies have been at the forefront of this drive.
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