The World Federation of Exchanges Welcomes Clarificatory Guidance on Climate- related Metrics and Targets.
London, 19 July 2021 – The World Federation of Exchanges (WFE), the global industry group for exchanges and CCPs, has commented on the Task Force for Climate-related Financial Disclosure’s (TCFD) updated guidance on Climate-related Metrics, Targets and Transition plans.
The WFE supports the proposed updates to the guidance, which will provide a foundation for reporting on climate related risk and opportunity. Since issuing its final recommendations in 2017, the TCFD framework has played a pivotal role in improving climate-related disclosure practices—with formal endorsement amongst the WFE membership continuing to grow.
The draft guidance seeks to encourage a more systematic approach to the selection and disclosure of metrics by introducing a set of cross industry climate-related metrics. This is vital to help all participants within the financial services ecosystem access clear, consistent, and comparable sustainability related data. The WFE makes the following recommendations to further strengthen the guidance:
• The adoption of a standardised format for climate-related targets.
• Encouraging organisations to provide climate-related opportunity metrics, such as ‘green revenues’.
• Taking a proportionate approach to reporting expectations with regards to Small and Medium-Sized Enterprises.
• Robust calibration of performance metrics when tying executive compensation to climate targets.
• Support for a materiality assessment which is reflective of the diverse range of views on this subject.
Nandini Sukumar, Chief Executive Officer, the WFE said: “The risks presented by climate change to business and society are clear, and we fully support the TCFD’s efforts to further refine its disclosure framework. As an industry that sits at the heart of the financial services ecosystem, we see many benefits in a globally consistent approach to disclosure that promotes transparency and accountability as well as effective capital allocation towards greener solutions.”
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 $800bn (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.