(23 October 2018) The United Nations Sustainable Stock Exchanges initiative hosted the SSE Global Dialogue in Geneva, as part of the UNCTAD World Investment Forum. The Global Dialogue is the SSE’s flagship biennial global gathering, bringing together market leaders to deliberate on current challenges, exchange views on best practices and set the direction of travel for stock exchanges committed to promoting sustainable finance.
“Since its launch in 2009, the SSE was built on the demand from exchanges for a place to come together with investors, companies, regulators and policymakers to share good practices and challenges in a multi-stakeholder environment,” said James Zhan, UNCTAD Director of Enterprise and Investment and Chairman of the SSE Board. “We must use every tool at our disposal with the aim of building a world where market signals align with sustainable development objectives.”
This year the Global Dialogue welcomed 50 participants from 25 countries, and included chief executives of 18 stock exchanges, heads of securities regulators, the heads of industry representatives for both stock exchanges and securities regulators, United Nations delegates, Civil Society and representatives from the private sector.
Mr. Paul Andrews, Secretary General of the International Organisation of Securities Commissions, IOSCO gave the keynote address, and the dialogue was moderated by Ms. Nandini Sukumar, CEO of the World Federation of Exchanges.
The dialogue covered four key topics: Securities regulators and sustainable development; market disclosure; Sustainable financial products; and market education.
“We need to build on the great progress achieved over the past 10 years to deliver and measure real world impact. We have one more decade left to align our economies with a low carbon pathway and to achieve the Sustainable Development Goals’,” said Eric Usher, Head of UNEP FI, in his closing statements at the dialogue.
The SSE also launched two key reports at the dialogue, including its biennial Report on Progress and a new report sharing experiences of how securities regulators can support the Sustainable Development Goals.
For quotes and pictures, go to the end of this news release.
2018 Report on Progress
The SSE launched its biennial Report on Progress at the 2018 Global Dialogue, documenting a steep increase in a number of sustainability activities at stock exchanges. Since the last SSE Report on Progress, significant growth in stock exchange activities promoting sustainability and transparency in their markets, with 66 stock exchanges now engaging with at least one of the six sustainability activities tracked by the SSE.
In particular, the number of green or sustainability bond listing segments has tripled from five in 2016 to 15 in the third quarter of 2018, expanding rapidly in line with the exponential growth in the green bond market. Guidance and education activities also accelerated over the last two years: written guidance on ESG disclosure grew 85% between 2016 and late 2018, bolstered by the SSE’s campaign and Model Guidance on this topic. More broadly, sustainability education through training of companies and investors has also taken off in recent years, increasing 65% in the last two alone.
“The recent progress in increasing sustainable bond listings and reporting guidance is impressive — however, we must continue to build on these efforts if we are to narrow the $5 – 7 trillion investment gap to achieving the Global Goals by 2030,” said Lise Kingo, CEO & Executive Director of the UN Global Compact. “The new report emphasizes the important role that securities regulators play in supporting sustainability and how such efforts can support financial stability around the world. The UN Global Compact is committed to working with all stakeholders in this market in order to accelerate the push towards integrated SDG reporting and promote the development of new financing instruments to tackle the 17 Global Goals.”
“This report shows how real progress is being made by exchanges around the world in ratcheting up on ESG disclosure and in promoting sustainable finance. But there is still a long way to go for corporates to become fully transparent in managing these risks and the opportunities associated with making the transition to sustainable development pathways,” said Eric Usher, head of UNEP-FI.
This year, an additional analysis was included, evaluating the disclosure practices of more than 4,300 companies listed on 35 stock exchanges around the world. Based on this analysis, a ranking based on disclosure, growth in disclosure and timeliness of disclosure allows exchanges to compare themselves to their peers. The analysis finds comparatively good disclosure practices at a number of exchanges, with Nasdaq Helsinki topping the ranking for overall disclosure rates.
“The analysis in this report can help encourage some healthy competition between markets to enhance their information disclosure. This is important, but we all need to collaborate to enhance data, dialogue and the investment required for a smooth transition to a sustainable, low carbon economy,” said Mark Makepeace, CEO of FTSE Russell, London Stock Exchange Group.
“I would like to commend the UN SSE for this report. We can only change the world if businesses are acting; businesses will only act if what they are doing is measured,” said Euan Munro, CEO of Aviva Investors.
A common thread among many of the top exchanges for disclosure, and particularly of GHG emissions, is the presence of regulation on one or more indicator evaluated. In all of the top 10 exchanges, in both developed and emerging markets, some form of regulation mandates disclosure of one or more of the indicators evaluated by all, or a subset of, listed companies. For this reason, the SSE continues to engage both securities regulators and stock exchanges on this topic.
Click here to download the 2018 SSE Report on Progress.
The 2018 Global Dialogue was followed by the inaugural SSE Awards, with seven awards given to SSE Partner Exchanges for their sustainability efforts.
The SSE gave two types of awards. The first category is the SSE Ground-Breaker Award, which acknowledges innovative or ground-breaking efforts by a stock exchange contributing to the United Nations Sustainable Development Goals. The founding five SSE Partner Exchanges – B3, The Egyptian Exchange, Johannesburg Stock Exchange, Borsa Istanbul and Nasdaq – received the SSE Ground-Breaker Award.
“Back in 2012, in Rio de Janeiro, Brazil, these five exchanges took a courageous step forward to commit publicly to the United Nations that they would actively promote sustainable finance in their markets. d. So much has happened since then, that we forget that this was a bold and innovative step forward. It was a time when companies were signing up to the Global Compact and investors were joining the PRI and UNEP-FI, but many exchanges were left on the sidelines of international debates on sustainable finance,” SSE Board Chair James Zhan said when presenting the awards.
“Today we’re happy to see most of the world’s stock exchanges as SSE Partner Exchanges, and we honour these initial five exchanges who broke the ground on the SSE Partner Exchange Community,” Mr. Zhan added.
The second category of awards given was the SSE Market Transparency Award, linked to a ranking of stock exchanges around the world based on the disclosure practices of their issuers in the SSE Report on Progress. SSE Market Transparency Awards were given to Nasdaq Helsinki and the Stock Exchange of Thailand for their placement in the ranking – Nasdaq Helsinki was ranked first overall, and SET was the top ranked emerging market exchange. The SSE Market Transparency Award acknowledges markets where sustainability has been integrated into corporate behavior through reporting practices.
Quotes from the SSE Global Dialogue
“The growth in SSE partnership since its foundation in 2012 shows how important sustainability has become to capital market participants, including stock exchanges, regulators, investors and issuers. With experience leading a stock exchange and a securities regulator, I commend the SSE for their progress in bringing together these important stakeholders to progress responsible investment for sustainable development.” – Dr. Mohammed Omran, Chairman, Financial Regulatory Authority, Egypt
“With the important role that an exchange operator has in the financial eco system, comes an important responsibility that stretches beyond the markets themselves. By encouraging a shift in the flow of capital in a more sustainable direction, Nasdaq has the opportunity to make a significant and sustainable contribution to better markets, a better society and a greener planet.” – Lauri Rosendahl, CEO, Nasdaq Nordic
“The stock exchanges have an important role to play when it comes to provide investors with inspiring alternatives related to sustainable investments.” – Eva Halvarsson, CEO, AP2
“Stock exchanges, working alongside listed companies, play a fundamental role in promoting alliances with the public and private sectors, academia and the broad civil society to accelerate the development of the Green Economy in emerging markets. They also can advance the adoption of a set of guidelines, such as the Declaration of Green Principles subscribed recently by the Costa Rican government and Bolsa Nacional de Valores to provide cohesion and clarity to these efforts.” – José Rafael Brenes Vega, CEO, Costa Rica Stock Exchange
“We need a holistic approach to raise awareness and competence on sustainability issues. The financial sector is a powerful influencer, and working together, step by step, is one way forward” – Bente Landsnes, CEO, Oslo Børs
“The Egyptian Exchange (EGX) promotes ESG Disclosure best practices among listed companies through the “ESG Model Guidance for Reporting on ESG Performance and SDGs”, and provides ongoing training and seminars for listed companies to ensure their ability to develop a clear concept of sustainability and to help them issuing their own sustainability reports” – Mohamed Farid, Chairman, Egyptian Stock Exchange
“Since becoming a Partner Exchange to the UN-SSE Initiative, the Dar es Salaam Stock Exchange has embarking on a continuous journey to engage and educate its members about the necessity of the Sustainability Agenda. The DSE Members’ Award Initiative which is embedded into the Initiative has been a key motivation and providing further impetus to this process. This paves the way for smooth transitioning to Mandatory Compliance by 2020.” – Moremi Marwa, CEO, Dar es Salaam Stock Exchange
“As a national Stock Exchange, we are acutely aware of our responsibility to promote the sustainability agenda, to encourage our listed companies to recognise the roles they play in society and how their activities impact the environment, and also to keep investors and the community at large informed of their progress. We are and will continue to be steadfast supporters of the Sustainable Stock Exchange initiative and the principles that it promotes.” – Rashid Ali Al-Mansoori, CEO, Qatar Stock Exchange
“All finance must become sustainable. For that, we need to reorient our entire investment chain and focus on the long-term profit optimisation, instead of short-term profit maximisation. The clock is ticking, so we better walk the talk.” – Robert Scharfe, CEO, Luxembourg Stock Exchange
“Nasdaq has been working for almost 50 years to make markets more inclusive, effective, and sustainable. We believe that exchanges, regulators, investors and companies can work together to promote sustainable and transparent capital movement. Environmental, social, and governance issues are not secondary sources of value, but rather fundamental indicators of market health.” – Sandy Frucher, Vice Chairman, Nasdaq
About the SSE
The SSE initiative is a UN Partnership Programme organised by UNCTAD, the UN Global Compact, UNEP FI and the PRI. The SSE’s mission is to provide a global platform for exploring how exchanges, in collaboration with investors, companies (issuers), regulators, policymakers and relevant international organizations, can enhance performance on ESG (environmental, social and corporate governance) issues and encourage sustainable investment, including the financing of the UN Sustainable Development Goals. The SSE seeks to achieve this mission through an integrated programme of conducting evidence-based policy analysis, facilitating a network and forum for multi-stakeholder consensus-building, and providing technical assistance and advisory services.