Administrative Decision 77/2025 made ESG disclosure mandatory for Muscat-listed companies. The hard part — turning compliance into strategy — is only just beginning.
There is a quality to the way Oman moves through transformation that outsiders sometimes mistake for patience. It is not patience. It is deliberateness: a considered preference for building things properly the first time rather than noisily and quickly. That quality is now being tested in a new arena: sustainability reporting.
In June 2025, the Sultanate issued Administrative Decision 77/2025, formally requiring all companies listed on the Muscat Stock Exchange to disclose their environmental, social, and governance practices. The first standalone ESG reports, covering 2024 activities and aligned with GRI Universal Standards and 30 core metrics defined by the Capital Market Authority, were submitted in early 2026. A mandatory regime is now in place. And Oman’s Financial Services Authority has signalled a further phase ahead: the phased adoption of IFRS S1 and S2, the global sustainability standards set by the International Sustainability Standards Board.
The question facing Omani organizations is no longer whether to report. It is whether the structures they build around reporting will be capable of carrying the weight that is coming.
FROM ASPIRATION TO ARCHITECTURE
Across the Sultanate, sustainability is not a new idea. It is woven into Vision 2040, the national development framework launched under the leadership of His Majesty Sultan Haitham bin Tarik Al Said, which places environmental stewardship and economic diversification alongside one another as mutually reinforcing imperatives. Oman has committed to net-zero carbon emissions by 2050. It is targeting 30 percent of electricity from renewables by 2030. It has invested in green hydrogen infrastructure at Duqm, Dhofar, and Al-Jazir. It has jumped 99 places in the global Environmental Performance Index since 2022, reaching 50th out of 180 countries.
These are not marginal achievements. They reflect a national intent that is genuine and deeply embedded in Omani governance values: responsibility toward future generations, balanced development, and a belief that a well-managed economy and a well-managed environment are not in competition.
What is now required, through both domestic regulation and the emerging IFRS S1 and S2 framework, is that this intent becomes legible. A well-crafted narrative is no longer sufficient. The market now asks for structured evidence.
“Sustainability must evolve from a well-crafted narrative into a structured system, one that meets the expectations of the global markets Oman is working to join.”
WHAT THE REGULATIONS ACTUALLY REQUIRE
IFRS S1, the general sustainability disclosure standard, asks organizations to connect sustainability risks and opportunities directly to strategy, governance, risk management, and financial performance. It is not a questionnaire about environmental programs. It is a framework for explaining how sustainability considerations shape the long-term resilience of the business.
IFRS S2 goes deeper into climate specifically. It requires organizations to identify their exposure to physical climate risks and transition risks, to evaluate their strategy under different climate scenarios, and to articulate a pathway to resilience. Scope 1, 2, and Scope 3 greenhouse gas emissions, including those flowing through supply chains, must be measured, tracked, and disclosed with consistency.
REGULATORY MILESTONE: As of mid-2025, more than 20 jurisdictions representing over 50 percent of global GDP have adopted or are formally implementing ISSB standards. The FSA’s planned adoption places Oman within this global convergence.
The four disclosure pillars of S1 (governance, strategy, risk management, and metrics and targets) are designed not as separate chapters but as interdependent components of a single narrative of value. Together, they require an organization to demonstrate that its leadership understands sustainability risks, that its strategy responds to them, and that its performance can be measured over time.
That is a significant structural expectation. And for many organizations in Oman today, it reveals a gap: not in commitment, but in architecture.
THE COHERENCE GAP
Across Oman’s business community, particularly in the energy, investment, and financial sectors, sustainability activity is genuinely underway. Environmental programs are funded. Governance reforms are in progress. Climate commitments have been made at the highest organizational levels. The intention is strong, and it deserves to be acknowledged.
But intention and structure are different things. In many organizations, sustainability data sits in isolated systems, managed by environmental teams, disconnected from finance and unlinked to strategy. Annual reports reflect well-meaning activities rather than integrated risk disclosures. The work is happening; it is simply not being captured in a form that is decision-grade, comparable, or capable of withstanding investor scrutiny.
This is the coherence gap. It is not a shortage of values. It is a shortage of structure that connects those values to evidence.
When IFRS S1 asks a company to explain how climate risks are integrated into its overall risk management framework, it is asking a structural question. When S2 asks for scenario analysis across different time horizons, it is asking whether the organization has genuinely stress-tested its strategy, or simply stated a commitment to resilience without examining what resilience means under different futures.
These are not unfair questions. They are the questions that international capital markets, global partners, and informed investors are now asking of every organization that seeks their engagement. Oman’s ambition, expressed clearly in Vision 2040, is to participate fully and credibly in those markets.
WHY STRUCTURE IS NOT A BURDEN
There is a temptation, when new reporting requirements arrive, to treat them primarily as compliance obligations: burdens to be managed, deadlines to be met. That framing is understandable but ultimately too narrow, and it leads organizations to under-invest in the underlying capability that reporting is designed to reveal.
“The organizations that benefit most will not be those that file the required reports. They will be those that build the governance structures that make the reports meaningful.”
When sustainability reporting becomes a system rather than an annual ceremony, its effects accumulate. Governance becomes clearer because responsibility is defined. Strategy becomes sharper because sustainability risks are connected to financial outcomes, not held separately. Risk management improves because vulnerabilities that previously sat in the periphery (climate exposure, supply chain dependencies, transition costs) are now part of the core analytical framework. Teams align more effectively because they are operating from one coherent direction rather than parallel assumptions.
This is what IFRS S1 and S2 are designed to create: not additional reporting, but better thinking. And for organizations whose values are already aligned with sustainability, as is true of many Omani enterprises whose governance cultures emphasize responsibility, long-term stewardship, and trust, the framework offers something valuable: a way to make those values visible and verifiable to the world outside.
MAKING VISION 2040 LEGIBLE
Oman’s national ambition is not in question. Vision 2040 is among the more thoughtful and comprehensive national development frameworks in the region, integrating economic diversification, environmental sustainability, governance reform, and investment in human capital into a coherent long-term strategy. The Tenth Five-Year Plan, which concluded at end of 2025, implemented 388 of its 416 listed projects. Public debt, which exceeded 60 percent of GDP in 2020, fell to 35–36 percent by 2024–2025. International ratings agencies have responded: S&P Global Ratings and Fitch Ratings both upgraded Oman’s outlook to stable or positive during this period.
What sustainability reporting frameworks like IFRS S1 and S2 provide is the corporate-level equivalent of that national-level discipline. They ask companies to do for their own strategies what Vision 2040 does for Oman as a whole: define the long-term direction, identify the risks, set measurable targets, and demonstrate progress against them.
When Omani organizations build this capability internally, they are not simply complying with external standards. They are extending the logic of Vision 2040 into the way their own enterprises are governed and communicated. They are making their strategies legible to the international investors and partners whose engagement Vision 2040 explicitly seeks.
THE MULTIPLYING EFFECT
There is a compounding logic to sustainability reporting done well. Early adopters, those who build genuine capability rather than minimum-compliance infrastructure, gain a set of advantages that are difficult for late movers to replicate quickly.
Credibility with international capital is one. As more institutional investors embed ISSB-aligned requirements into their investment processes, organizations that can demonstrate structured, assured, comparable sustainability disclosures will find financing terms and partnership conversations materially easier than those that cannot.
Regulatory readiness is another. The FSA’s planned phased adoption of IFRS S1 and S2 means that the organizations building this infrastructure now will not face a sudden transformation requirement later. They will be extending a capability they already possess.
And there is a less visible but equally important benefit: internal clarity. Organizations that go through the discipline of connecting their sustainability efforts to financial performance, risk frameworks, and governance structures tend to emerge with a clearer understanding of where they are genuinely resilient and where they are not. That clarity is valuable regardless of what external audiences see.
Without this structure, the risk is that organizations remain active without becoming aligned. Efforts multiply; coherence does not. Speed increases; direction weakens. In a period when Oman’s economy is navigating genuine transformation, from hydrocarbons toward diversification and from regional markets toward global positioning, coherence is not a luxury. It is a prerequisite.
A CONSIDERED STEP FORWARD
The standard for sustainability reporting in Oman is now formally established. Administrative Decision 77/2025 and the CMA’s 30-metric framework represent the first chapter. IFRS S1 and S2 represent the next.
For organizations across the Sultanate, particularly those navigating the energy transition, building into new sectors, or seeking international partnerships, the path forward is clear. It requires moving from activity to architecture, from narrative to evidence, and from annual ceremony to continuous practice.
This is not a departure from Omani values. It is a continuation of them. The same qualities that have made Oman’s development trajectory admirable, including deliberateness, long-term thinking, and a preference for substance over self-promotion, are precisely what structured sustainability reporting is designed to reward.
The advantage will belong to those who begin with genuine intent, build with care, and demonstrate their readiness not through assertion, but through evidence. That, too, is consistent with the Omani way.
