The Central Bank of Bahrain (CBB) issued an Environmental, Social and Governance (ESG) Module on 5 November 2023, introducing mandatory ESG reporting for listed companies and targeted CBB licensees. The Module is effective immediately, with the requirements applying from the reporting period ending December 2024.
The rules cover all listed companies as well as banks, insurance firms, financing companies and category 1 and 2 investment firms.
GRI-BASED DISCLOSURE
The framework draws primarily on the Global Reporting Initiative (GRI) standards and applies the principle of double materiality. Covered entities must disclose Scope 1, Scope 2 and Scope 3 greenhouse gas emissions and provide a breakdown of their energy consumption by source, including the percentage of renewable and non-renewable energy used. The standard also includes key performance indicators on labour and human rights.
Companies are required to avoid greenwashing, which the rules describe as "making misleading or exaggerated claims about the environmental or social benefits".
FROM VOLUNTARY GUIDANCE TO BINDING RULES
The Module follows a consultation paper on ESG requirements that the CBB issued in August 2023. Bahrain Bourse published voluntary ESG reporting guidelines for listed companies in June 2020, containing 32 reporting metrics, and the CBB carried out an ESG reporting survey in 2022. In January 2023, the GCC Exchanges Committee and the GCC General Secretariat published a unified set of 29 ESG disclosure metrics to align reporting across Gulf exchanges.