AMMAN — The Securities Commission launched the ESG Code for ASE20 firms on Wednesday under an "apply and explain" approach, with a plan to gradually extend its requirements to other listed companies.

 

Companies comprising the Amman Stock Exchange’s ASE20 index will be required to comply with a new environmental, social and governance (ESG) code from the 2027 financial year, introducing mandatory sustainability reporting and enhanced corporate governance requirements.

 

The new framework covers board composition, sustainability and climate-related disclosures, risk management, internal controls and investor protection, while aligning corporate reporting with international sustainability standards.

 

Companies subject to the code will be required to issue standalone annual sustainability reports. Boards must include female representation, while independent directors must account for at least one-third of board membership. The code also requires boards to have expertise in sustainability and climate-related risks.

 

It provides five board committees covering governance, sustainability, audit, risk, and nominations and remuneration, as well as provisions on conflicts of interest, professional conduct and ethics, auditing, compliance, transparency and disclosure.

 

The code adopts sustainability disclosure standards issued by the International Sustainability Standards Board (ISSB), including IFRS S1 on general sustainability-related financial disclosures and IFRS S2 on climate-related disclosures.

 

The Commission said applying the standards would improve the reliability of sustainability reports issued by listed companies and make disclosures more comparable internationally.

 

JSC Chairman Imad Abu Haltam said sustainability had become a key factor in competitiveness, investor confidence and long-term growth.

 

He said the code establishes a new benchmark for the capital market by aligning corporate practices with international sustainability standards, helping strengthen investor confidence and attract sustainable investment.

 

Abu Haltam urged boards and executive management teams to integrate sustainability principles into corporate decision-making, adding that the Commission would continue providing regulatory support for implementation.

 

The code was developed under the Netherlands-funded MENA Private Sector Development Programme in cooperation with the International Finance Corporation (IFC), capital market institutions and other stakeholders.

 

IFC Country Manager for Jordan Marcel Rached, said the framework could help attract investment, reduce risks and create new opportunities for corporate growth. Stronger sustainability practices can also enhance company value, support expansion and contribute to job creation, he added.

 

The Commission said the framework forms part of broader efforts to advance sustainable development and green finance, strengthen corporate governance and risk management, and improve transparency around sustainability-related risks and opportunities.