This month includes news from HKEX, SET, BME, SIX, SZSE, NSE, LuxSE, Deutsche Börse, Bursa Malaysia and more. Monthly news highlights are compiled by the SSE to give an overview of the capital markets' sustainability news from that month.
You can subscribe to our monthly news highlights by clicking here.
SSE INITIATIVE NEWS & EVENTS
Q1 2020
The SSE initiative has now 96 partner exchanges since Bolsa y Mercados de Valores de la República Dominicana (Dominican Republic) and Baku Stock Exchange (Azerbaijan) have become the latest exchanges to join the SSE.
March 2020
The first of the SSE Consultative Group Quarterly Calls of 2020 took place on Wednesday 18 March at 09:00 and 16:00 (Geneva Time). The theme of this quarter’s webinar was GRI working with stock exchanges (technical assistance for sustainability reporting). There were presentations from GRI, Hong Kong Exchange, Colombo Stock Exchange, Bolsa de Valores de Colombia (Colombian Securities Exchange), Nigerian Stock Exchange and Nasdaq. For more information on the discussions and participants check the Q1 2020 Quarterly Webinar summary page.
March 2020
The SSE initiative recently launched a new ESG Disclosure Guidance Database, a comprehensive global database of all guidance documents provided by stock exchanges. The free database is available to everyone to further peer-to-peer learning among exchanges and inform other capital market stakeholders. More information about the SSE campaign for ESG Disclosure can be found here.
SPECIAL SECTION: INTERNATIONAL WOMEN'S DAY
2020 Ring the Bell for Gender Equality
March 2020
To mark International Women’s Day on 8 March, more than 90 stock exchanges have participated in the international ‘Ring the Bell’ campaign to raise awareness about the business case for women’s economic empowerment and to highlight opportunities for business and financial markets to advance gender equality and sustainable development. You can find more information on all exchanges that planned “Ring the Bell” events as well as photos of some of them here.
March 2020
The research organization PODER, in alliance with 15 media outlets in Latin America and Spain, released a new report on gender diversity on corporate boards. The research shows gender equality advancing slowly in Spain and 15 countries in Latin America: between 2019 and 2020, the percentage of seats occupied by women on the boards of directors of companies listed on the stock exchanges grew by just 1.18 percentage points, reaching 13.24%. Read the full report here along with a video explainer (in Spanish only) or executive summary (in English).
Fearless Girl Campaign: Reports 681 Companies Added Female Board Members
March 2020
State Street Global Advisors, the asset management business of State Street Corporation, celebrated the third anniversary of the launch of the Fearless Girl campaign, which began with the introduction of a now iconic symbol of gender diversity in leadership on the eve of International Women’s Day 2017. Since the arrival of Fearless Girl on Wall Street three years ago, 681 publicly-traded companies with previously no women on their boards have added at least one female board member.
STOCK EXCHANGE NEWS
11 February 2020
The Stock Exchange of Thailand’s headquarters located on Ratchadapisek road has recently gained LEED certification for Existing Buildings Operations & Maintenance (EBOM) with the highest score in Thailand while ranking at the third place in the world, based on the environmental performance and sustainable operations. The prestigious accomplishment echoes SET’s vision of Growing Together for Inclusive Well-being.
HKEX launches e-training and publishes guidance materials on ESG reporting
06 March 2020
The launch of the updated guidance materials aims to help issuers better navigate the evolving standards on ESG reporting. “ESG is a dynamic area. As ESG considerations increasingly move into the mainstream, HKEX, as the market regulator, is committed to ensuring that HKEX’s ESG framework and guidance are up to date with investor and stakeholder expectations,” said Bonnie Y Chan, HKEX’s Head of Listing.
JPX/TSE Publish "Practical Handbook For ESG Disclosure"
31 March 2020
In the last few years, more and more investors have begun taking into account ESG (Environmental, Social, Governance) factors when evaluating a company's mid- to long-term corporate value. Listed companies have also been acting to step up their ESG-related activities and information disclosure. With this background, JPX and TSE are publishing a Handbook to support listed companies who are choosing to work on ESG disclosure, linking their company's mid- to long-term corporate value improvement to its sustainable growth.
REGULATOR NEWS
06 February 2020
Global Compact Network Malaysia, the local network of the United Nations Global Compact, and Capital Markets Malaysia, an affiliate of the Securities Commission Malaysia, have jointly launched the Global Compact Network Malaysia Centre of Excellence (COE) to drive strategic development of the sustainability agenda and to accelerate the performance of corporate Malaysia in supporting the achievement of the Sustainable Development Goals (SDGs).
January 2020
Approximately three years have passed since the publication of the "Green Bond Guidelines 2017" in 2017, and the total amount of issuance in Japan's green bond market has greatly expanded since its inception, to approximately 820 billion yen in 2019. In this revision and development, consistency with the Green Bond Principles, Green Loan Principles, and Sustainability Linked Loan Principles have been taken into consideration.
EU’s classification of green economic activities and a report on the EU Green Bond Standard
09 March 2020
The final report on EU taxonomy contains recommendations relating to the overarching design of the Taxonomy, as well as guidance on how companies and financial institutions can make disclosures using the taxonomy. In other EU news, the responsible EU Technical Expert Group published on 9 March 2020 their Usability guide for the EU Green Bond Standard. This guide offers market actors guidance on the use of the proposed standard and the set-up of a market-based registration scheme for external verifiers.
24 March 2020
The Council of Ministers has authorized the acquisition of 100% of the capital of Bolsas y Mercados Españoles, S.A. (BME) by SIX Group AG. The authorization has been made at the proposal of the Ministry of Economic Affairs and Digital Transformation, after a favorable report from the National Securities Market Commission and after carrying out a hearing process with the Comunidades Autonomas with competences in the matter.
ESG INDICES AND PRODUCTS
BME Registers A New €1.25 Bn Sustainable Bond Issue By The Madrid Regional Government
27 February 2020
The Madrid Regional Government today registered a new 10-year sustainable bond issue with AIAF, BME’s Fixed Income market, for an amount of 1.25 billion euros. This is the sixth ESG bond issue registered with AIAF by this Public Administration since 2016. In this way the Madrid region becomes an issuer of reference in the field of sustainable finance, while AIAF leverages itself as the benchmark market for this type of issues.
04 March 2020
The German benchmark index DAX has a new, sustainable family member: the DAX 50 ESG Index, which was launched today. This index takes environmental, social and governance (ESG) criteria into account and highlights the 50 top companies regarding their ESG performance, market capitalization and stock exchange turnover. It was created by Qontigo, the index and analytics business of Deutsche Börse Group.
12 March 2020
On March 11, the first batch of two credit protection contract businesses for corporate bonds for epidemic prevention and control were successfully launched on SZSE. They are the credit protection contract introduced by Soochow Securities and the private corporate bonds financing support instrument jointly rolled out by CITIC Securities and China Securities Finance Corporation Limited (“CSF”). Both are having the corporate bonds for epidemic prevention and control as underlying assets.
13 March 2020
Banks' issuance of green, social and sustainability (GSS) bonds rose 41% to a record of $121.8 billion in 2019 taking the cumulative total since 2015 to $335.5 billion, according to a new report from Moody's Investors Service. More banks will adopt green and sustainability-linked funding strategies as investors increasingly emphasize environmental, social and governance (ESG) considerations.
Credit Suisse Launches 4 new ESG ETFs at SIX
16 March 2020
The Swiss Stock Exchange SIX welcomes another high-profile issuer to its ETF segment: Credit Suisse Asset Management is listing its first 5 ETFs, broadening the choices for investors particularly in the ESG space. Four of the five new ETFs enable investors to gain exposure to broadly diversified ESG portfolios. The four ESG products are benchmarked to MSCI USA ESG Leaders and MSCI World ESG Leaders respectively. The underlying indices select the top 50 percent of companies by ESG performance in each sector of the parent index.
ESG ETFs and ETPs listed globally gathered net inflows of US$7.54 billion
20 March 2020
ETFGI, a leading independent research and consultancy firm covering trends in the global ETFs/ETPs ecosystem, reported today that Environmental, Social, and Governance (ESG) ETFs and ETPs listed globally gathered net inflows of US$7.54 billion during February, bringing year-to-date net inflows to US$14.30 billion which is higher than the US$2.40 billion gathered at this point last year. Total assets invested in ESG ETFs and ETPs increased by 4.93% from US$64.79 billion at the end of January 2020 to a new record US$67.99 billion.
Access Bank issues first dual-listed bond on Nigerian Stock Exchange and Luxembourg Stock Exchange
20 March 2020
The successful listing of Access Bank’s N15Bn Green Bond on the Luxembourg Stock Exchange (LuxSE) represents a major milestone in the development of sustainable financing in Nigeria. The successful cross-listing of this 15.50 percent fixed-rate green bond with five-year maturity has enjoyed many firsts including the first-ever climate bonds standard certified corporate green bond to be issued in Africa; the first to be listed on The Nigerian Stock Exchange (NSE) in 2019; and now, the first successful cross-listing of a bond born out of the partnership between NSE and LuxSE.
Global Green Finance Index - Charting The Progress Of The World’s Green Finance Centres
24 March 2020
There is growing confidence in the development of green finance across all regions. Ratings of green finance rose in almost all centers for both depth and quality.
RESEARCH
World Economic Forum: Why the Crisis Engulfing Nature Matters for Business and the Economy
January 2020
Human societies and economic activities rely on biodiversity in fundamental ways says the World Economic Forum in new research that shows $44 trillion of economic value generation – more than half of the world’s total GDP – is moderately or highly dependent on nature and its services. Together, the three largest sectors that are highly dependent on nature generate close to $8 trillion of gross value added (GVA): construction ($4 trillion); agriculture ($2.5 trillion); and food and beverages ($1.4 trillion).
S&P Global: conceptualizing a Paris-Aligned Climate Index for the Eurozone
06 February 2020
Based on scientific evidence around the need for a 1.5°C global warming scenario to be hit (Masson-Delmotte, et al., 2018), the EU Technical Expert Group (TEG) has released its final report (The EU Technical Expert Group on Sustainable Finance, 2019), outlining two new climate benchmarks. This paper describes an S&P Dow Jones Indices (S&P DJI) concept for the eurozone region, which is aligned with the more stringent of these two new climate benchmarks: the Paris-Aligned Benchmark.
17 March 2020
Increased investor focus on debt issuers' exposure to ESG issues and broader sustainability credentials will underpin strong growth in green, social and sustainability bonds ("sustainable bonds") across global emerging markets in the coming years, says Moody's Investors Service in a new report. That said, the fallout from the coronavirus outbreak has dampened the near-term growth prospects for sustainable bonds following last year's record issuance of $56 billion, as prolonged market disruption could deter issuers from coming to market.
MANAGEMENT NEWS
20 February 2020
Ekström will oversee Nasdaq Stockholm’s overall business operations as well as continue to lead Nasdaq’s European Fixed Income and Commodities businesses. Ekström will report to Bjørn Sibbern, President of Nasdaq’s European Markets. Lauri Rosendahl will continue as Chairman of the Board for Nasdaq´s exchanges in Helsinki, Copenhagen, Oslo and Iceland. Rosendahl hosted the SSE 2015 Nordic and Baltic Regional Dialogue and has been a prominent voice in the emerging space of corporate sustainability and ESG.
GRI appoints Siobhan Cleary as Director of Capital Markets Engagement
25 March 2020
From 1 May, Siobhan joins the Global Reporting Initiative (GRI) in this newly-created role, with responsibility for driving adoption of the GRI Standards by capital market actors – including regulators, stock markets, investors and analysts. She will reinforce the significance of ESG disclosure in capital markets while working to align the practice with investor needs. Siobhan is a non-executive director of the Johannesburg Stock Exchange and most recently was Head of Research & Public Policy at the World Federation of Exchanges. Siobhan currently serves as a consultant for the SSE.
CONSULTATION
The Financial Conduct Authority (FCA) has published proposals outlining new climate-related disclosure requirements for premium listed issuers. FCA is proposing to introduce a new rule for commercial companies with a UK premium listing, requiring them to state whether they comply with the recommendations of the Financial Stability Board’s Taskforce on Climate-related Financial Disclosures (TCFD) and to explain any non-compliance. FCA is also consulting on guidance on existing obligations set out in EU legislation and in our Handbook that may already require issuers to disclose information on climate-related and wider environmental, social and governance (ESG) matters under certain circumstances. Consultations open until 1 Oct 2020.
SPECIAL SECTION: COVID-19
Financial Times: ESG shines in the crash; legal milestone for ratings
16 March 2020
For months, the ESG cynics have warned that sustainability strategies would get tested in a downturn. Well, here we are. This week the S&P 500 has suffered its quickest descent into a bear market on record, killing off an 11-year bull market. So after booming in a bull market, will ESG now wilt as investors retreat to tried-and-true strategies? Thus far, the answer seems to be no.
WFE Statement On Covid-19 And Market Volatility
19 March 2020
Volatility has reached levels comparable with the Global Financial Crisis of 2008, with one-day losses not seen since 1987. The situation is made more challenging by high levels of indebtedness and already low interest rates. As the global representative body of exchanges and CCPs, the WFE is working with our member community to share best practice, mitigate risk, and coordinate responses (where permitted by antitrust laws) during this crisis.
PRI: how responsible investors should respond to the COVID-19 coronavirus crisis
27 March 2020
The COVID-19 pandemic – and the global response to it – is a serious threat not only to global health, but to our communities, our economies and our investments. As long-term stewards of capital, investors can and should act now to help reduce harmful impacts including: the direct effect on public health, the severity of the associated economic slowdown, the deepening of inequality in societies and the resulting impacts of all of the above on mental health.
