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Communiqué from the Maldives: Navigating Sustainability Challenges through ESG Governance and Resilience
Insights from the
Maldives Capacity Development and Governance Institute (MCDGI)
The Maldives is one of the clearest cases of why Environmental, Social and Governance (ESG) principles must be treated as a national resilience framework rather than a corporate branding exercise. Visionary initiatives on sustainability started in 2014: from the National Adaptation Plan 2014 to Renewable Energy projects, Waste management projects, Coral reef restoration, pollution reduction, Green building standards and now a huge focus on sustainable tourism. Maldives development model depends heavily on tourism, fisheries, imported fuel and coastal infrastructure, while its geography exposes communities and economic assets to sea-level rise, flooding, erosion, coral degradation and freshwater stress. Environmental decline can therefore quickly become a fiscal, social and governance crisis.
Corporate governance has developed in the Maldives through successive Acts of Parliament, formalized by the MMA Act 1981, the Companies Act of 1999, and strengthened by the CMDA Act in 2006 - yet the governance pillar of ESG remained relatively alien until recently. The Capital Market Development Authority (CMDA) Corporate Governance Code in 2014 initially introduced voluntary disclosure, but the revised code of 2021 mandated sustainability reporting to enhance transparency and Governance. However, the “G” in ESG, which is the foundational framework directing a company's leadership, ethics and risk management and providing the checks and balances that allow an organisation to pursue its environmental and social goals safely, was not understood generally.
Subsequently, the CMDA has partnered with UNDP to design an implementation framework. The launch of the CMDA's Maldives Sustainability Reporting Framework in October 2024 was a significant milestone: a pilot phase begins in 2025. This year brought positive momentum where 9 companies included sustainability sections in their reports, most demonstrating a comprehensive approach to ESG disclosure. Moreover, three listed companies have already aligned their reporting to a Sustainability Reporting Framework – a proactive signal.
The first formal awareness of sustainability and integrated reporting was led by the Maldives Capacity Development and Governance Institute (MCDGI) with support from Black Sun Asia, Singapore in 2019, which set an example demonstrating the contribution of the private sector to promote good governance.
Challenges remain. The small market makes truly independent directors hard to secure, weakening board structure and diversity. Aligning leadership pay with long-term, sustainable performance rather than short-term profit, enforcing anti-corruption policies, protecting data privacy and ensuring transparent reporting are all pressing concerns.
The current Sustainability Reporting framework promotes double materiality: companies should disclose both how sustainability risks affect their financial performance and how their activities affect society and the environment. For banks, resorts, utilities and listed companies, credible disclosure improves risk management and helps investors distinguish genuine performance from greenwashing, but it must be supported by independent assurance, reliable data and enforcement capacity. State-owned enterprises need stronger governance systems, and listed companies must rise to the standard of international peers. Moving in this direction, CMDA is actively integrating ISSA 5000-the global standard for sustainability assurance-as part of its Sustainability Reporting Framework implementation by the end of 2026.
The blue economy offers a practical path forward. UNDP estimates that ocean-based activity accounts for more than 36%of Maldivian GDP and supports blended-finance mechanisms for sustainable fisheries, eco-tourism and marine innovation. The priority is to convert natural capital into shared prosperity without degrading the ecosystems that sustain it.
For the Maldives, effective ESG governance ultimately means linking corporate accountability, public-sector reform, climate adaptation and social justice. Resilience will be strongest when sustainability is embedded in how the country plans, finances, regulates and evaluates development. The only effective way to manage the risks of unsustainability, resource depletion, and environmental degradation is by identifying and measuring critical sustainability indicators.
Author: Maldives Capacity Development and Governance Institute (MCDGI
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Institute of Directors India
Bringing a Silent Revolution through the Boardroom
Institute of Directors (IOD) is an apex national association of Corporate Directors under the India's 'Societies Registration Act XXI of 1860'. Currently it is associated with over 31,000 senior executives from Govt, PSU and Private organizations of India and abroad.
Owned by: Institute of Directors, India
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