Amman, Sept. 9 (Petra) -- Companies comprising the Amman Stock Exchange’s ASE20 index will be required to comply with a new environmental, social and governance (ESG) code from the 2027 financial year, introducing mandatory sustainability reporting and enhanced corporate governance requirements.
The Securities Commission launched the ESG Code Wednesday under an "apply and explain" approach, with plans to gradually extend its requirements to other listed companies.
The new framework covers board composition, sustainability and climate-related disclosures, risk management, internal controls and investor protection, while aligning corporate reporting with international sustainability standards.
Companies subject to the code will be required to issue a standalone annual sustainability report, while boards must include female representation and ensure that independent directors make up at least one-third of their membership. The code also requires expertise in sustainability and climate-related risks.
It provides for five board committees covering governance, sustainability, audit, risk, and nominations and remuneration, alongside provisions governing conflicts of interest, professional conduct and ethics, internal and external auditing, compliance, transparency and disclosure.
The code adopts sustainability disclosure standards issued by the International Sustainability Standards Board (ISSB), including IFRS S1 on general requirements for sustainability-related financial disclosures and IFRS S2 on climate-related disclosures.
The Commission said applying the standards would improve the reliability of sustainability reports issued by listed companies and make their disclosures more comparable internationally.
Commission Chairman Imad Abu Haltam said sustainability had become a key factor in competitiveness, investor confidence and sustainable long-term growth.
He said the code establishes a new benchmark for the capital market by bringing corporate practices into line with international sustainability standards, helping strengthen investor confidence and attract sustainable investment.
Abu Haltam urged boards and executive management teams to integrate sustainability principles into corporate decision-making, saying the Commission would continue providing the regulatory support needed for implementation.
The code was developed under the Netherlands-funded MENA Private Sector Development Program in cooperation with the International Finance Corporation (IFC), capital market institutions and other stakeholders.
IFC Country Manager for Jordan Marcel Rached said the framework could help attract investment, reduce risks and open new avenues for corporate growth, adding that stronger sustainability practices can enhance company value, support expansion and contribute to job creation.
The Commission said the framework is part of broader efforts to advance sustainable development and green finance, strengthen corporate governance and risk management, and improve transparency around sustainability-related risks and opportunities.
//Petra// RZ
