London, Tuesday 23 April 2019 - The World Federation of Exchanges ("WFE"), the global industry group for exchanges and CCPs, today published the results of its fifth annual Sustainability Survey for the 2018 calendar year.
The WFE sustainability survey captures the nature and extent of member engagement with Environment, Social and Governance (ESG) issues in both developed and emerging markets. By carrying out this survey on an annual basis, the WFE is also able to track the evolution of members’ engagement with ESG issues.
ESG is a core strategic mandate and principle of the WFE and this year’s survey mapped exchange activities to the WFE’s Sustainability Principles for the first time. These principles, published in October 2018, state that exchanges will: work to educate participants in the exchange ecosystem about the importance of sustainability issues; promote the enhanced availability of investor relevant, decision-useful ESG information; actively engage with stakeholders to advance the sustainable finance agenda; provide markets and products that support the scaling-up of sustainable finance and reorientation of financial flows; and establish effective internal governance and operational processes and policies to support their sustainability efforts. This year’s survey also expanded the section on the United Nations Sustainable Development Goals (UN SDGs) to examine how exchanges are engaging with these targets.
Key highlights of the survey include:
- Nearly all exchanges (90%) reported having some form of ESG initiative, an increase on 2017’s 88%.
- Many exchanges looked at the UN Sustainable Development Goals - 73% of exchanges with some form of ESG initiative reported having UN SDG-specific initiatives, with education and information programmes for listed companies on the SDGs being the most common.
- Exchanges continue to be the primary drivers of ESG disclosure in markets where reporting is encouraged or required, with 77% of exchanges fulfilling this function.
- Although two thirds of responding exchanges encourage or require ESG disclosure, there is still no consistent global standard for ESG reporting.
- While there appears to be growing investor demand for ESG disclosure, the level of this demand is still considered to be limited in many markets.
- Sustainability indices remain the most commonly offered products, but there has been considerable growth in ESG-related bond offerings, with 73% of exchanges with sustainability products offering green bonds in their markets.
Nandini Sukumar, Chief Executive Officer, WFE said: “It has been five years since we conducted our first annual Sustainability Survey and we are delighted to report growing engagement with this topic among our membership. This is evident from the increase in the number of exchanges participating in ESG initiatives and in the growth in sustainable finance related product offerings. We are confident that exchanges will continue to play an important role in the sustainable finance arena.”
You can read the full survey here.
The survey was conducted in the first quarter of 2019 by the WFE and covers the 2018 calendar year. The survey was compiled from the responses of 57 WFE members and 6 affiliates. The survey focused on four key areas: exchanges and their sustainability initiatives; the UN SDGs; transparency and reporting; and sustainability products. The results were compiled from questionnaire responses supplied by exchanges and their clearinghouses.