MSCI investors eye Saudi firms adhering to governance standards: Official

Monaem Ben Lellahom, , CEO of Sustainable Square

MSCI’s investors are interested in a healthy investment opportunity, as they keen on investing in the safest Saudi companies in terms of responsibility, ethical practices and quality, CEO of Sustainable Square, Monaem Ben Lellahom told Argaam.

On the sidelines of the Middle East Investor Relations Association - MEIRA 2023 conference in Bahrain, he added that investors contribute to motivating companies in the Saudi market to adopt the practice of environmental and social governance.

Investors are the most important stakeholders required to implement environmental and social governance standards in order to reduce the company's exposure to economic crises.

He explained that companies that apply these standards reduce the margin-at-risk (MaR) and contribute to boosting investment in them as a result of a clear view of their business, communicating with investors, and paying attention to things beyond financial matters.

He indicated that companies in the Saudi market are curious to apply standards, even though there is no mandatory disclosure of the application of standards. Rather, there is a voluntary disclosure by companies.

The Arab region suffered from lack of governance, which pushed some companies to bankruptcy.

Thus, foreign investors are usually looking for companies interested in sustainability across the Arab region.

Lellahom highlighted that many countries in the region depend on the oil economy, while some of them shifted to rely on the non-oil economy for its huge investments and being an alternative energy source.

He stressed the importance of stability in economies and including the oil and gas sector in sustainability standards.

Legislators in the Arab region, as well as all stakeholders will eventually impose on companies the application and disclosure of standards.