(9 November 2022) The UN Sustainable Stock Exchanges (SSE) initiative together with the International Organisation of  Securities Commissions (IOSCO) and the in partnership with UNFCCC’s Global Innovation Hub convened financial market leaders, including top regulators, standard setters and exchange CEOs, to highlight the crucial role of the financial sector to move the needle on climate change. 

Delivering opening remarks, Mr James Zhan, Director of the Investment and Enterprise Division, UNCTAD, and Chair of the Board of Directors of UN SSE, highlighted the urgent need for action. “The climate crisis is the defining challenge for humanity in the 21st century and we need all parts of the investment community to play their role in addressing it.” said Mr. Zhan. “We are pleased to be working with IOSCO to support their efforts to strengthen the regulatory environment that allows exchanges and other investment stakeholders to innovate new climate finance solutions.” 

From right to left: Mr Jean-Paul Servias (Chair, IOSCO), Ms Mary Schapiro (Vice Chair for Global Public Policy), Mr Loh Boon Chye (CEO, SGX), Ms Nandini Sukumar (CEO, WFE), Mr Mohamed Farid Saleh (Vice Chair, IOSCO).

Jean Paul Servais, Chair of the IOSCO noted that "2023 is a critical year for building a global sustainable finance market. IOSCO has been working closely with the ISSB in setting the foundations for a global sustainability reporting system but the success of the global baseline for sustainability disclosures needs strong support across the official and business sector including the UN, G20, businesses, financial regulators, and exchanges. In that sense, Exchanges have a key role to play in helping corporates get ready for reporting under the new ISSB standards."

Moderated by Mr Anthony Miller, Coordinator, UN SSE, the panel, including Mr Jean Paul Servais (Chair, IOSCO), Mr Mohamed Farid Saleh, (Vice Chair, IOSCO), Mr Rodrigo Buenaventura (Chair, CNMV), Ms Ndidi Nnoli-Edozien (Board, International Sustainability Standards Board (ISSB)), as well as Ms Mary Schapiro (Vice Chair for Global Public Policy of Bloomberg), Mr Loh Boon Chye (CEO, SGX), Mr Rami El-Dokany (CEO, EGX) and Ms Nandini Sukumar (CEO, WFE), discussed the importance of climate disclosure, net zero action and the creation of innovative products such as Voluntary Carbon Markets (VCMs) to support a climate-positive market. 

Ndidi Nnoli-Edozien (Member of the ISSB, second left) with Rami El-Dokany (Chair, EGX, left), Anthony Miller (Coordinator, UN SSE, second fron the right) and Mr Fardi Saleh (Vice Chair, IOSCO, right)

“What we need now is for issuers to prepare for disclosing climate- and other sustainability-related information using the ISSB's standards and for investors to get familiar with using this information. At the heart of the market, stock exchanges can help build the skills needed to achieve this.” - Ndidi Nnoli-Edozien, IFRS, ISSB

To assist exchanges in exploring VCMs as a new tool to support a net zero market, the SSE announced the creation of a new advisory group tasked with producing guidance on how to create and operate the new type of market. As a start for discussion, the SSE also published an introductory FAQ on VCMS (link FAQ). Acknowledging the considerable potential of VCMs, Mr Servias highlighted a new IOSCO report on VCMs (link report) that explores how they can contribute to a net zero transition.

"Carbon markets are an important tool to facilitate transition towards net zero but this can only be achieved if we reach an international carbon price. Exchanges, through the increased transparency they can bring to this new asset class and the associated price discovery that follows on from exchange-traded markets, can play an important role in helping upscale these markets.”- Rodrigo Buenaventura, Chair CNMV

If your exchanges would like to join the NZFSPA or if you are interested to learn more about the VCM workstream please reach out to [email protected]