ESG policies now common at global stock exchanges

Trading venues are encouraging listed companies to disclose corporate performance on ESG

Nearly three quarters of the world’s stock exchanges have an ESG initiative in place aligned to the United Nation’s sustainable development goals (SDGs), a new survey shows.

The World Federation of Exchanges’ 2018 Sustainability Survey found that 73% of the world’s exchanges had some form of ESG initiative linked to the SDGs by the end of last year, with education programmes for listed companies the most common approach.

The fifth annual survey of its kind found that 90% of exchanges responding to the poll now had some for of ESG initiative, up from 88% in 2017, although not all were aligned with the SDGs.

In June, ESG Clarity reported that the trade group had revised its sustainability guidance to encourage greater numbers of listed companies to report on ESG issues.

“We are delighted to report growing engagement with this topic among our membership,” said Nandini Sukumar, chief executive officer of the Federation.

“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.”

The survey findings show that reporting on sustainability metrics is encouraged, or required, by 77% of exchanges although no global standard has yet been established for ESG reporting by listed companies.

In October, the federation launched a new list of sustainability principles for members to follow. The list was designed so that member exchanges could develop their own bespoke ESG initiatives, suitable for regional markets.

The level of investor demand for corporate reporting against sustainability metrics continues to be “limited in many markets,” the survey concluded.

The survey also found there to be substantial growth in exchanges offering ESG-related bond offerings during 2018.

The full report is available here.