GSE tightens rules on green bonds

The Ghana Stock Exchange (GSE), in collaboration with the Securities and Exchange Commission (SEC), has launched new rules to guide the listing and trading of green and sustainable bonds on the market.

Dubbed the Green and Sustainable Bond Rules, the launch of the new guidelines formed part of activities to mark the 32nd anniversary of the local bourse which is being celebrated on the theme: “Investing into a green and sustainable future.”

Green bonds are bonds that support new or existing projects to generate climate or other environmental benefits that conform to green guidelines and standards.

Sustainable bonds on the other hand support new or existing projects that generate both environmental and social benefits that conform to the sustainability guidelines.

The first green bond was issued in 2007 by the European Investment Bank under the label Climate Awareness Bond. Due to the role the finance sector plays in allocating capital efficiently, it remains a key channel for economies all over the world to make a real impact.

As such, the best way to combat climate change while still making profit is through the financial market.

In his keynote address at the launch, the Regional Industry Director for Financial Institutions Group, Africa of the International Finance Corporation (IFC), Aliou Maiga, commended the GSE for showing leadership in green and sustainability finance.

He said climate financing was not only a development imperative but also a significant market opportunity.

“IFC is committed to working with Ghana’s stakeholders to facilitate investments that reduce greenhouse gas emissions and support climate change adaptation,” he stated.

Well timed

Also at the launch, the Director General of the Securities and Exchange Commission, Rev. Daniel Ogbarmey Tetteh, said investing in green and sustainable future was both well timed and opportune.

He said sustainability was a broader topic that hinged on social, human, economic and environmental pillars, none of which could be ignored.

“It is the most pressing challenge of our time for many business leaders. However, there is evidence of a correlation between the long-term success of a business and sustainability.

“Investors across the world are demanding opportunities to invest in companies or investments with strong Environmental, Social and Governance (ESG) markets,” he stated.

For his part, the outgoing Managing Director of GSE, Ekow Afedzie, said sustainable bonds had gained traction globally due to the enormous benefits they brought to the environment and society at large.

He said the GSE had been very committed to sustainability initiatives over the past years, culminating in its recent admission to the UN Sustainable Exchanges in July.

He noted that the launch of ESG Disclosure Manual Guidelines in November this year was also another testament to its commitment to this sustainability journey.

“The launching of green and sustainable bond rules today is another milestone on our sustainability journey. Listed companies in Ghana now can tap into these fast-growing bond investment products to raise capital that can be used in supporting ESG initiatives,” he noted.

Deep liquid markets

In a goodwill message, the Senior Financial Markets Specialist at Financial Sector Deepening, Africa (FSD), Victor Nkiiri, said “at FSD Africa, we see the development of capital markets to an end to increase income and job creation, access to basic services and building of sustainable futures”.

He said deep liquid markets were fundamental to economic growth because they helped channel longer-term domestic savings of an economy to the most productive use.

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