The Financial Regulatory Authority (FRA) has issued Decision No. 36 of 2026, mandating non-banking financial institutions (NBFIs) to disclose their annual carbon emissions and offset a portion of their footprint. The move, announced on February 15, is a decisive step toward institutionalizing Environmental, Social, and Governance (ESG) standards across Egypt’s financial ecosystem.
Under the new regulations, companies with issued capital or net equity exceeding EGP 100 million must submit an annual carbon footprint report. These disclosures must adhere to the measurement standards of international Scope 1 (direct emissions from operations and vehicles) and Scope 2 (indirect emissions from purchased electricity and cooling) .
The FRA stipulates that these reports must be verified by accredited bodies and submitted by the end of June 2026, with subsequent filings aligned with each company’s fiscal year-end.
A critical pillar of the decision is the obligation for firms to offset approximately 20% of their total disclosed emissions. This must be achieved by purchasing carbon emission-reduction certificates from the FRA’s regulated voluntary carbon market within 90 days of the report’s submission. The FRA is the main market regulator for all non-banking financial entities, like those working in brokerage, asset management, insurance, and consumer finance, among others.
Failure to comply with these disclosure and offsetting requirements will subject the firm to administrative problems, as the FRA has made compliance a mandatory condition for maintaining operating licenses.
The decision aims to provide strong momentum to Egypt’s voluntary carbon market by stimulating demand and leveraging the regulatory infrastructure established since 2021. The market currently boasts a robust supply base, including 170,000 carbon certificates currently issued, 34 registered projects providing credits, and 8 accredited verification bodies overseeing data integrity.
By embedding carbon into Egypt’s financial framework, the government authorized the FRA to oversee its issuance and enabled the Egyptian Stock Exchange (EGX) to launch Africa’s first regulated voluntary carbon market. This classification is what empowers the FRA to enforce the 20% offset requirement as a formal condition for corporate licensing.
