Stock exchanges have long moved up and down based upon the financial merits of listed companies. Now they may swing based upon their sustainability performance as well: 21 stock exchanges around the world pledged to introduce sustainability reporting standards by close of Q1 2017. These exchanges will join 17 others that have already adopted the Sustainable Stock Exchanges (SSE) initiative’s environmental, social, and governance (ESG) reporting guidelines.
“Sustainability reporting has come of age,” said James Zhan, Director of the Division on Investment and Enterprise at U.N. Conference on Trade and Development (UNCTAD), according to a statement. Zhan added that NGOs and the UN are not the only ones to advocate sustainability reporting; now, investors and the markets themselves are demanding it.
“Sustainability reporting has come of age.”
The Sustainable Stock Exchanges (SSE) initiative is a platform for stock exchanges around the world to discuss, promote, and implement guidelines and standards for ESG disclosure and corporate responsibility investments. This joint effort among UN departments includes exchanges that represent more than 70% of the listed equity markets, with a market capitalization of $55T.
Nearly half the world’s stock exchanges now offer guidelines on ESG reporting; however, major exchanges like the New York Stock Exchange (NYSE) are still missing from the list.
The stock exchanges planning to introduce reporting standards are:
Norway – Oslo Børs
Spain – Bolsas y Mercados Españoles
Chile – Bolsa de Comercio de Santiago
Denmark – Nasdaq Copenhagen
Egypt – Egyptian Exchange
Estonia – Nasdaq Tallinn
Finland – Nasdaq Helsinki
Iceland – Nasdaq Iceland
Italy – Borsa Italiana (LSE Group)
Kazakhstan – Kazakhstan Stock Exchange
Kenya – Nairobi Securities Exchange (NSE)
Latvia – Nasdaq Riga
Lithuania – Nasdaq Vilnius
Mexico – Bolsa Mexicana de Valores
Morocco – Bourse de Casablanca
Nigeria – Nigerian Stock Exchange
Qatar – Qatar Stock Exchange
Romania – Bucharest Stock Exchange
Seychelles – Trop-X
Sweden – Nasdaq Stockholm
UK – London Stock Exchange
Vietnam – Hanoi Stock Exchange
Vietnam – HoChiMinh Stock Exchange
The diverse economies and geographic locations show ESG reporting can be applied to all sorts of financial machines. As sustainability reporting is adopted across the world, it’s only time before US markets catch up to the trend.
“Market expectations are shifting quickly and we see more and more stock exchanges viewing sustainability reporting as necessary and inevitable,” said Anthony Miller, UNCTAD’s SSE initiative coordinator. “Those expectations create their own momentum.”
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