This month, Focus looks into what exchanges are doing in sustainable investment field.
The global competition for capital is fierce and intensifying. Yet the information platform on which so much capital market activity is based has not been updated for over a generation. It is time for corporate reporting to step up to the plate, and become a partner, alongside businesses, stock exchanges and providers of financial capital, to help foster the conditions for investment, trade and job creation.
Stock exchanges can play an important role in promoting corporate sustainability reporting. By incorporating sustainability disclosure requirements into their listing standards, stock exchanges can create a strong incentive for companies to measure and publicly disclose their sustainability performance to the market.
The majority of southern African retirement funds will soon be well equipped to integrate environmental, social and corporate governance (ESG) factors into their investment decisions and ownership activities. An industry-led initiative, Sustainable Returns for Pensions and Society, responds to new regulations and aligns with efforts by the Johannesburg Stock Exchange (JSE).
The United Nations Conference on Sustainable Development in Rio de Janeiro this month underlines why responsible investment is becoming an important strategic issue for a growing number of exchanges, and provides a timely opportunity to take stock and contemplate the where we may be heading next.
CBOE Holdings Chairman and CEO William J. Brodsky, the former chairman of WFE, was the only U.S. exchange representative invited to participate in a high-level Institute of International Finance conference preceding February’s G-20 Summit in Mexico City.
While the global financial crisis succeeded in drawing attention to sustainable practices in company behaviour and investor decision-making, responsible investing was a fast-growing phenomenon well before September 2008. In South Africa, a confluence of factors is driving companies and investors to focus on long-term goals rather than short-term gains. A primary motivator had been provided by the Johannesburg Stock Exchange (JSE)’s expansive activity in the area.
During the decade 2000-2009 the largest listed companies in Central and Eastern Europe (CEE) significantly improved their financial and extra-financial reporting, thereby increasing disclosure of information on environmental, social and governance (ESG) indicators. This article outlines the drivers that led to increased ESG disclosure in CEE, presents detailed data on the types of ESG data disclosed and analyzes the trends which developed over the decade.
Although exchanges are still grappling with the consequences of the demutualization process, with innovations in information and communication technologies, and with new demands regarding corporate governance, they adhered to social responsibility standards. Many world exchanges have endorsed sustainable development as foreseen in the Brundtland Report and all its political ramifications.
On May 31, 2010, South Africa established the Integrated Reporting Committee (IRC) under the chairmanship of Professor Mervyn King. The founding members of the committee are The Association for Savings and Investment SA, Business Unity South Africa, Institute of Directors SA, Johannesburg Stock Exchange, and The South African Institute of Chartered Accountants.
As we landed at the airport we got a glimpse of things to come. There was an exclusive welcoming reception for the conference participants, with friendly receptionists handing out “Welcome to Hopenhagen” brochures. The event’s host city of Copenhagen would become for the next two weeks “Hopenhagen”, the city of hope where the world would gather in December of 2009 to discuss the future of the planet at the 15th United Nations Climate Change Conference (COP 15).
Global media attention was firmly focused on the Danish capital for two weeks in December last year as world leaders gathered in an attempt to come up with solutions to probably the greatest challenge yet faced by mankind: How to reverse the damage that we are doing to our planet as a result of our thirst for energy.
As the UN-backed Principles for Responsible Investment (PRI) continues to see tremendous growth in signatories and business commitment, there is increasing interest expressed by investors in the role of regulators and quasi-regulators in encouraging higher standards of corporate conduct and transparency. To explore how exchanges can contribute, the PRI Initiative, along with the UN Global Compact and UNCTAD, are convening a meeting on Sustainable Stock Exchanges at UN Headquarters in New York on 2 November.
Many exchanges are adopting proactive commercial strategies in response to growing investor interest in environmental, social and governance (ESG) issues and global sustainable development challenges such as climate change, according to a new report published this month by the WFE.
BM&FBOVESPA will start annual compensation of its greenhouse gas emissions that cannot be reduced, thus becoming carbon neutral. This initiative is being backdated to 2011 and 2012 and seeks among other things to encourage the adoption of best sustainability practices by listed companies and by the market as a whole. This course of action is also in line with the Exchange’s Sustainability Policy – approved by the Board of Directors in 2013 – and cements the commitment to business initiatives related to climate change.
The Global Reporting Initiative will officially launch its Focal Point South Africa at the Johannesburg Stock Exchange next week, with a mission to make sustainability reporting standard practice for companies and organizations in South Africa and the wider region.
BSE Ltd. has been the first amongst global peers to join five other leading exchanges that have publicly committed to promoting sustainable investment practices. The other exchanges such as the Brazilian stock exchange BM& FBOVESPA, Egyptian Exchange (EGX), Istanbul Stock Exchange (ISE), Johannesburg Stock Exchange (JSE) and NASDAQ OMX made a commitment towards improving sustainability at the SSE, Sustainable Stock Exchanges 2012 global dialogue in Rio de Janeiro earlier this year.
İMKB Chairman & CEO İbrahim M. TURHAN participated in the Sustainable Stock Exchanges (SSE) 2012 Global Dialogues meeting organized jointly by the United Nations Global Compact, United Nations Conference on Trade and Development (UNCTAD), UN Principles for Responsible Investment (PRI), and United Nations Environment Programme (UNEP) Finance Initiative.
BM&FBOVESPA, NASDAQ OMX, the Johannesburg Stock Exchange (JSE), the Istanbul Stock Exchange (ISE) and the Egyptian Exchange (EGX) signed a commitment to responsible investment and to publishing information about companies listed on these markets, at the Rio +20 United Nations Conference on Sustainable Development.
BM&FBOVESPA has been elected the most sustainable Latin American exchange (Best Sustainable Stock Exchange 2012) in the `Exchanges & Brokers Awards’ promoted by UK-based financial magazine World Finance. The award was created in 2007, with voting by the magazine’s international readership.
Indian markets witnessed the launch of the first-ever live Carbon Index BSE-GREENEX, at the hands of Dr. (Shri) M Veerappa Moily, Hon’ble Minister of Corporate Affairs, GoI at BSE today.
BSE Ltd. (Formerly Bombay Stock Exchange Ltd.) in association with gTrade (supported by GIZ promoted by Federal Republic of Germany, Observer Research Foundation and IIM Ahmedabad) has constructed BSE-GREENEX - designed specifically to promote green investing, with emphasis on financial performance and long term viability of companies. It is based upon purely quantitative and objective performance signals to assess carbon performance. BSE-GREENEX includes top 20 companies based on Green House Gas Numbers, Free Float Market capitalisation & Turnover.
Mexico’s stock exchange recently announced the launch of its new sustainability index, which in addition to the FTSE4Good Index and the Dow Jones Sustainability Index, is only the third of its kind in the world. With a total stock value of $450 billion, Bolsa Mexicana de Valores (BMV), is the second largest financial exchange in Latin America.
SocialFunds.com -- Bolsa Mexicana de Valores (BMV), Mexico's stock exchange and the second-largest exchange in Latin America with a total value of stocks of more than $450 billion, announced today the launch of a new sustainability index. The methodology and assessment framework behind the index will be provided by EIRIS and the research firm's Mexican partner, Ecovalores.
Business and investment leaders today call for a new approach to corporate reporting in a landmark Discussion Paper, called Towards Integrated Reporting – Communicating Value in the 21st Century, published by the International Integrated Reporting Committee (IIRC).
Integrated Reporting will provide more comprehensive and meaningful information about all aspects of an organization‟s performance and position, presented in a much clearer, more concise and more user friendly format. In particular it will demonstrate the links between an organization‟s financial performance and the social, environmental and economic context within which it operates.
The Stock Exchange of Thailand (SET) joins hands with three organizations to attract alternative energy businesses into the capital market, enhancing national energy stability and strengthening Thailand’s economy.
On 1 September 2011, the European Energy Exchange (EEX) and the Eurex Exchange will introduce a new incentive model for the emissions market which aims at strengthening the EEX CO2 market in the competition with other trading platforms. The model targets the secondary market trading and is designed to increase the attractiveness of EEX prices (tight spreads) and hence liquidity of the markets.
NYSE Euronext (NYX) announced that it is making the entire company carbon neutral. Building on its existing energy efficiency and conservation efforts, the company announced that it has purchased renewable-energy certificates and carbon offsets that together neutralize the remaining environmental impact of the company’s global operations, making it the only global exchange operator and technology provider to achieve such a status.
(Paris, 26 September 2011). The World Federation of Exchanges (WFE) announced that the recipient of the WFE Award for Excellence this year will be Professor Mervyn King, the incoming Chairman of the International Integrated Reporting Committee (IIRC). South Africa native Professor King is designated for this Award in recognition of his work in leading national commissions on corporate governance reform, and for driving forward a financial reporting framework that is better able to accommodate the complexity and need for transparency in this period of financial and economic turmoil – an Integrated Report.
(11 October 2010, Paris) Chairmen and Chief Executives from more than 68 of the world’s leading exchanges gathered in Paris this week for the 50th General Assembly and Annual Meeting of the World Federation of Exchanges (WFE
This publication has articles from different professionals on sustainability as well as the cmplete version of the WFE report on exchanges and sustainable investment prepared in August 2009.
On 2 November 2009, more than 100 top executives from around the world met at UN Headquarters in New York. The goal is to encourage responsible long-term approaches to investment.
Paris, France (2 November 2009) – The World Federation of Exchanges (WFE) has announced the publication of an interactive report, “Exchanges and Sustainable Investment,” presented today at a United Nations event in New York. A follow up to the WFE’s 2004 report, the research provides an update on the growth of sustainable investments as mainstream products accessible to investors, regulators and companies.
Panel 7 Exchanges advancing environmental, social and governance (ESG) work Summary