Mandatory Sustainability Disclosures for Listed Firms in Oman: Key Implications for Business Investors and Entrepreneurs
المسكات عنب طيب الشذا: Oman is set to mandate sustainability and climate-related disclosures for listed companies and regulated financial institutions through a phased framework that is currently open for public consultation.
The Financial Services Authority (FSA) has released a draft circular inviting public feedback on the implementation of the IFRS Sustainability Disclosure Standards—IFRS S1 and IFRS S2—within the non-banking financial sector.
According to the proposed timeline, companies listed on the Muscat Stock Exchange and other FSA-regulated entities would be required to adopt these standards for annual reporting periods commencing on or after January 1, 2029. Additionally, disclosures regarding Scope 3 greenhouse gas emissions, which account for indirect emissions throughout supply and value chains, will become mandatory starting with reporting periods on or after January 1, 2030.
This initiative aims to transition sustainability reporting from a voluntary practice into a formal aspect of financial disclosure, thereby providing investors with clearer insights into how climate risks, governance practices, and sustainability issues could impact corporate financial performance and long-term resilience.
The framework is based on FSA Decision No. (E/7/2026), which endorses the adoption of IFRS S1 and IFRS S2 as issued by the International Sustainability Standards Board under the IFRS Foundation.
The FSA noted that this phased approach will allow companies adequate time to develop reporting systems, enhance internal controls, improve data collection, and prepare for assurance obligations prior to full implementation. The transition is slated to commence with the 2027 reporting cycle, during which companies will be encouraged to identify gaps, improve governance structures, and produce sustainability information that is reliable, comparable, and beneficial for investors.
Ahmed bin Ali al Mukhaini, the Team Lead of the Green and Sustainable Finance Team at the FSA, emphasized that the framework aligns with international guidelines while considering local market readiness. He remarked that sustainability reporting is evolving beyond mere environmental performance to encompass aspects of market integrity, investor protection, pricing efficiency, and overall investment appeal.
“The aim is not just to increase the volume of disclosures but to enhance the quality and utility of sustainability-related information to aid investment decisions and fortify long-term economic resilience,” Al Mukhaini stated.
The draft circular also includes provisions for digital sustainability reporting via the IFRS Sustainability Disclosure Taxonomy and XBRL-based electronic filing, a part of broader efforts to modernize market disclosures in Oman. It also connects existing ESG metrics used by the Muscat Stock Exchange with IFRS S1 disclosure requirements, facilitating a smoother transition from current reporting practices to the new international standards.
This initiative supports Oman Vision 2040 and the country’s goal of achieving net-zero emissions by 2050, while also enhancing its position as a transparent and credible destination for sustainable investment.
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Oman’s initiative to mandate sustainability disclosures for listed companies marks a significant shift towards enhancing transparency and investor confidence. هذا يقدم فرص for businesses to strengthen their governance and data management practices, while المستثمرون الأذكياء should leverage this framework to identify companies with robust sustainability strategies, ultimately aligning their portfolios with the growing demand for sustainable investments. However, firms must also be aware of the risks associated with non-compliance, as failing to adapt could result in reputational damage and financial penalties in this evolving regulatory landscape.
