SSE 2018 Report on Progress charts stock exchange progress

23 October 2018

(23 October 2018) The SSE launched its biennial Report on Progress at the 2018 Global Dialogue, documenting a steep increase in a number of sustainability activities at stock exchanges. Since the last SSE Report on Progress, significant growth in stock exchange activities promoting sustainability and transparency in their markets, with 66 stock exchanges now engaging with at least one of the six sustainability activities tracked by the SSE. In particular, the number of green or sustainability bond listing segments has tripled from five in 2016 to 15 in the third quarter of 2018, expanding rapidly in line with the exponential growth in the green bond market. Guidance and education activities also accelerated over the last two years: written guidance on ESG disclosure grew 85% between 2016 and late 2018, bolstered by the SSE’s campaign and Model Guidance on this topic. More broadly, sustainability education through training of companies and investors has also taken off in recent years, increasing 65% in the last two alone. “The recent progress in increasing sustainable bond listings and reporting guidance is impressive — however, we must continue to build on these efforts if we are to narrow the $5 – 7 trillion investment gap to achieving the Global Goals by 2030,” said Lise Kingo, CEO & Executive Director of the UN Global Compact. “The new report emphasizes the important role that securities regulators play in supporting sustainability and how such efforts can support financial stability around the world. The UN Global Compact is committed to working with all stakeholders in this market in order to accelerate the push towards integrated SDG reporting and promote the development of new financing instruments to tackle the 17 Global Goals.” “This report shows how real progress is being made by exchanges around the world in ratcheting up on ESG disclosure and in promoting sustainable finance. But there is still a long way to go for corporates to become fully transparent in managing these risks and the opportunities associated with making the transition to sustainable development pathways,” said Eric Usher, head of UNEP-FI.  This year, an additional analysis was included, evaluating the disclosure practices of more than 4,300 companies listed on 35 stock exchanges around the world. Based on this analysis, a ranking based on disclosure, growth in disclosure and timeliness of disclosure allows exchanges to compare themselves to their peers. The analysis finds comparatively good disclosure practices at a number of exchanges, with Nasdaq Helsinki topping the ranking for overall disclosure rates. “The analysis in this report can help encourage some healthy competition between markets to enhance their information disclosure. This is important, but we all need to collaborate to enhance data, dialogue and the investment required for a smooth transition to a sustainable, low carbon economy,” said Mark Makepeace, CEO of FTSE Russell, London Stock Exchange Group. “I would like to commend the UN SSE for this report. We can only change the world if businesses are acting; businesses will only act if what they are doing is measured,” said Euan Munro, CEO of Aviva Investors. A common thread among many of the top exchanges for disclosure, and particularly of GHG emissions, is the presence of regulation on one or more indicator evaluated. In all of the top 10 exchanges, in both developed and emerging markets, some form of regulation mandates disclosure of one or more of the indicators evaluated by all, or a subset of, listed companies. For this reason, the SSE continues to engage both securities regulators and stock exchanges on this topic.

About the SSE

The SSE initiative is a UN Partnership Programme organised by UNCTAD, the UN Global Compact, UNEP FI and the PRI. The SSE’s mission is to provide a global platform for exploring how exchanges, in collaboration with investors, companies (issuers), regulators, policymakers and relevant international organizations, can enhance performance on ESG (environmental, social and corporate governance) issues and encourage sustainable investment, including the financing of the UN Sustainable Development Goals. The SSE seeks to achieve this mission through an integrated programme of conducting evidence-based policy analysis, facilitating a network and forum for multi-stakeholder consensus-building, and providing technical assistance and advisory services.