The Ministry of Economy and Finance (“MEF”) issued Prakas No. 034 on Environmental, Social and Governance Disclosure (the “Prakas on ESG Disclosure”) on 10 May 2024. Following a 24-month transition period, the disclosure requirements under the Prakas become mandatory with effect from 10 May 2026, marking a significant step in formalizing ESG reporting obligations in Cambodia’s capital markets.

Scope of Application
The Prakas on ESG Disclosure applies to companies listed on the main board of the Cambodia Securities Exchange (“CSX”) (“Listed Companies”). At present, there is no equivalent mandatory ESG disclosure regime applicable to non-listed companies in Cambodia.

Key Disclosure Requirements
Listed Companies are required to make ESG disclosures in accordance with the reporting template prescribed by the Prakas. The disclosures focus on different aspects depending on the sector:

– Securities Sector
The focus is on disclosure of corporate governance, environmental risks, and corporate social risks.

– Banking Sector
The focus is on disclosure of corporate governance. For banks and financial institutions which are part of the Cambodia Sustainable Finance Initiative (“CSFI”), the focus also extends to environmental and social aspects.

– Infrastructure Projects and Environmentally Sensitive Businesses
For infrastructure projects and businesses with operations that may adversely affect the environment and natural resources, the focus is on the disclosure of environmental and social impact. It is also anticipated that the focus will expand to climate change.

Reporting Format and Annual Report Integration
Listed Companies must make their ESG disclosures publicly accessible and incorporate them into the company’s annual report in 2027, covering the company’s key activities, targets, and metrics for 2026. Listed Companies may provide supplementary disclosures in Table B of the Prakas as deemed necessary.

Compliance Through Internationally Recognized Frameworks
Where a Listed Company prepares and discloses sustainability reports based on internationally recognized frameworks and standards – such as IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) – such reports shall be considered compliant with the reporting template prescribed by the Prakas. The Listed Company may choose to:
– Attach the entire sustainability report to the annual report; or
– Include a statement in the annual report providing a link to the sustainability report.

Implementation Timeline
– 10 May 2024 – Prakas on ESG Disclosure issued by the MEF
– 10 May 2026 – Disclosure requirements become mandatory
– 2026 – First reporting year covering key activities, targets, and metrics
– 2027 – First annual report containing the mandatory ESG disclosures

Implementation Considerations
Listed Companies, as well as companies preparing for listing on CSX, should ensure that internal ESG governance, data collection processes, and reporting infrastructure are in place ahead of the 2026 reporting cycle. Subsidiaries of foreign parent companies that are already subject to international ESG disclosure regimes may benefit from leveraging existing group-level reporting frameworks. Companies engaged in infrastructure projects or sectors with potential environmental impact should pay particular attention to the expanded scope of disclosure expected in this area.

For Assistance
Listed Companies and companies considering a listing on CSX, as well as banks, financial institutions, and businesses operating in environmentally sensitive sectors, should consult with their legal and compliance advisors to assess the applicability of the Prakas on ESG Disclosure to their operations and to develop an appropriate ESG reporting strategy aligned with both Cambodian regulatory requirements and any applicable international standards.