MUSCAT, SEPT 17
A workshop hosted by the Muscat Stock Exchange (MSX) on Tuesday, September 17, 2024, focused on strategies to position companies for sustainable growth. The event highlighted the critical role of environmental, social, and governance (ESG) frameworks. Speakers included Monaem ben Lellahom, Group CEO, and Rach el Golli, Senior Advisor at Sustainable Square Consultancy.
During the presentation, the speakers delved deeply into how regulators and stock markets are increasingly pushing listed companies to report on their ESG practices. This push is designed to promote transparency, align with both national and international sustainability agendas, and attract investment. Market regulators are encouraging companies to integrate ESG into their reporting frameworks, which is becoming a global trend.
The speakers highlighted how, in 2024, ESG-focused exchange-traded funds (ETFs) attracted $5.54 billion in inflows by February alone, contributing to a total asset pool of $530.64 billion.
This movement reflects the growing significance of ESG in the investment landscape. While the exact percentage of inflows into ESG ETFs relative to total ESG fund inflows is unclear, the speakers noted that this trend is smaller than the 24 per cent seen in 2020. Nevertheless, this marks a significant step towards the mainstreaming of ESG investments, as investors increasingly prioritise sustainability and ethical practices. This global shift underscores the vital role of ESG in enhancing a company’s attractiveness to investors, improving access to capital, and aligning with future economic regulations.
Monaem ben Lellahom explained that MSX’s initiative aims to enhance awareness within listed companies about the benefits of ESG. "We tried to focus on the business case and the economic impact of ESG to demonstrate its value to listed companies," he shared. Ben Lellahom emphasised that ESG frameworks not only ensure compliance with regulations but also improve investment prospects. “You can attract capital from banks at lower rates and avoid future costs, such as carbon taxation, by embracing ESG,” he added.
He outlined two key strategies to amplify the role of SMEs in a sustainable economy: prioritizing local vendors and fostering social entrepreneurship. “By building the capacity of local SMEs and creating financial products for impact-driven businesses, such as those in circular economy, sustainable tourism, and agriculture, financial institutions can significantly contribute to Oman’s sustainable development,” he noted.
Rach el Golli addressed Oman’s ambitious goals towards decarbonisation and the transition to sustainable finance. “The Sultanate is establishing multiple visions to align with net zero, climate change, and sustainable development,” she remarked. El Golli highlighted the need for capacity building and improved local disclosure metrics to support these efforts. “There is great room for improvement in the disclosure metrics, which are crucial for achieving Oman’s sustainability targets,” she said, adding that the country is already moving in the right direction.
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