The trade group representing global stock exchanges has revised its ESG guidance to encourage listed companies to provide better information to investors on sustainability and governance issues.
The World Federation of Exchanges said that it has revised its policy to encourage companies to include a broad statement about how they integrate ESG issues in their reporting, and to make the link clearer between ESG issues and value creation or destruction.
In a media statement, Siobhan Cleary, head of Research & Public Policy, at the World Federation of Exchanges, said the group had updated its guidance in the hope it will lead to “improved, decision-useful information for investors.”
She added: “We would, however, caution against ESG disclosure being viewed as an end in itself; instead, it should be seen as part of a toolkit used by exchanges, issuers and investors in their drive for greater market transparency.”
Other revisions contained within the guidance, include a recommendation that issuing companies provide investors with specific information about their materiality determination process – how they weigh up the significance of accounting transactions.
The trade group also recommended that the quality and frequency of reporting should align to one of the internationally recognised reporting standards, in a timely manner.
Nandini Sukumar, chief executive officer of the trade group, added: “The objective of the original WFE ESG Guidance & Metrics was to contribute to improving the availability and quality of ESG disclosure.
“Today’s revised documents will help even more exchanges to promote better ESG disclosure, as part of wider efforts to create a sustainable and inclusive future.”
The revised edition of WFE ESG Guidance & Metrics is available to download here.