Egypt has ordered large non-bank financial institutions to measure their carbon footprints and offset a portion of their emissions, marking a significant step toward embedding climate requirements into the country’s financial system.
Under the new directive, firms with capital exceeding $2.1 million (100 million Egyptian pounds) must offset 20% of their annual emissions through the purchase of carbon credits, Investment and Foreign Trade Minister Mohamed Farid was quoted as saying Sunday by the Daily News Egypt.
Speaking at a a sustainability conference organized by the International Finance Corporation (IFC), Farid said Egypt has moved beyond the theoretical stage of sustainability toward an institutional framework for sustainable finance across both banking and non-banking sectors.
Regulators have introduced structural reforms in coordination between the Central Bank of Egypt and the Financial Regulatory Authority, aimed at expanding the market for green and sustainability-linked financing instruments and attracting international investment.
Relevant: Africa’s First Carbon Market Now Active In Egypt
Authorities have also established disclosure requirements and periodic reporting obligations for carbon footprints, part of what Farid described as a system built on the principle that “what cannot be measured cannot be managed.”
The framework includes regulatory definitions for green, transition and gender-linked bonds, supporting a growing pipeline of sustainable debt issuance.
Larger companies face more extensive disclosure obligations aligned with international IFRS sustainability standards, reflecting a proportional approach to oversight.
Egypt’s voluntary carbon market (VCM) is also expanding, with about 160,000 credits registered and regulatory and accounting systems for trading now completed, Farid said.
The financial sector will play a central role in funding companies’ transition to lower-carbon operations, while the new offset requirement is intended to integrate environmental considerations directly into investment and financing decisions.
Read more: Voluntary Carbon Market Sees Sharper Price Signals As Integrity Gap Widens, New Report Shows
