The Securities and Exchange Commission of Pakistan (SECP) has made significant advancements in promoting responsible business practices and environmental stewardship by issuing Environmental, Social, and Governance (ESG) Voluntary Disclosure Guidelines for listed companies.
In addition, the SECP has amended the Listed Companies (Code of Corporate Governance) Regulations, 2019, to enhance the oversight responsibilities of the board regarding sustainability priorities. These initiatives underscore the SECP’s commitment to fostering sustainable corporate governance in Pakistan.
The issuance of ESG Guidelines is a key milestone in the SECP’s ESG regulatory roadmap, unveiled in 2022. These voluntary guidelines align with globally recognised sustainability reporting frameworks and provide baseline guidance to listed companies. The guidelines encourage transparent disclosures under the E, S, and G pillars, encompassing environmental impact, social responsibility practices, and effective corporate governance structures. Companies have the flexibility to disclose their ESG performance through a separate sustainability report, integrate ESG information into their annual report, or publish it directly on their website.
The SECP also encourages non-listed companies to adopt these guidelines, fostering a broader culture of sustainability and transparency in the corporate sector.
Moreover, to ensure a safe and respectful work environment, the SECP has introduced significant amendments to the Corporate Governance Regulations. These amendments require listed companies to develop comprehensive anti-harassment policies and comply with the Protection Against Harassment of Women at the Workplace Act, 2010. Additionally, the boards of listed companies are now accountable for setting sustainability priorities, with a proposal to form sustainability committees and align with the SECP’s ESG Disclosure Guidelines.
The SECP adopted a consultative approach in finalising the ESG Guidelines and amendments to the Corporate Governance Regulations, incorporating feedback from all key stakeholders to ensure comprehensive and effective regulations.
These initiatives reflect the SECP’s dedication to advancing corporate governance standards and promoting sustainable business practices in Pakistan, positioning the country’s corporate sector for a more responsible and transparent future.