The Nairobi Securities Exchange (NSE) has announced plans to launch its first sustainability index to encourage listed firms to adopt high corporate governance standards.
The index will measure listed companies’ environmental, social and corporate governance practices.
NSE CEO Geoffrey Odundo on Friday said the plan to launch the index is informed by increased demand for transparency of NSE-listed firms, especially from international investors.
Mr Odundo said the proposed sustainability index will identify listed companies that meet sustainability reporting requirements.
It would be similar to other market indices such as the NSE All Share Index and the NSE 20-Share Index.
He added that the sustainability indices would provide a transparent avenue through which investors can assess the sustainability practices of listed companies.
“Sustainability performance, broadly measured by environment, social and governance indicators, has in recent years become a mainstream business issue as consumers and investors worldwide demand increased transparency from businesses,” Mr Odundo said.
KBA CEO Habil Olaka added that the Kenyan financial sector needs to be better equipped to critically review financing of those ventures that make it harder to achieve the SDGs, and instead support those that will help us achieve these targets.
