S&P Launches New ESG Index for Egyptian Stock Exchange
|March 29th, 2010||
|Contributed by: CRD Analytics|
|This past Tuesday Standard & Poor's and the Egyptian Stock Exchange launched the Egyptian ESG S&P/EGX ESG Index, the first ESG-based index of Egyptian companies. S&P representatives cited growing global ESG awareness as the driving element for the index’s creation. According to Willem Plantagie, Standard & Poor’s Regional Manager for the Middle East, “Sustainability and transparency have become overriding corporate themes worldwide… As awareness of ESG increases, it will be essential for companies to delve into their business practices and strive to improve them.” And not only does S&P acknowledge the impending acceptance of sustainability into mainstream finance, the company hopes this index will accelerate the process globally. Plantagie claims, “…the S&P/EGX ESG index will set a new benchmark for improving sustainability disclosure in Egypt and set priorities for investor engagement in the wider region.”|
These laudable goals belie the substantial improvement needed in ESG transparency among Egyptian companies. Of the index’s top ten holdings only one, Orascom Telecom, has released a sustainability report with a Global Reporting Initiative G3 index. In addition, not one of these top ten companies has publicly reported any quantitative environmental metrics covering total global operations. To calculate the ESG index without public data on GRI metrics, the S&P evaluates corporate practices and collects information from independent sources such as news stories. Hopefully, the creation of this index will encourage more concrete disclosure by the companies on the index and throughout the region.