TerraLex Cross-Border Guide to Cross-Border Guide to ESG and Sustainable Finance

There are no statutory extra-financial reporting/disclosure obligations on ESG in Tunisia.

The Tunis Stock Exchange (TSE) and the Financial Market Council (CMF) issued an environmental, Social and Governance (ESG) Reporting Guide. This guide targets directors, managers, and executives of listed companies as well as the enterprise’s stakeholders (auditors, staff representatives, shareholders, investors, etc.). It is intended to convince all these stakeholders of the usefulness of the ESG approach for them, for the company and for the community.

The frameworks which are frequently used and recommended (by the Tunis Stock Exchange and the Financial Market Council) for ESG disclosures in Tunisia are the recommendations of the World Federation of Exchanges (WFE), the 17 Sustainable Development Goals (SDGs) adopted by the United Nations and the Global Reporting Initiative (GRI) standard.

Corporate Social Responsibility (CSR) is governed in Tunisia by Law No. 35 of June 11, 2018. This law contains certain recommendations which are not mandatory for companies, except for the provisions of article 2 of the said law which obliges companies to devote funds to carry out programs relating to CSR without determining a minimum threshold. Companies are indeed free to choose the programs as well as the funds necessary for their implementation.

ESG rules in Tunisia have no extraterritorial effect and apply only within Tunisia to entities established in Tunisia.

In Tunisia there are no specific regulations regarding advertising with ESG claims. However, advertising practices are governed by the general provisions of the Tunisian Consumer Law, which prohibits misleading or deceptive commercial practices. Therefore, any advertising making ESG claims must be truthful, accurate and not mislead consumers.

It is not mandatory under Tunisian law to impose specific ESG (environmental, social and governance) rights and/or obligations on suppliers through contractual clauses similar to those in the UK Modern Slavery Act. CSR Law has an incentive character and only exhorts public and private companies to implement internal procedures related to CSR. However, several ESG aspects are covered by different laws and regulations (i.e., Tunisian labor and environment regulations) which oblige the suppliers to comply with some ESG principles.

There is no legal ground under Tunisian law that may allow shareholders and investors to hold a company or its bodies/ representatives responsible for losses due to positive ESG efforts of such company.

Although there is no specific legal ground that may allow shareholders and investors to hold a company or its bodies/ representatives liable for losses due to non-compliance with ESG rules, it is possible for shareholders and investors to hold the directors liable on the basis of the management fault concept.

Although there is no specific legal ground that may allow customers, creditors, or other affected parties to hold a company or its bodies/ representatives liable for losses due to non-compliance with ESG rules (Law No. 35 of June 11, 2018 does not provide any sanction for non-compliance with its article 2), it is possible for customers, creditors, or other affected parties to hold the company liable on the basis of the general legal principles of Tunisian Tort Law.

In addition to Law No. 35 of June 11, 2018, on CSR and the ESG Disclosure Guidelines prepared by the Tunisian Stock Exchange, companies based in Tunisia may still be subject to broader legal frameworks and regulations that indirectly touch upon ESG issues, such as:

1. Environmental regulations: Environmental protection laws and regulations which address issues such as pollution control, waste management, resource conservation, and ecosystem preservation. These regulations impose obligations on companies to comply with certain environmental standards and requirements;
2. Labor and employment laws: labor and employment law and regulations that govern issues such as minimum wage, working hours, occupational health and safety, and non-discrimination. These laws aim to ensure fair and safe working conditions and protecting the rights of employees; and
3. Corporate governance regulations: Companies are subject to corporate governance rules and regulations that promote transparency, accountability, and responsible business practices. These regulations include requirements related to financial reporting, board composition, disclosure obligations, and shareholder rights.

Tunisia has not implemented specific statutory provisions that prohibit or restrict companies from pursuing ESG initiatives.

There are no statutory sustainable finance and investment frameworks regarding ESG indicators in Tunisia.

The ESG Reporting Guide prepared by the Financial Market Council and the Tunis Stock Exchange proposes 32 performance indicators: 32 KPI’s. These indicators encompass energy consumption, energy intensity, energy mix, water and effluent, GES issue and intensity, General policy-environment, General Policy-Climate change, effluents and waste, materials, biodiversity. The guidelines indicate a preference to report conforming to the most relevant indicator per enterprise.

No, there are no such requirements under Tunisian law.

No.

FMCT and TSE joint guidelines impose independent review conducted by competent external service providers as concerns the issuance of “green bonds to investors”. These providers surveil the verification of the sustainability of green and social projects. This review consolidates the clearance of the issuer’s responsibility in the case of the failure to achieve the initially promised results.

In this sense, issuers are bound to communicate truthful documentation to the provider.

No.

Tunisia promotes companies’ environmental, social, and governance (ESG) disclosure to facilitate transparency but does not require it (Law No. 35 of June 11, 2018, on CSR provides mainly recommendations and guidance). Article 2 of the said law obliges companies to devote funds to carry out programs relating to social responsibility without determining a minimum threshold. An implementation decree defining this minimum amount is expected.

In addition, the Tunisian Observatory of the Economy calls for the amendment of Law No. 2018-35 of June 11, 2018, on CSR so as to further encourage companies to be more responsible and to make CSR mandatory.

Tunisia promotes companies’ environmental, social, and governance (ESG) disclosure to facilitate transparency but does not require it (Law No. 35 of June 11, 2018, on CSR provides mainly recommendations and guidance). Article 2 of the said law obliges companies to devote funds to carry out programs relating to social responsibility without determining a minimum threshold. An implementation decree defining this minimum amount is expected.

In addition, the Tunisian Observatory of the Economy calls for the amendment of Law No. 2018-35 of June 11, 2018, on CSR so as to further encourage companies to be more responsible and to make CSR mandatory.

It should be noted also, that “Association Professionnelle Tunisienne des Banques et des Etablissements Financiers” (APTBEF) and the United Nations Global Compact signed a cooperation agreement on June 20, 2019, to launch a structured CSR approach. A roadmap has been drawn up with the aim of supporting banks in their CSR approach, focusing on four areas: human rights, international labor law, environmental protection, and the fight against corruption.

To boost sustainable business growth and private sector investment in Tunisia, IFC recently launched a new program promoting environmental, social, and governance (ESG) best practices in the country's financial, manufacturing and agribusiness sectors.

In partnership with the Swiss State Secretariat for Economic Affairs (SECO), IFC's Integrated ESG Program will work with financial institutions, real sector companies, and industry associations in Tunisia to advance adoption of ESG best practices and strengthen their performance.

The program—IFC's first focused on ESG in Tunisia—will also support banking and financial market regulators, including the Central Bank of Tunisia (CBT) and the Tunis Stock Exchange (BVMT), to improve their capacity to integrate, monitor and enforce ESG standards.

It is expected that Tunisia will follow the global trend and that current regulations would be amended to include ESG specific provisions.