The World Federation of Exchanges Publishes Briefing Focusing on Human Rights Protections
Report Highlights Need For "Responsible Business" And Human Rights Definitions
London, 14 April 2022 – The World Federation of Exchanges (WFE), the global industry group for exchanges and CCPs, has published a briefing paper setting out human-rights related disclosure practices within stock exchanges.
The briefing notes that while companies have made real progress in achieving a better understanding of their environmental impact and governance standards, social issues have not necessarily been given the same level of attention. However, the unequal impact of the pandemic has helped to create awareness of and drive momentum behind the need for social change, highlighting issues such as (i) human rights abuses within company supply chains; (ii) the need for gender and ethnic diversity within company boardrooms; and (iii) poor human capital management.
Of the social issues that exist, human rights violations are perhaps seen as the most pervasive and are therefore the focus of this briefing. In particular, the paper takes stock of the following:
- Defining and assessing existing human-rights related initiatives (including the International Labour Organisation (ILO) Declaration on Fundamental Principles and Rights at Work, and the Sustainable Development Goals (SDGs)).
- Examining the shift in the ‘purpose of a corporation’ from focussing on value creation for investors to considering the views of wider stakeholders.
- Making a case for Responsible Business (including a consideration of the UN Guiding Principles on Business and Human Rights).
- Setting out the actions taken to give effect to the UN Guiding Principles (including case studies from member exchanges).
- Forthcoming legislation (for example, on supply chain due diligence) and setting out the steps that the WFE can take to help its members with disclosure on human-rights related issues.
Nandini Sukumar, Chief Executive Officer, the WFE said: “The pandemic has helped to shine a light on social inequality. Our members recognise this and see a role for exchanges to play in guiding both issuers and exchanges towards more meaningful disclosure on persistent issues such as human rights abuses. This briefing paper is a welcome first step, and we look forward to working with our members to further develop their understanding and awareness”.
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About the World Federation of Exchanges (WFE):
Established in 1961, the WFE is the global industry association for exchanges and clearing houses. Headquartered in London, it represents over 250 market infrastructure providers, including standalone CCPs that are not part of exchange groups. Of our members, 35% are in Asia-Pacific, 45% in EMEA and 20% in the Americas. WFE’s 57 member CCPs collectively ensure that risk takers post some $1 trillion (equivalent) of resources to back their positions, in the form of initial margin and default fund requirements. WFE exchanges are home to 47,919 listed companies, and the market capitalisation of these entities is over $109 trillion; around $137 trillion (EOB) in trading annually passes through WFE members (at end 2020).
The WFE is the definitive source for exchange-traded statistics and publishes over 350 market data indicators. Its free statistics database stretches back more than 40 years and provides information and insight into developments on global exchanges. The WFE works with standard-setters, policy makers, regulators and government organisations around the world to support and promote the development of fair, transparent, stable and efficient markets. The WFE shares regulatory authorities’ goals of ensuring the safety and soundness of the global financial system.
With extensive experience of developing and enforcing high standards of conduct, the WFE and its members support an orderly, secure, fair and transparent environment for investors; for companies that raise capital; and for all who deal with financial risk. We seek outcomes that maximise the common good, consumer confidence and economic growth. And we engage with policy makers and regulators in an open, collaborative way, reflecting the central, public role that exchanges and CCPs play in a globally integrated financial system.