Mme Nezha Hayat, Présidente de l’AMMC.

Économie et Finance

CSR Guide of the Moroccan Capital Markets Authority: Exclusive interview with Mrs. Nezha Hayat

le 6 octobre 2017

In the interview that follows, Mrs Nezha Hayat, Chairperson of the Moroccan Capital Markets Authority (AMMC), shares with our readers her vision, as she strives to help listed companies attain international benchmarks because, to quote her, “investors are increasingly attentive to the non-financial aspects of a company such as its environmental impact, labour relations and governance system”.

Similarly, by teaming up with the Stock Exchange, the AMMC has demonstrated these two organisations’ joint commitment to complying with the values shared by the sixty ‘Sustainable Stock Exchanges’ around the world.

La Nouvelle Tribune: Mrs Hayat, after producing the ‘Green Bonds’ guide, the AMMC and the Casablanca Stock Exchange have published a guide on Corporate Social Responsibility (CSR) and Environmental, Social and Governance (ESG) reporting. Is this practice of publishing guides a new approach taken by the capital markets authority to imposing certain management practices on listed companies?

Mrs Nezha Hayat: The regulatory authority has always prioritised support and guidance for issuing companies and the publication of these guides is entirely consistent with this approach as they serve to answer the most frequently asked questions from those concerned. The guides deal with important issues using simple language and adopting an informative style. This culture of publishing guides is quite well established as far as the Markets Authority is concerned, as many important issues, in addition to the ones mentioned above, such as financial communication, IPOs, and shareholders’ participation in general meetings, have been dealt with in the past through specialised guides.

What has considerably changed, however, is the choice of topics. The Authority is now adopting a proactive approach to identifying new trends and best practice on international markets which may serve as growth drivers for our market. These are adapted to the local context and then circulated in the form of a guide, which is intended be informative and practical, to encourage market participants to adopt such practices. This approach also helps the market gradually prepare for potential changes in regulatory requirements.

The way in which the guides are designed and distributed has also changed in a bid to be more inclusive. In fact, we try and get feedback from market participants as early as possible in the process by organising conferences to present the guides. We then consult the public about the draft guides before finalising them.

It is a more participatory approach which ensures that we achieve a broader circulation and use of the AMMC guides.

At the conference, you spoke about the specific context in which this guide was published and highlighted the fact that its recommendations were consistent with Morocco’s commitments to promoting sustainable finance. Could you say more about this?

It is worth recalling that our country, which hosted the COP7 and the COP22, is strongly committed. This can be seen at the institutional level as well as in the various industrial projects developed across the Kingdom.

The financial sector also got in one the act by launching, in 2014, two mutual funds which explicitly incorporate the concept of socially responsible investing within their investment strategies. Green bonds were issued for the first on the Moroccan market in 2016 while the Casablanca Stock Exchange became a member of the United Nations-led Sustainable Stock Exchanges (SSE) initiative, which is a grouping of more than 60 stock exchanges around the world.

More recently, the Moroccan financial services industry’s regulatory authorities and institutions have drawn up and adopted roadmaps to align the industry with sustainable growth and develop sustainable finance in Africa.

The CSR-ESG guide presented today is another example of the financial sector incorporating sustainable growth as one of its priorities and underlines the various commitments made by the Moroccan financial services industry in this area.

In what way are the CSR guide and ESG reporting linked? What are the requirements for listed companies in this area? Is the AMMC going to ensure that they are executed?

The guide was intended to promote a CSR culture among listed companies and it details best practice.

Given that transparency is one of the fundamental principles of every CSR system, the guide explains why ESG reporting is the preferred information channel in this respect. The guide spells out the type of reporting system required so as to report effectively on the CSR systems implemented, the resources allocated to monitoring them and, if possible, the way in which they contribute to financial and economic performance. Lastly, the guide provides a series of recommendations and best practice for drawing up an ESG report.

In what way is management performance a criterion for market performance and would it make a market more attractive?

A market’s performance and attractiveness depend, among other factors, on the performance and the attractiveness of the stocks that are traded on it. However, it is vital a company’s performance is communicated effectively so that it is properly reflected in its market price.

Today, it is obvious that financial performance alone is no longer sufficient to correctly appraise a listed company’s risk-return profile. Investors are more attentive to a company’s non-financial aspects such as its environmental impact, labour relations and governance system.

To make our market more attractive, we need to improve our companies’ performance in all these aspects by encouraging them to adopt a CSR system and, above all, communicate about their performance in this domain through ESG reporting.

Today, it is clear that retail and institutional investors are looking for new investment opportunities on the stock market. How does one reconcile this requirement with the need to highlight non-financial criteria?

The requirement to publish non-financial information provides investors with a more complete picture about the performance, outlook and risks of listed companies. This will enable investors to make well-founded investment decisions.

Furthermore, non-financial reporting highlights more subtle differences between publicly traded companies, resulting in more accurate valuations for these companies.

Lastly, non-financial reporting provides investors with assurance that the investments that they make actually correspond to their specific goals and are, for example, consistent with their approach to socially responsible investing or green investing. Therefore, introducing non-financial reporting will encourage new market segments such as socially responsible investing (SRI) funds to emerge and develop.

At your recent press conference, you announced the forthcoming publication of the General Regulations of the AMMC in the Official Gazette. When do you think these general regulations will be officially implemented?

In fact, by passing this legislation and implementing its provisions, the AMMC will be endowed with a full range of legal guidelines to be able to fully assume its responsibilities. The general regulations will enable us to introduce a full range of tools that we will be able to offer to capital market professionals, publicly traded companies and the media. We hope to roll these out in the very near future!

Interview by Afifa Dassouli

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