Stock exchanges join global finance community in race to zero at COP26
Stock exchanges join global finance community in race to zero at COP26
The UN SSE is proud to announce that six of its members have joined the Glasgow Finance Alliance for Net Zero:
◼ London Stock Exchange Group (LSEG)
◼ Singapore Exchange (SGX)
◼ Luxembourg Stock Exchange (LuxSE)
◼ Hong Kong Exchange (HKEX)
◼ Mexican Stock Exchange (BMV Mexico)
◼ Johannesburg Stock Exchange (JSE South Africa)
The exchanges are all members of the recently launched Net Zero Financial Service Providers Alliance, part of the broader Glasgow Financial Alliance for Net Zero (GFANZ) that has been led by the UN Special Envoy on Climate Action and Finance, Mark Carney. Two exchanges (LSEG and SGX) joined in September during the UN climate week in New York and four more exchanges (BMV Mexico, HKEX, JSE South Africa and LuxSE) announced their membership today during COP26. The UN SSE plays a supporting role for the financial service providers alliance and will be working with exchanges around the world to help them with their net zero commitments.
Mark Carney, UN Special Envoy on Climate Action and Finance said: “Accelerating the transition to net zero requires the commitment of all parts of the financial system. Stock exchanges are critical market infrastructure that are essential for investors to manage the risks and seize the opportunities in the climate transition. The support of stock exchanges for climate related disclosures will help ensure capital is allocated in line with the goals of the Paris Agreement. That’s why I am delighted that four new exchanges from four continents have today joined the Glasgow Financial Alliance for Net Zero (GFANZ) through the UN’s Race to Zero. Hong Kong Exchange, Johannesburg Stock Exchange, the Mexican Stock Exchange and Luxembourg Exchange will join London Stock Exchange Group and Singapore Exchange in committing to align relevant products and services to net zero by 2050, and set interim 2025 targets as members of the Net Zero Financial Services Providers Alliance, supported by the efforts of the UN Sustainable Stock Exchanges initiative.”
James Zhan, Chair of the UN SSE and Director of Investment and Enterprise at UNCTAD said: “For over a year now, we've been pleased to work with Mark Carney to accelerate the climate action efforts of stock exchanges and are very pleased to see now six exchanges as members of GFANZ. Over a decade ago the SSE was launched with just five founding exchanges, so I feel confident that these six pioneering net-zero commitments will soon be followed by many more around the world from the exchange community. Stock exchanges understand the important role they have in the global transition to zero emission economies, and we stand ready to assist them as they strengthen disclosure regimes and innovate new financing solutions.”
The announcement comes as the UN SSE convened two meetings of stock exchanges on Finance Day (3 November) at COP26: a CEO Roundtable featuring exchange leaders who have made net zero commitments and an expert panel on innovative solutions that exchanges can provide to promote net zero economies. Organized in collaboration with UNFCCC, the discussions highlighted the important role stock exchanges have in strengthening the climate resiliency of their markets and aiding investors and listed companies with their own net zero commitments. As investors, regulators and other stakeholders increase integration and consideration of climate risks, and many commit to align their portfolios with net-zero emissions, it’s essential that listed companies provide the climate-related information needed. Stock exchanges can help issuers meet investor demands by promoting consistent and comparable reporting practices.
David Schwimmer, CEO of London Stock Exchange Group (LSEG), said: “Financial markets are central to the world achieving net zero emissions. A new financial service provider’s alliance recognises the pivotal role market infrastructure providers such as LSEG have in mobilising the trillions needed to transition to a net zero world and support the growth of new green industries.”
Loh Boon Chye, CEO of Singapore Exchange (SGX), said: “Sustainability in Asia is steadily gaining momentum. As the world’s engine of growth, how the Asia region takes on climate action collectively could make or break success. Through GFANZ, Singapore Exchange looks forward to providing leadership and voice for Asia’s climate transition needs whilst putting into context the region’s other specific environmental and social objectives.”
Julie Becker, CEO of Luxembourg Stock Exchange (LuxSE) said: “The Luxembourg Stock Exchange is truly honoured to be part of the Net Zero Financial Service Providers Alliance and is engaged in the overall goals of the GFANZ. Service providers, and especially exchanges, have a crucial role to play in accelerating the transition to a low-carbon and more inclusive economy. We are working towards net zero emissions within our own operations and commit to ensuring that our products and services align with the goals of the Paris Agreement. As importantly, we commit to engaging with all our clients and stakeholders on sustainability matters and supporting them in defining credible pathways to net zero greenhouse gas emissions. Global challenges require collective responses, and the NZFSPA can inspire action and accelerate the climate transition across our industry.”
Nicolas Aguzin, CEO of Hong Kong Exchange (HKEX) said: “Today we join the GFANZ global coalition as part of our unwavering commitment to sustainability. Reinforcing HKEX’s continued efforts in promoting climate-related disclosures among listed companies and our work to build a sustainable finance ecosystem, we invite all our partners and stakeholders to help build Hong Kong’s reputation as Asia’s leading green and sustainable financial centre, by making commitments of their own.”
Leila Fourie, CEO, Johannesburg Stock Exchange Group said: “The JSE recognises its role in guiding and supporting listed companies to acknowledge climate change as one of the most pressing sustainability risks. The urgent social needs of our country mean that we must holistically integrate environmental, social and governance (ESG) considerations into investment and financial decision making. We are pleased to announce that we are joining the Race to Zero Partner Initiative through the Net Zero Financial Service Providers Alliance (NZFSPA), and the Glasgow Financial Alliance for Net Zero (GFANZ) to promote and champion sustainability measures within South Africa, and internationally. These alliances encourage the financial sector to align with a target to limit the rise in global temperatures to 1.5 oC and use their respective mandates in achieving this goal. ”
José-Oriol Bosch Par, CEO, Mexican Stock Exchange (Bolsa Mexicana de Valores - BMV) said: “Bolsa Mexicana de Valores is aware that climate change is the greatest challenge of our time, in that sense we have been committed to be part of the solution by offering sustainable financing products to the market, such as Green bonds, Sustainability-Linked Bonds as well as an ESG Index to name a few. Additionally, we will take an important step by joining the Net Zero Financial Services Providers Alliance. For BMV, being Net Zero means taking action on our carbon emissions, but most importantly, driving the transition to a low carbon economy.”
UN SSE actively supports exchanges
Working under the auspices of Mark Carney, the SSE launched two tools for exchanges earlier this year: the SSE’s Model Guidance on Climate Disclosure and the Action Plan to Make Markets Climate Resilient: How stock exchanges can integrate the TCFD recommendations. In addition, the SSE has launched a global training programme on climate disclosure in partnership with the International Finance Corporation (IFC) and the Carbon Disclosure Standards Board (CDSB), with support from Bloomberg Philanthropies and SSE member exchanges.
Mary Porter Peschka, Director, Sustainability and Gender Solutions, IFC said: “IFC recognizes the fundamental importance of high-quality climate disclosure as a key tool in the global race to net-zero. Stock exchanges are uniquely positioned to advance climate disclosure and educate issuers on climate-related opportunities in their markets. To further assist markets in their journey towards high-quality climate data and resilience, we are pleased to be working with the UN SSE, CDSB, and stock exchanges around the world to be delivering training on TCFD aligned reporting.”
Mardi McBrien, Managing Director, Climate Disclosure Standards Board, said: “Stock exchanges and their market participants are a crucial part of the puzzle in finding the trillions needed to support the transition to net zero. The conversation now needs to be about action and the pace needed to get there. The race to reach net zero emissions is essential to ensure orderly, resilient and thriving markets and missing this target is not an option. Stock exchanges are at the heart of the market – they are essential to support issuers and investors in this transition. We are delighted to have partnered with the SSE, IFC and stock exchanges across the world to deliver training on climate risk reporting. This free training can help set markets on the right trajectory to embedding climate-related performance into issuer and investor decision-making.”
Regardless of their unique market circumstances domestically, all stock exchanges are encouraged to act now to prepare for changing trends in investment strategies, policy and regulation and legal and reputational risks. The key trends shaping this work are discussed in greater detail in the SSE’s Model Guidance on Climate Disclosure.
For further information on what net zero commitments mean for exchanges, download the new SSE Policy Brief on the Net Zero Movement. If your exchange would like to join this new net zero alliance, please contact the SSE secretariat (firstname.lastname@example.org) and we’ll guide you through the process. The full text for the Commitment to the Net Zero Financial Services Providers Alliance can be found here, including the supplemental text that provides interpretative guidance.
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.