Egypt Mandates Emissions Disclosure for Major Non-Bank Financial Firms

Egypt has taken a decisive regulatory step by requiring large non-bank financial institutions to disclose their emissions and offset a portion of them through the domestic carbon market.

View of businessmen collaborating in an office at Egypt's New Administrative Capital, analyzing carbon footprint data. AI generated picture.

Under Decision No. 36 of 2026, issued on 15 February, the Financial Regulatory Authority (FRA) introduced compulsory annual greenhouse gas reporting for non-bank financial firms with issued capital or net equity above EGP 100 million (approximately $2.09 million).

The measure covers Scope 1 emissions from direct operations and company vehicles, alongside Scope 2 emissions linked to purchased electricity and cooling. Disclosures must follow internationally recognised accounting frameworks and be verified by accredited third parties.

Initial reports are due by the end of June 2026. Thereafter, filings must align with each firm’s fiscal year-end cycle. Failure to comply may trigger administrative sanctions and could affect operating licences, effectively elevating climate disclosure from voluntary practice to a condition of market participation.

A further requirement introduces a mandatory offset threshold. Affected institutions must purchase emission-reduction certificates equivalent to roughly 20% of their reported emissions within 90 days of submission. These credits must be sourced exclusively from Egypt’s regulated voluntary carbon market, which falls under FRA supervision.

The market currently comprises about 170,000 issued carbon certificates, 34 registered projects and eight accredited verification bodies. By linking offset demand directly to licensing obligations, regulators aim to strengthen liquidity, enhance credibility and anchor long-term participation. The Egyptian Exchange previously launched Africa’s first regulated voluntary carbon market under the FRA’s mandate.

Minister of Investment and Foreign Trade Mohamed Farid framed the development as part of a broader structural transition. He stated that Egypt has shifted from theoretical sustainability discussions to ‘a comprehensive institutional application of a sustainable financing system.’

Farid described emissions data infrastructure as the ‘cornerstone’ of this framework and reiterated that ‘what cannot be measured cannot be managed.’

According to the minister, coordinated reforms between the FRA and the Central Bank of Egypt have laid the groundwork for sustainability-linked instruments, including green, transition and gender-linked bonds.

For investors and financial executives, the new rule signals a firmer integration of environmental metrics into supervision, capital markets and long-term financial strategy.