the exchange in Istanbul had an extensive record of active involvement in promoting social projects, especially the in education where it had a long history of building schools around the country.
It was a coincidence but entirely fitting that the WFE would announce its new Secretary General the very same day that government officials and investors were meeting to discuss the role that stock exchanges could play in promoting sustainable investment.
Hüseyin Erkan, the former Chairman and CEO of the Istanbul Stock Exchange (now known as Istanbul Menkul Kıymetler Borsası - İMKB) was one of the early adopters to sign the United Nations Principles for Responsible Investment (UN PRI). In fact, the exchange in Istanbul had an extensive record of active involvement in promoting social projects, especially the in education where it had a long history of building schools around the country.
The mandate for the new WFE is to be a more visible proponent on issues of market quality, and make more an impact on policy. One tactic is to work closer with regulators and government. At the UN PRI meeting on June 18th, İMKB, JSE, BM&FBOVESPA, the Egyptian Exchange and NASDAQ OMX lost no time in promising to raise the issues of responsible investment with other market operators in the context of the WFE.
WFE has long been involved with corporate governance issues. The evolution from a more financial reporting focus to a holistic environmental, social and governance (ESG) view of corporate strategy began over a decade ago.
The first report published by WFE looked at the actors and issues that were involved in ESG development.
The first report published by WFE looked at the actors and issues that were involved in ESG development. Later, a report was commissioned by Delsus Limited that was the most comprehensive listing at that time of ESG initiatives by exchange operators and markets. But as more indices, ETF, and reporting metrics were rolled out, the question was whether the tangible progress being made was actually making a difference on the ground. How could ESG-inspired investment move from the fringe to the mainstream?
Mr. Dan Siddy of Delsus updates the story and comments on the recent surveys done of exchanges and markets. His comprehensive and global grasp of the challenges facing governments, markets, investors is a clear-eyed weighing of the huge long term issues that remain disconnected to the tremendous power of capital and people.
One market that has connected the dots faster than most is South Africa. Their government and exchange operator have the most developed standards on ESG issues. Louise Gardiner of the South African Pension Funds provides the history of the involvement of institutional investors, and the partners who have helped develop the standards that are now guiding the market.
Responsible Investment is merely one of the issues which will test whether the WFE and the exchanges that constitute it, can overcome not only their own formidable business and economic challenges, but provide thought leadership and expertise for governments and regulators.
Press Release: Leaders of stock exchanges sign sustainability commitment launched by UNCTAD Secretary-General
Rio de Janeiro, 18 June 2012 – UNCTAD Secretary-General Supachai Panitchpakdi today announced a new commitment by stock exchanges to promote long-term, sustainable investment in their markets.
Leading stock exchanges listing over 4,600 companies in developed and emerging markets signed up to this new initiative. The ‘founding signatories’ are the Brazilian stock exchange (BM&FBOVESPA), Egyptian Exchange (EGX), Istanbul Stock Exchange (ISE), Johannesburg Stock Exchange (JSE), and NASDAQ.
Stock exchange leaders committed to the following pledge:
We voluntarily commit, through dialogue with investors, companies and regulators, to promoting long term sustainable investment and improved environmental, social and corporate governance disclosure and performance among companies listed on our exchange.
The five founding signatories of the Sustainable Stock Exchanges Initiative will work together with the UN agencies, through the World Federation of Exchanges, to encourage all stock exchanges worldwide to sign up to the new SSE commitment”.
The Sustainable Stock Exchange Initiative (SSE) is co-convened by UNCTAD, the UN Global Compact, the UN-backed Principles for Responsible Investment, and the UNEP. Its first high-level Sustainable Stock Exchanges Global Dialogue was opened by the UNSG Ban Ki-Moon in New York in 2009, and its second was held at the UNCTAD World Investment Forum in China in 2010. The fourth high-level SSE Dialogue will be held at the UNCTAD World Investment Forum in 2014.
The signing ceremony was one of the highlights of the 2012 SSE Global Dialogue in Rio on 18 June. The stock exchanges’ public commitments are part of new work by the organizers of the SSE to increase their engagement with stock exchanges, investors, and other key stakeholders. Stock exchanges are uniquely positioned at the intersection between institutional investors, listed companies, and security regulators, and can therefore play a key role in promoting responsible investment and sustainable development.
The SSE is an important part of UNCTAD’s Invest in Sustainable Development Programme, which also includes UNCTAD’s Investment Policy Framework for Sustainable Development, the Sovereign Wealth Funds for Sustainable Development initiative, ISAR’s work on corporate transparency and accounting, as well as the Principles for Responsible Investment in Agriculture (in collaboration with FAO, World Bank, and IFAD) and Indicators for the Investment Impact on Sustainable Development (with support from OECD, World Bank, ILO, UNDP and UNIDO). The latter two are also endorsed by the G20 leaders.
For further information, please visit the website of UNCTAD’s Investment and Enterprise Division: www.unctad.org/diae, and www.SSEinitiative.org.