The Legislative and Financial Measures Fuelling Ghana’s Drive Towards a Sustainable Future

Governments continue to promote and show strong commitment to advancing ESG in various sectors of national and private business interests, which has led to the creation and improvement of policies and legal frameworks towards advancing their ESG goals. This continuous promotion is due to the high priority placed on ESG by stakeholders in business, social and political activities.

Ghana is no exception to these global trends. In light of its commitment to the United Nations’ Sustainable Development Goals (SDGs), Ghana has introduced significant policy and regulatory measures to support its SDGs. This article discusses recent ESG developments and highlights notable initiatives driving Ghana’s progress toward a sustainable future.

In 2025, Ghana’s efforts concerning ESG and its sustainability goals have improved considerably. Recent trends and developments are explored in greater detail under the following themes:

• new legal framework for environment and climate change;
• emerging ESG trends within Ghana’s financial sector; and
• developments in Ghana’s carbon markets.

New legal framework for environment and climate change

Ghana reached a huge milestone with the passage of a new primary environmental legislation. The Environmental Protection Act 2025 (“Act 1124” was passed on 6 January 2025 to replace the Environmental Protection Act 1994 (“Act 490”) as the primary environmental legislation to protect, improve and regulate environmental issues. Act 1124 also sets standards for environmental compliance and enforcement. The change in the regulatory framework was necessary to ensure that Ghana’s environmental landscape aligns with current trends and addresses Ghana’s international commitments on matters related to climate change.

The key highlights of Act 1124 are discussed here.

Establishment of the Environmental Protection Authority

Act 1124 establishes the Environmental Protection Authority with expanded regulatory powers, replacing the Environmental Protection Agency. The Environmental Protection Authority is established for the purpose of regulating, protecting, co-ordinating and exercising general oversight over all matters relating to climate change and the environment. The new functions of the Environmental Protection Authority include:

• initiating and conducting the prosecution of environment-related offences pursuant to an authorisation by the Attorney-General;
• keeping and maintaining an official bulletin (known as the “Environmental Bulletin”) as a secured electronic database for the publication of relevant information determined by the Environmental Protection Authority;
• serving as the designated national authority for carbon market and non-market approaches, the voluntary carbon market, and domestic carbon pricing instruments;
• certifying environmental management practitioners who provide environmental management services, maintaining a register of individual experts and firms of experts, and publishing the register annually on the website of the Environmental Protection Authority and in the Environmental Bulletin; and
• registration, issuance of permits, and collection of an advance eco-levy for the manufacture of electric and electronic equipment as well as the importation of new and used electrical and electronic equipment.

Establishment of funds

Act 1124 establishes the following funds:

• the Pesticide Management Fund to improve the control and management of pesticides in Ghana;
• the Electrical and Electronic Waste Management Fund to provide financial resources for the management of electrical and electronic waste; and
• the Mitigation Fund to provide funds to implement a bilateral co-operative approval for the creation of authorised internationally transferred mitigation outcomes (ITMOs) and invest in the generation of additional mitigation benefits to increase Ghana’s mitigation outcomes.

It is worth noting that the Electronic and Electrical Waste Management Fund is not a new initiative; it existed under the repealed the Hazardous and Electronic Waste Control and Management Act 2016 (“Act 917”) and was reinstated in Act 1124. The introduction of the Mitigation Fund, however, represents a significant advancement. It provides the Ghanaian government with a domestic financing mechanism to support the country’s unconditional commitments under its Nationally Determined Contributions (NDCs). The Mitigation Fund’s sustainability and growth will, nonetheless, hinge on the level of activity within Ghana’s mitigation landscape ‒ particularly the engagement of private sector actors, whose fees and participation are essential to maintaining the Mitigation Fund’s operations.

Repeal and consolidation of laws

Act 1124 repeals all environmental legislations that regulated environmental protection in Ghana prior to its enactment and consolidates their relevant provisions under various parts of Act 1124. By way of example, Part Two of Act 1124 provides for pesticide control and management, Part Three provides for hazardous wastes and other wastes, Part Four deals with electrical and electronic waste, and Part Five covers climate change. Consequently, Act 917 has been repealed by Act 1124, as Act 1124 mandates the Environmental Protection Authority to regulate hazardous and electronic waste.

Advance eco-levy for electrical and electronic equipment

Persons who manufacture electrical or electronic equipment or import new or used electrical or electronic equipment into Ghana are required to register with the Environmental Protection Authority, obtain a permit, and pay the prescribed eco-levy to the Environmental Protection Authority. The eco-levy is to be paid on items specified in Act 1124, which include new or used pneumatic tyres, air conditioning machines, refrigerators, freezers, electrical screwdrivers, fans, medical, surgical or laboratory sterilisers, cream separators, dishwashing machines, ploughs, weighing machinery, dry cleaning machines, drilling machines, etc.

The payment of the eco-levy may be waived by the Environmental Protection Authority for:

• persons who manufacture electrical and electronic equipment for export only; and
• importation of used electrical and electronic equipment for recycling purposes.

Climate change and carbon markets

Part Five of Act 1124 covers climate change and carbon markets, which is in line with Ghana’s obligations under Article 6 of the Paris Agreement. Act 1124 mandates the Environmental Protection Authority to support the formulation of adaptation plans that enhance the resilience and adaptive capacity of human and ecological systems to the impacts of climate change and integrate climate change disaster risk reduction.

To promote and enhance Ghana’s climate change efforts and programmes, Act 1124 mandates the Environmental Protection Authority to serve as the designated national authority for the carbon market and non-market approaches, the voluntary carbon market, and domestic carbon pricing instruments. To this end, the Environmental Protection Authority is required to co-ordinate the preparation, review and communication of the international climate change reports required of a party to the United Nations Framework Convention on Climate Change (UNFCCC) and subsidiary protocols, agreements, accords or treaties to the UNFCCC.

Act 1124 further establishes the Ghana Carbon Registry (GCR), a digital platform that serves as a database for carbon market project activities within and outside Ghana. The GCR is also required to track the transfer and use of ITMOs, facilitate the listing and registration of mitigation activities and voluntary carbon market projects, and provide a record of all ITMOs activities and ITMOs issued. Additionally, the GCR is to host and provide public access to all information and activities related to ITMOs. Act 1124 also establishes the Mitigation Fund to provide financial support for implementing a bilateral co-operative approach for the creation of authorised ITMOS.

The above-mentioned provisions in Act 1124 emphasise Ghana’s determination and commitment towards achieving its SDGs and promoting sustainable economic development.

That said, considering the complex and cross-border nature of carbon markets (which typically involve international contracts, regulatory compliance challenges, and environmental integrity concerns), the lack of a proactive dispute resolution mechanism under Act 1124 (such as a specialised dispute resolution desk within the Carbon Market Office of the EPA) may create both legal and commercial vulnerabilities. However, Act 1124 authorises the sector minister to issue regulations to facilitate its effective implementation. This provision offers a significant opportunity to develop a comprehensive protocol for managing climate and carbon market disputes in Ghana. Establishing a strong dispute resolution system will be vital to maintaining market confidence, safeguarding stakeholder interests, and upholding the overall integrity of Ghana’s growing carbon market ecosystem.

Emerging ESG trends within Ghana’s financial sector

In 2025, two major frameworks emerged in both the banking and insurance subsectors to strengthen Ghana’s financial system. These frameworks are discussed here.

The ESG Guidelines for the Insurance Industry in Ghana

In consideration of the critical role the insurance industry plays in promoting sustainability and responsible investing in Ghana, the National Insurance Commission issued the ESG Guidelines for the Insurance Industry in Ghana (the “Guideline”) in December 2024. The Guideline provides a framework for integrating ESG principles into the industry’s operations, underwriting practices, investment practices, and stakeholder engagement.

The Guideline primarily applies to insurers and reinsurers operating in Ghana – although it may provide insights for intermediaries and other stakeholders in the industry. The Guideline encourages insurers and reinsurers to embed consideration of the financial risks from ESG-related exposures in their governance arrangements and decision-making. Insurers are also required to incorporate the financial risks from ESG-related exposures into their existing financial risk management practice and to promote transparency and fairness (among other things). The principles to be adopted in insurance practice and reporting are discussed as follows.

i) General principles

The general principles in the Guideline are environmental stewardship, social responsibility, governance standards, materiality, and responsible investment. The combined effect of the principles is that insurers and reinsurers must consider sustainable underwriting, climate change and resource use, carbon footprint reductions, diversity and inclusion, community engagement, customer welfare, human rights and labour standards, financial inclusion, ethical conduct and compliance, risk management, stakeholder engagement, corporate governance structures and board oversight in their decision-making. Insurers are also required to conduct materiality assessments to identify and prioritise ESG factors that have the potential to materially impact business.

ii) Specific principles

The specific principles in the Guideline are those that are critical for the implementation of ESG practices in the insurance industry. These are ESG governance, ESG management systems, ESG risk management, and stress testing and scenario analysis. Under the specific principles, insurers are required to have robust governance structures that enable them to identify, manage, monitor and report risks they are exposed to at the business and industry level, implement ESG management systems, and report all relevant risks to their respective boards and senior management. The specific principles also require insurers to develop internal capabilities to conduct scenario analysis and stress testing on ESG-related issues.

iii) Reporting and disclosure

The Guideline requires insurers to disclose ESG issues (including materiality assessment reports) in accordance with best practice, international reporting frameworks and Ghanaian-specific guidelines. The reports should cover – at minimum – the environmental impact (carbon emissions and resource use), governance practices (board oversight, risk management, and compliance and ethics), and social practices (diversity and inclusion, employee welfare, stakeholder engagement and product responsibility).

Ghana’s Biodiversity Finance Initiative

In April 2025, the Biodiversity Finance Initiative (“BIOFIN”) – a global initiative led by the United Nations Development Programme (UNDP) to support countries in the development and implementation of tailored biodiversity finance plans – was launched in Ghana. The programme marks a significant step in the country’s efforts to advance environmental sustainability and biodiversity conservation by providing finance that supports such activities. BIOFIN will enable Ghana to mobilise resources for biodiversity protection to contribute towards the achievement of the country’s SDG goals.

Following the launch, a steering committee for BIOFIN was inaugurated to spearhead the implementation of BIOFIN in Ghana. At its inaugural meeting in July 2025, a co-chair of the steering committee revealed that the Ministry of Finance is developing an integrated conservation framework that seeks to align biodiversity finance with national climate policy. This will embed nature-based solutions and sustainable investment mechanisms into broader national planning and support the implementation of Ghana’s Nationally Determined Contributions (GH-NDCs), the SDGs, the Sustainable Ocean Plan, and targets under the Kunming-Montreal Global Biodiversity Framework.

ESG certification programme

The Chartered Institute of Bankers (CIB) – in collaboration with the International Finance Corporation (IFC), the Environmental Protection Authority and the Swiss State Secretariat for Economic Affairs – developed and organized an ESG certification programme for the financial sector. The initiative aims at introducing sustainability principles into financial decision-making to align the Ghana’s banking practices with global standards and investor requirements. The ESG certification programme is structured into six modules over a ten-week period and modules include social impact assessment, corporate governance, regulatory compliance, ethical investment strategies, and sustainable finance frameworks.

Apart from this programme by the CIB, the Carbon Market Office intends to partner with other stakeholders to organise the Carbon Finance Academy Masterclass for project developers, financiers, academics, public servants and industry practitioners.

Developments in Ghana’s carbon markets

The promulgation of Act 1124 is a huge step by Ghana towards the achievement of its obligations under Article 6 of the Paris Agreement and meeting the SDGs.

As discussed earlier, Act 1124 has provided the legal framework for the activities of the GCR, with clear functions to track the transfer and use of ITMOs and to facilitate the listing and registration activities and voluntary carbon market projects (among other things). Act 1124 has also established the Carbon Market Committee to approve procedures for the operations of the GCR. These procedures include procedures related to:

• the eligibility of mitigation projects for the voluntary carbon market; and
• the recognition of recommended independent assessment entities accredited either under an international crediting standard or under national modalities for the accreditation of an independent assessment entity.

Ghana–Switzerland bilateral agreement

Ghana and Switzerland signed a bilateral climate agreement at COP26 in Glasgow on 24 November 2020 to regulate the co-operation between the two countries and establish a legal framework for the implementation of greenhouse gas mitigation activities under Article 6.2 of the Paris Agreement. The basis for this bilateral agreement is Ghana’s confirmation of the additionality of the mitigation project to its NDC, as well as an agreement to make corresponding adjustments to the national emissions registry. Projects under the Ghana–Switzerland bilateral agreement are sourced under the Klik Foundation track and the UNDP track and currently stand at 14 projects.

In 2025, the focus is on the implementation and monetisation of mitigation outcomes under these projects. One such project is the “Transformative Cookstove Activity in Rural Ghana” mitigation project, which issued Africa’s first ITMOs under the Paris Agreement. Details of the project are as follows.

i) Africa’s first ITMOs issuance under Paris Agreement’s Article 6.2 for NDC use

Switzerland and Ghana achieved a milestone under Article 6.2 of the Paris Agreement through the issuance of ITMOs for the “Transformative Cookstove Activity in Rural Ghana” project. This project marks the first time ITMOs have been issued for NDC use for mitigation activity in Africa.

The ITMOs were purchased by the Klik Foundation directly from the ACT Group, the project owner. The adjusted ITMOs of 11,733 ITMOs minus the Overall Mitigation of Global Emissions (OMGE) contribution levied by Switzerland were issued to the Klik Foundation’s account in the Swiss Emissions Trading Registry on 7 July 2025. The Klik Foundation will use the ITMOs to fulfil its obligation under the Swiss CO2 Act, which will in turn be used by Switzerland towards its target under the Paris Agreement. As a result, Ghana has committed to adjusting its greenhouse gas inventory by the amount of mitigation outcomes transferred to Switzerland to avoid double counting.

ii) About the project

Ghana has included improved cookstove activities in its whitelist for carbon markets as additional measures to those implemented under the unconditional NDC to the Paris Agreement. Ghana’s Improved Cookstoves (ICS) mitigation activity is a greenhouse gas mitigation project from project co-developer and implementer Envirofit International that improves the lives of citizens. The technology reduces smoke and toxic emissions in individual households by up to 80% and reduces cooking fuel costs by as much as 60%. The stoves are produced in Ghana at a below-cost price subsidised by carbon finance provided by Spark+ Africa Fund. The stoves are offered with access to revolving consumer credit funds provided through established Village Loan and Savings Associations. The production and distribution are undertaken by Envirofit Ghana.

iii) Requirements for the project

The greenhouse gas mitigation project has been designed to prevent risk of over-crediting through Envirofit’s newly developed usage and performance monitoring protocol. The project takes a conservative approach to measuring the fraction of non-renewable biomass (fNRB) – a key metric of abatement – at 30% by default. This measurement can be changed if the updated and regional values are available and both Ghana and Switzerland agree to the change.

Ghana–South Korea implementation agreement

The technical negotiations of the bilateral agreement on carbon markets between Ghana and South Korea have been concluded and both countries have met the country participation requirements. The final draft agreement has been submitted by the Ministry of Environment, Science and Technology to the cabinet for consideration. Following cabinet approval, the agreement will be submitted to Parliament for approval before signing. In the meantime, there are five projects on clean cooking, waste management and water treatment undergoing onboarding and feasibility studies for future development pending the approval of the bilateral agreement.

Outlook

In 2025, Ghana has made significant strides in ESG, with new environmental legislation establishing a carbon market registry and an eco-levy on electrical and electronics equipment. The country has also been positioned as a regional leader through its issuance of ITMOs and active carbon market projects. This and the other developments discussed in this update showcase Ghana’s determination to strengthen transparency, boost investor confidence and improve regulatory framework to foster the achievement of the country’s sustainability goals. Ultimately, Ghana is setting a solid foundation for the ongoing transition to a low-carbon and climate-resilient economy in pursuit of a sustainable net zero future in line with global developments.