(Bonn, 16 November 2017) Meeting alongside the United Nations climate change conference (COP23), capital market leaders from around the world gathered to share ideas for promoting green finance in alignment with the Paris Agreement and Sustainable Development Goals. Convened by the United Nations Sustainable Stock Exchanges (SSE) initiative and hosted by the Luxembourg Green Exchange, the event featured the release of a new SSE action plan on how stock exchanges can grow green finance.
“This new Green Action Plan will guide the efforts of Stock Exchanges all over the world to go green. The fact that Luxembourg’s Stock Exchange has taken the lead in this initiative shows once again that Luxembourg’s financial center is at the forefront of sustainable finance,” said the Minister of Finance of Luxembourg H.E. Pierre Gramegna.
“Transitioning our economies to a sustainable footing will require innovative forms of finance and investment, which is why we need more collaboration between policy makers and capital markets to help us deliver on our global climate commitments,” said Isabelle Durant, Deputy Secretary General of UNCTAD. “We are engaging with stock exchanges and capital market leaders to encourage them to demonstrate leadership, seize the opportunities that green finance offers, and help us transition to the sustainable economies of the future.”
“We welcome the leadership taken by some pioneering stock exchanges on green finance,” said Fiona Reynolds, Managing Director of the PRI, who moderated a high-level panel at the event. “We call on all stock exchanges to work with investors, issuers and regulators to take steps to support the transition to a low carbon economy.”
European Investment Bank’s President, Werner Hoyer said, “Stock exchanges can play a decisive role in triggering the trillions needed to ward off a global tragedy. Therefore, I very much welcome today’s release of this important publication by the UN Sustainable Stock Exchange. I hope that actions will soon follow words and that this plan, which highlights two crucial aspects: promoting green products, and greening financial markets, will stimulate supply and the demand for green finance.”
He added, “It is estimated that 90 trillion dollars of sustainable investment is needed by 2030. The path to a 2 degree world may look long and steep for climate activists. But I firmly believe that green bonds – pioneered by the European Investment Bank 10 years ago – alongside other green financial instruments, can help us reach this target.”
“I believe we all took a path towards sustainability and green. There is no turning back. But this is a collective challenge, it is all about the ecosystem and not about opportunistic initiatives,” said Anthony Attia, CEO of Euronext Paris. “As leading pan-European Exchange, Euronext has a key role to play in channelling investments into energy transition. We are committed to offering the right environment and eco-system to promote Green and Sustainable Finance, including a European market for SME financing, innovative indices or index-linked products.”
Donna Nemer, Director of Capital Markets at the Johannesburg Stock Exchange (JSE) said, “We are proud to be a founding members of the SSE, and the work being done is more relevant now than it ever has been. The JSE fully supports the recommendations of the report and is pleased to announce that their own Green Segment was launched in October with green bonds being the first product. The JSE is committed not only to supporting green finance, but to promoting ESG as an investment consideration more broadly.”
“Fully aware of the growing importance of stock exchanges’ role and contribution to the global climate related challenges, EGX remains committed to raise the awareness on the importance of green finance in securing a better tomorrow for future generations. We commend the SSE initiative as a learning platform that helps exchanges supporting the transition of green finance and taking a leading role in creating more sustainable and inclusive economies,” said Mohamed Farid Saleh, Chairman of the Egyptian Exchange.
“Seeing climate change at the top of stock exchanges’ agendas is yet another sign that things are moving forward rapidly in addressing this global challenge. The development of green finance makes new options more accessible to a larger array of investors and contributes to accelerating the transition to a low-carbon economy and building more sustainable markets for future decades,” said Jean-Luc Gravel, Executive Vice-President, Equity Markets of Caisse de dépôt et placement du Québec. “In the wake of the Paris Agreement and evolving consumer choices and technology, markets are already changing rapidly. This will create new attractive investment opportunities for our clients. Over the next three years, we will increase our investments in low carbon assets by over $8 billion. We have also committed to reducing our carbon footprint by 25% per dollar invested by 2025. These objectives are ambitious, achievable and will be subject to reporting.”
The new SSE green finance action plan, announced at the SSE Green Finance Dialogue, was built with the inputs of over 70 experts from around the world and includes practical examples from more than a dozen stock exchanges including Brazil’s B3 exchange, Deutsche Boerse, Intercontinental Exchange (parent to New York Stock Exchange), Johannesburg Stock Exchange, Luxembourg Stock Exchange, London Stock Exchange, Nasdaq and Shanghai Stock Exchange, among others. A checklist of 12 action points within 4 action areas forms the heart of the new guidance, which can be used as a self-assessment or benchmarking tool to identify areas where stock exchanges can initiate or expand their activities on green finance.
“It has been an honour for the Luxembourg Stock Exchange to chair this distinguished Advisory Group and contribute, together with other experts, to the elaboration of the action plan,” said Robert Scharfe, CEO of the Luxembourg Stock Exchange. “This SSE guidance offers action points and guidance for stock exchanges and constitutes a roadmap towards our ambitious goal of simultaneously stimulating demand and supply for green investing.”
“This guidance document provides stock exchanges in any market with a solid platform to ensure the development of green finance initiatives in their market and to support their Nation’s achievement of their Paris Agreement commitments,” said Patricia Espinosa, Executive Secretary of the United Nations Framework Convention on Climate Change. “We applaud the SSE and its Advisory Group on Green Finance for this exceptional work in ensuring all stock exchanges have the tools to succeed in transitioning to green markets.”
The event was organized by the United Nations Sustainable Stock Exchanges (SSE) initiative and hosted by the Luxembourg Green Exchange. Additional organization support and expertise was provided by Carbon Tracker, Ceres, Carbon Disclosure Standards Board (CDSB), Climate Bonds Initiative, Global Reporting Initiative (GRI), S&P Dow Jones Indices. The event was funded in part by a collaboration established by the Gordon and Betty Moore Foundation. The event took place alongside the 2017 United Nations climate change conference (COP23). For more information about COP23, please click here.
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About the Sustainable Stock Exchanges initiative
The SSE is a peer-to-peer learning platform for exploring how exchanges—in collaboration with investors, regulators, and companies—can encourage sustainable investment and enhance corporate transparency, and ultimately performance, on ESG (environmental, social and corporate governance) issues. The SSE is convened by the UN Conference on Trade and Development (UNCTAD), the UN Global Compact, the UN Environment Finance Initiative (UNEP FI), and the Principles for Responsible Investment (PRI). For more information on specific exchanges’ sustainability efforts, how to become a Partner Stock Exchange, and further opportunities to advance the integration of sustainability within capital markets, visit www.sseinitiative.org