Key Capital Market Leaders Convene at Largest Sustainable Stock Exchanges Global Dialogue

Geneva The Sustainable Stock Exchanges (SSE) initiative hosted its fourth and largest Global Dialogue at the Palais des Nations in Geneva during UNCTAD’s World Investment Forum. The initiative’s flagship event, the Global Dialogue convened CEOs of stock exchanges, companies and institutional investors, alongside high-level policy makers and capital market regulators. This unique gathering offered a global platform to demonstrate leadership and understanding of the sustainability-related opportunities and challenges facing the capital markets today.

The SSE currently counts 16 Partner Exchanges from every continent.  More than 20 stock exchanges were represented at the meeting, half of them at the CEO level.

“At present, the financial markets are not hard-wired to drive capital towards sustainable business and the achievement of the Sustainable Development Goals. This can and should change,” said Mikhisa Kituyi, Secretary General at UNCTAD. “UNCTAD and our SSE co-organizers – the UN Global Compact, UNEP and the PRI – can help.  We continue to build out the SSE platform to provide policy makers, exchanges, investors and others a mechanism to intensify the sharing of best practices and help to define the role of stock exchanges within the global sustainable development movement.”

Tanya Beckett of the BBC facilitated an interactive dialogue, which brought together key players in the field to better understand and act on the sustainability-related opportunities and challenges facing the capital markets today.

The SSE 2014 Report on Progress was launched at the Global Dialogue and contained a review of sustainability initiatives at 55 exchanges. The report found substantial progress, engagement, and a set of emerging best practices among exchanges regarding promotion of sustainability reporting and sustainable business practices more generally.  However, it also recognized clear potential for the sector to do more. The report notes that many developments in the policy and regulatory landscape have been supportive of late, and highlights practical measures that policy makers and stock exchanges can take to promote sustainability, even in the face of systemic obstacles to sustainable capital markets.

Notably, SSE Partner Exchanges marked the occasion of the Global Dialogue by publicly announcing commitments to promote corporate sustainability in their markets during 2014-2016.  Individually, these ranged from launching a sustainability-related national dialogue to contributing technical know-how to social investment funds to analyzing listing disclosure requirements. Collectively, they also committed to enhancing their own transparency by issuing a new ‘Communication to Stakeholders’, which will be based on a framework of questions created by the SSE Investor Working Group, the SSE Secretariat and the Partner Exchanges themselves.

For their part, companies such as Pirelli and Bloomberg LP announced their participation in the SSE Corporate Working Group affirming their support for stock exchanges’ role in promoting corporate sustainability.  The group is expected to represent the voice and interests of companies and contribute advice, expertise, and knowledge when the SSE calls upon it.  It is moderated by the United Nations Global Compact and runs in parallel with the SSE Investor Working Group. The latter, coordinated by the Principles for Responsible Investment and chaired by Aviva Investors since 2009, is comprised of investors representing approximately USD 1.8 trillion in assets under management.

A few quotes from the day of the event:

• “This movement has to go to the next level now … where we build in a reasonable period of time some minimum standards as far as sustainability disclosure is concerned.” – Upendra Sinha,  Chairman of the Securities & Exchange Board of India
• “It’s important that metrics be particularized and flexible enough to change over time, because these [sustainability] issues change over time.” – Elisse Walter, Board of the Sustainability Accounting Standards Board & former Chairman of the US Securities & Exchange Commission
• “We’re trying to change global governance.  It’s not easy to do.  I’m very pleased with the growth of the SSE initiative. … The next step should have some focus on the quality of corporate reporting.” – Richard Howitt, Member of the European Parliament

• “We need an affirmative, universal, and global standard that says ‘these [ESG] issues are material.’ ” – Sandy Frucher, Vice-Chairman of NASDAQ OMX/li>
• “Thinking about sustainability is a no-brainer for an investor with as long a time horizon as we have.” – Mark Wilson, Group CEO, Aviva Group
• “It’s about improving the [sustainability] disclosures, and then making the baseline mandatory and not just voluntary and nice to have.” – Chitra Ramkrishna, CEO and Managing Director, National Stock Exchange of India
• “Investors are flying blind because there isn’t enough ESG data to inform investment decisions.” – David Harris, Director of FTSE ESG at the London Stock Exchange Group
• “We do consider sustainability factors when we consider them to be material to the [credit] risk we are trying to assess.” – Michel Madelain, President & COO at Moody’s Investors Service
• “There is no excuse for [corporate] issuers not to do materiality assessment, independent of their size.  Every board of directors must do this and disclose it to their investors.” – Vincent Kaufmann, Deputy CEO, Ethos
• “[As investors] we look for positive change … what companies to do make things better [regarding Sustainable Development Goals], not what they don’t do.”- Michael Jongeneel, Managing Director, Tridos Investment Management

All interested parties are encouraged to visit the SSE website for more information on specific exchanges’ sustainability efforts and further opportunities to advance the integration of sustainability within capital markets.