October 2016 Sustainable Stock Exchange Highlights

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SSE INITIATIVE NEWS

MENA region capital market leaders gather to promote sustainable finance
October 26, 2016
Stock exchange CEOs from Egypt, Jordan, and Qatar met today with capital market regulators from Morocco, Malaysia, and the United Arab Emirates at the United Nations Sustainable Stock Exchanges (SSE) regional dialogue held in Dubai as part of the UNEP FI Global Roundtable 2016. The capital market leaders gathered to discuss the challenges, opportunities and priorities related to sustainable finance.

Dubai Financial Market hosts bell-ringing ceremony to celebrate UNEP FI’s Global Roundtable
October 24, 2016
Dubai Financial Market (DFM) organized a special bell-ringing ceremony to celebrate Dubai’s hosting of the Global Roundtable and Annual General Meeting 2016 of the United Nations Environment Programme (UNEP) Finance Initiative. The event underlines DFM’s commitment to promote the sustainability of stock exchanges. Eric Usher, Head of the UNEP FI, rang the DFM market-opening bell in the presence of Essa Kazim, Chairman of DFM and senior representatives of stock exchanges. DFM became a Partner Exchange Member of the United Nation’s Sustainable Stock Exchanges (SSE) initiative in June 2016.

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UPCOMING WEBINARS AND EVENTS

SSE COP22 event – “Fostering Green Capital Markets” with AMMC, CSE & Maroclear
November 16,  2016 - Marrakesh, Morocco
Capital market leaders will be convening at COP22 in a dialogue jointly organized by The Moroccan Capital Market Authority (AMMC), The Casablanca Stock Exchange, The Moroccan Central Securities Depository (MAROCLEAR), and the Sustainable Stock Exchanges initiative . The theme of this dialogue will be “Fostering Green Capital Markets in the South.”

20th African Securities Exchanges Association (ASEA) Conference
November 27-29, 2016 – Kigali, Rwanda
The conference and general meeting is hosted by the Rwanda Stock Exchange. The event will feature a discussion on sustainability issues with a representative of the SSE.

Italy Corporate Governance Conference
December 1-2, 2016 – Milan, Italy
Italy’s second annual conference on corporate governance will take place at the Italian Stock Exchange in Milan. The two-day event will focus on Italian regulatory/market issues and how integrated governance can foster “long termism.”

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LISTING STANDARDS AND GUIDANCE


EGX Publishes The Model Guidance To Sustainability In English and Arabic, Holds Workshops For Listed Companies 

October 23, 2016
The EGX Model Guidance for Reporting on ESG Performance and SDGs First Draft For Discussion and Comments, October 2016 was released on 23 October 2016. The EGX Model ESG Guidance is aimed at encouraging issuers to focus and limit their ESG-related reporting to the content that is really material (“less is more”) because investors/ analysts are not interested in too detailed or irrelevant information. The recommendations in the EGX guide are designed to assist listed companies in EGX in integrating environmental, social and governance (ESG) information into effective capital market communication. There are no formal obligations associated with this guide. The guidance is not designed to constitute mandatory new procedures for a company’s disclosure that apply to listed companies on EGX.

BM&FBOVESPA launches Second Edition Of the Novo Valor Sustainability Guide
September 28, 2016
BM&FBOVESPA’s Novo Valor Guide has a timeline showing the evolution of the sustainable development concept in the business environment, with a recommendation of 13 steps towards sustainability. The launch of the second edition of the Novo Valor Guide comes in the context of the SSE’s ESG Guidance Campaign, which began earlier this year to encourage the world’s stock exchanges to create sustainability guides for their listed companies and to promote Environmental, Social and Corporate Governance (ESG) information transparency in their markets.

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GENERAL NEWS

King Report on Corporate Governance for South Africa, King IV™ Launch
November 1, 2016
The long-awaited update of the King Report on Corporate Governance for South Africa, King IV™, was launched at a high-level conference at the Sandton Convention Centre on 1 November 2016. The aspiration behind King IV is that it should be more practically applicable to all organisations in South Africa and not just big corporates. King IV applies a principle-and-outcome based approach, and moves away from a tick-box approach.

Majority of HK-listed firms slack on ESG reporting
October 25, 2016
New research on environmental, social and governance (ESG) reporting trends in Hong Kong reveals that only 60 of the largest 200 companies (based on market capitalisation) listed on the Hong Kong Stock Exchange (HKEX) published a separate ESG report in the financial year of 2015. This follows HKEX’s increasing reporting obligations for companies in December 2015 by announcing stricter disclosure requirements for ESG.

GRI Unveils New Global Sustainability Reporting Standards
October 19, 2016
The Global Reporting Initiative launched a new set of global sustainability reporting standards on Wednesday aimed at giving companies a common language for communicating such information. The goal of the standards is to help companies measure, evaluate and communicate the impact they have on the natural environment as they make investment decisions, said Eric Hespenheide, GRI Interim Chief Executive.

SASB Forms Investor Advisory Group to Improve ESG Disclosure
October 18, 2016
In light of increasing acknowledgment by investors that environmental, social and governance (ESG) factors can impact the ability of companies to manage risk and deliver financial performance over the long-term, the Sustainability Accounting Standards Board (SASB) announced the founding members of its Investor Advisory Group (IAG). Comprised of leading asset owners and asset managers, the group is committed to improving the quality and comparability of sustainability-related disclosure to investors, thereby enabling investors to develop a more comprehensive view of company performance.

Paris Climate Agreement enters into force
October 5, 2016
Following the ratification by Austria, Bolivia, Canada, France, Germany, Hungary, Malta, Nepal, Portugal, Slovakia, as well as the European Union, the Paris Climate Agreement exceeded the minimum threshold necessary to enter into force. The deal will take effect on November 4, 30 days after at least 55 countries, accounting for at least 55 percent of global emissions, adopted it. “This is a momentous occasion,” said UN Secretary-General Ban Ki-moon, “What once seemed unthinkable, is now unstoppable. Strong international support for the Paris Agreement entering into force is a testament to the urgency for action, and reflects the consensus of governments that robust global cooperation, grounded in national action, is essential to meet the climate challenge.”

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ESG INDICES AND PRODUCTS

Morningstar Launches 27 Indexes to Meet ESG Investing Appetite
October 4, 2016
Morningstar said it has rolled out 27 indexes to give investors exposure to “high standards of sustainability” and a risk/return level that resembles the broader investment market. The indexes cover investments in broad regional markets around the world, along with markets in developed economies, emerging markets and single-country exposure.

Portfolio Sustainability Scores of all Morningstar Country Indexes
October 17, 2016
In a new report, Morningstar, Inc. 35 country indexes represent 98.6% of the Morningstar Global Markets Index, which had in September 2016 a total market value of $43 trillion. Since Sustainalytics’ ESG and controversy coverage skews toward larger caps, a small percentage of the stocks included in the indexes are not covered. Each country index targets the top 97% of stocks by market capitalization. Therefore, in aggregate, the Portfolio ESG Scores coverage is around $39 trillion, representing 91% of the assets under management of the Morningstar Global Markets Index. Portfolio Controversy Scores have a higher coverage, at 96.3%.

Where Are All the Sustainable ETFs?
October 8, 2016
Out of more than 1,700 ETFs, just 35 check the sustainable box, according to Morningstar, and 10 of those made their debut this year. While ETFs as a whole are steadily winning market share from mutual funds, assets in sustainable ETFs—a mere $4 billion as of the end of August—are a far cry from the $174 billion in their mutual fund counterparts.

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