Egypt has introduced mandatory carbon reporting and offsetting requirements for large non-bank financial institutions, formally embedding environmental risk into financial supervision.
An over-the-shoulder view of businessmen working in an office at Egypt's New Administrative Capital, reviewing carbon emission reports. AI generated picture.
Under Decision No. 36 of 2026, announced on 15 February, the Financial Regulatory Authority (FRA) now requires non-bank financial institutions with issued capital or net equity exceeding EGP 100 million ($2.09 million) to quantify and disclose their greenhouse gas emissions annually. The rule applies to Scope 1 emissions from operational activities and vehicles, as well as Scope 2 emissions associated with purchased electricity and cooling. Reporting must follow internationally recognised accounting standards and be verified by accredited entities.
The first disclosures are due by the end of June 2026, with subsequent submissions aligned to fiscal year-end reporting cycles. Non-compliance may result in administrative penalties and could affect firms’ operating licences, signalling that environmental accountability is no longer a voluntary exercise but a supervisory requirement.
A central feature of the regulation is a mandatory offset component. Covered institutions must purchase emission-reduction certificates equivalent to approximately 20% of their disclosed emissions within 90 days of filing. These certificates must be sourced through Egypt’s regulated voluntary carbon market, overseen by the FRA.
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The market currently includes around 170,000 issued carbon certificates, 34 registered projects and eight accredited verification bodies. By linking offset purchases directly to licensing obligations, regulators aim to drive sustained demand and reinforce market liquidity and credibility. The Egyptian Exchange previously launched Africa’s first regulated voluntary carbon market under the FRA’s oversight mandate.
Minister of Investment and Foreign Trade Mohamed Farid positioned the measure within a broader policy shift, stating that Egypt has moved from theoretical sustainability discussions to ‘a comprehensive institutional application of a sustainable financing system.’ He described emissions data infrastructure as the ‘cornerstone’ of the system and reiterated the principle that ‘what cannot be measured cannot be managed.’
According to Farid, reforms across banking and non-bank sectors, undertaken in coordination with the Central Bank of Egypt, have established the foundations for sustainability-linked instruments, including green, transition and gender-linked bonds.
For investors, project developers and sustainability officers, the decision introduces enforceable disclosure standards while reinforcing domestic carbon market architecture. More broadly, it signals Egypt’s intent to position sustainable finance as a structural element of financial regulation and capital market development.
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As Egypt embeds carbon disclosure and mandatory offsets into financial supervision, the market direction is unmistakable. Carbon markets are becoming regulated pillars of capital allocation. With compliance tied to licensing and demand channelled through a supervised voluntary market, quality and verification now matter more than ever. Access alone is no longer sufficient. Integrity, traceability and regulatory alignment will define long-term value.
Green Earth’s portfolio is built for this transition. We combine rigorous project development with transparent monitoring and digital verification. The result is high-integrity, nature-based removals with measurable ecosystem impact at scale. For financial institutions, developers and investors, the imperative is clear: Position capital where compliance readiness, environmental credibility and durable value creation converge.
