The World Federation of Exchanges Responds to Issuer Guidance on Biodiversity related-Disclosure
London, Wednesday 6 October 2021 – The World Federation of Exchanges (WFE), the global industry group for exchanges and CCPs, has commented on the Climate Disclosure Standard Board’s (CDSB) issuer guidance for biodiversity related disclosure.
The WFE supports the role that the CDSB has played to date in the development of climate- related disclosure standards under the Taskforce for Climate-related Financial Disclosures (TCFD), which have been endorsed across the WFE membership. The increased focus on providing issuers with guidance on how to disclose against biodiversity related risk and opportunity is both timely and necessary, as momentum builds around the recent announcement of the Taskforce for Nature Related Disclosures (TNFD) and the Dasgupta Review of the Economics of Biodiversity Loss. It is right that other aspects of the ‘E’ in ESG are now given the same level of attention as climate.
Our members are broadly in support of this guidance which will enable users of accounts to assess material and decision-useful biodiversity related information, to inform capital allocation decisions. However, it is clear that significant and unique challenges still remain concerning: (i) financial product development, (ii) provision and collection of data; (iii) measurement of data; and (iv) clear and consistent methodologies.
As the CDSB further refines its guidance the WFE would recommend that it considers the following:
- Highlighting innovations and nature-based solutions from amongst our membership;
- Spatial Finance as a way of closing the data gap on biodiversity-related risks and opportunities;
- That the CDSB use this guidance to inform the work of the International Financial Reporting Standards Foundation (IFRS), as it establishes an International Sustainability Standards Board.
 The integration of geospatial data and artificial intelligence to scan and interpret data on the cloud, which can be used to measure and manage environmental-related risk.
Nandini Sukumar, Chief Executive Officer, the WFE said: “Most of the focus on ESG to date has been on climate related risk and opportunity. We fully support the CDSB’s efforts to shine a light on equally important environmental issues, and to encourage a shift in financial flows towards a ‘nature positive’ future. As an industry that sits at the heart of the financial services ecosystem, we see many benefits in a consistent approach to disclosure on biodiversity which will promote transparency and accountability as well as capital allocation towards nature-based solutions. We look forward to contributing to discussions on this important agenda at the forthcoming biodiversity COP and beyond”.
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.