Egypt’s FRA requires major non-bank financial firms to disclose, offset carbon emissions

Egypt’s financial regulator has ordered large non-banking financial companies to publicly disclose their carbon emissions and offset a portion of them, in a significant step towards embedding climate accountability in the country’s financial system.

Under Decision No. 36 of 2026 approved by the Financial Regulatory Authority (FRA) board, affected firms must prepare an annual carbon footprint report detailing emissions generated from their activities under internationally recognised Scope 1 and Scope 2 standards.

Scope 1 covers direct emissions, including fuel combustion in generators, company-owned vehicles and on-site industrial operations. Scope 2 includes indirect emissions from purchased electricity, heating and cooling consumed by the company.

Companies will be required to offset 20 per cent of their reported emissions by purchasing certified carbon credits registered in Egypt’s regulated voluntary carbon market within 90 days of submitting their annual report.

The first disclosures must be filed by the end of June 2026 and thereafter submitted annually in line with each company’s fiscal year-end. Emissions data must be reviewed and verified by accredited validation bodies registered with the FRA.

Compliance with the new rules will be a condition for maintaining operating licences, the regulator said. The decision will take effect the day after its publication in the Official Gazette.

The FRA said the measure is intended to embed environmental, social and governance (ESG) practices in the non-banking financial sector and enhance transparency around climate-related risks.

The move is also expected to boost demand in Egypt’s voluntary carbon market, which currently includes around 170,000 carbon credits issued from 34 registered projects and supported by eight accredited verification bodies.

Attribution: Amwal Al Ghad English