13 Aug 2024

 The Acting CEO of the Botswana Stock Exchange (BSE), Mr Kopano Bolokwe, has said the organisation is becoming a world-class securities exchange offering innovative solutions and products, and is a leader in the region and Africa in so far as sustainable finance is concerned

Speaking at the launch of the BSE Sustainability Disclosure Guidance in Gaborone on Friday, Mr Bolokwe  said the BSE was a one-stop shop for sustainable finance.  He said the BSE had launched a number of services, products, incentives and entered into partnerships that allowed customers to access all sustainable finance services under one roof.

He indicated that the BSE had launched the Sustainable Bonds Segment or the Sustainability Segment where Green, Social, Sustainability and Sustainability-Linked Bonds could be issued, and to support this segment it had introduced a discount of 25 per cent for listing of sustainable bonds.

Mr Bolokwe explained that they enabled customers to access the technical and financial benefits and expertise provided by strategic partners who paid for services like the formulation of Sustainable Bonds Framework and Independent Verification, while also assisting with identification and selection of eligible assets as well as post-issuance reporting or impact reports.

 With the launch of the new Sustainability Disclosure Guidance, anchored on international disclosure guidelines like the Global Reporting Initiative, International Financial Reporting Standards and European Sustainability Reporting Standards, Mr Bolokwe said the BSE had provided a tool that listed companies could use to report sustainability information in a uniform manner that promotes comparability.

 He reiterated that the guidelines were aligned to the Artificial Intelligence Model that the BSE and its partners deployed to produce Environmental Sustainability Goals (ESGs) Ratings for listed and even unlisted companies.

Mr Bolokwe reminded the attendants that the disclosure guidelines were not compulsory and were not part of the BSE listing requirements. 

However, he said sustainability was no longer a matter of choice, as only companies that took sustainability into account would be able to access capital at an optimal cost and even achieve higher ESG Rating scores.

 He explained that local asset managers took ESG into account when making investment decisions, as they no longer focused solely on financial returns but also on the impact that the capital created.

Mr Bolokwe added that the disclosure guidance was a critical milestone in enabling the BSE to become a world-class securities exchange.

He said the primary objectives of the guidance were to improve the quality of information available on companies’ sustainability-related impacts, risks and opportunities to enable more informed investment decisions, internally and externally.

 Furthermore, he said another objective was to encourage improved sustainability performance and business leadership in addressing the country’s environmental, social and governance challenges, by enabling stronger accountability.

Mr Bolokwe said the BSE further assisted Botswana companies to navigate the plethora of recent and emerging sustainability-related disclosure standards and  encouraged them to strengthen their disclosure in alignment with these standards.

He said the BSE presented the business case for companies to strengthen their disclosure on sustainability governance and management practices, and their performance on material ESG metrics, noting that the BSE Guidance was designed to be of value both to companies with little or no experience in sustainability and ESG disclosure, as well as to those companies with significant experience in sustainability reporting who were looking for assistance in aligning their disclosures with the latest developments in global reporting standards.

Although developed primarily to assist BSE-listed companies, Mr Bolokwe said the guidance was also intended to be of value to institutional investors and the various entities that they invest in (including non-listed companies and debt issuers), as well as a range of stakeholder groups interested in sustainability disclosure and performance. He said investors were increasingly interested in sustainability issues as this pertains to all their investments, irrespective of whether they were large or small, equities or bonds, listed or unlisted, across all sectors. “All these entities were encouraged to use these Guidelines. As the culture of sustainability disclosures improves in Botswana, enabling us to collate reliable and timely data, we will be able to develop instruments on the Exchange underpinned by this evolution,” he said.

 One such would be the development of the Sustainability Index, with which participants could create Exchange Traded Funds and Independently Managed Funds that give investors access to companies that were trendsetters in so far as Sustainability was concerned, he said.

 Mr Bolokwe acknowledged the support received from the Swiss State Secretariat for Economic Affairs and Swedish International Development Cooperation Agency toward the development of the guidance, who worked closely with the Global Reporting Initiative and its Consultancy Team, comprising of local and international experts.

He thanked the African Securities Exchanges Association for its partnership with GRI that seeks to promote sustainability disclosures in African markets.

Mr Bolokwe said the BSE was the third stock exchange in Southern Africa and the sixth in Africa to publish disclosure guidelines under this partnership. ENDS