Stock Exchanges preparing markets for new climate disclosure standards
18 October 2023
Stock exchanges, together with the UN SSE, IFC and the IFRS Foundation, will be providing global market participants with high-quality training and guidance on the latest standards for climate and sustainability disclosures published by the IFRS Foundation’s International Sustainability Standards Board. Stock exchanges are uniquely positioned to enable adoption of a global baseline of sustainability-related financial disclosures through market education and guidance and are working with the UN SSE and its partners to provide globally consistent, high-quality training and guidance to their market participants on this and other topics.
Building on more than 200 hours of training for 23,000 participants on the FSB’s task force on climate-related financial disclosures (TCFD) recommendations, the SSE has partnered with IFC and the IFRS Foundation to develop a training program supporting companies to update disclosure practices using the IFRS Sustainability Disclosure Standards. Training will be offered in partnership with UN SSE Partner Exchanges with the first sessions taking place in November.
“Stock exchanges are ideally placed to support the adoption of a global baseline of sustainability-related financial disclosures through the recently launched IFRS Sustainability Disclosure Standards. By working with the IFC and the IFRS Foundation, the UN SSE is supporting stock exchanges to fulfill this role and to continue to guide their markets on implementing these standards to enhance the transparency and sustainability of capital markets around the globe. This high-quality training program will provide all market participants with the stepping stone to start their learning journey,” said Anthony Miller, Chief Coordinator of the UN SSE.
“Disclosure is a foundational element of transparent and efficient financial markets. By adopting climate disclosure requirements, stock exchanges allow investors to allocate capital to climate-friendly products, services, and companies. Ultimately, businesses can improve their strategic resilience in facing climate-related challenges,” said Martine Valcin, Global Manager, ESG Advisory, Knowledge and Learning at IFC.
“Stock exchanges play a crucial role in efforts to raise the bar in the quality of sustainability-related disclosures. We are grateful to the UN SSE for their partnership in developing this training that will directly support the ability of companies to provide investors with consistent, comparable decision-useful disclosures in accordance with the ISSB Standards,” said Emmanuel Faber, Chair, ISSB.
The training program was launched at the UNCTAD World Investment Forum followed by a roundtable discussion “Stock Exchange Action on Climate Disclosures.” The discussion was moderated by Martine Valcin (IFC) and involved standard setters, stock exchanges, civil society, financial service providers and United Nations officials. Some of the comments made during the session include:
“The SSE was our signatory for capacity building on day 1! This is the first time there is a single global language on sustainability disclosure to serve the interest of investors, and we cannot leave anyone behind.” - Jingdong Hua, Vice-Chair ISSB, IFRS Foundation
“This is a journey, we are not all going to fit on the same plane, but we will get to the same destination. To get us there, we need 3 things: Adoption guidance for regulators that the ISSB is developing, because not all jurisdictions are the same; technology and digitization; and market infrastructure.” - Kris Nathanail, Senior Policy Advisor, IOSCO
“Our journey started when we joined the UN SSE, and shortly after we issued a guidance on ESG disclosure. We had the IFC and SSE join our exchange to train our staff on climate disclosure, and now we are developing guidance on climate disclosure with IFC which we will share with all stakeholders in our market. The financial impact of climate change on businesses has increasingly become clear and pronounced. The climate change effect has led investors, businesses, and policymakers to request additional standardized data from companies and issuers in order to effectively assess climate change related risks and opportunities, and price them into the market.” - Mazen Wathaifi, CEO, Amman Stock Exchange
“For ourselves as a sustainable business, we’re now trying to develop sustainable products - which are companies. We are bringing everyone along on this journey.” - Datuk Muhamad Umar Swift, CEO, Bursa Malaysia
“We went hand in hand with SSE using the model guidance on ESG reporting back in 2015 and at that time it was really new for companies and not well understood at all. Since, we have made ESG disclosure mandatory by working with our regulator. It is no longer a luxury - it is imperative.” - Heba El Serafi, Vice President, Egyptian Exchange
“As the Indonesia stock exchange, we welcome the continued support from SSE on diverse reporting training to help our markets understand the different frameworks and standards.” - Iman Rahman, CEO, Indonesia Stock Exchange
“We welcome the SSE initiative because they are focused on education.” - Petr Koblic, CEO , Prague Stock Exchange (Chair, FESE)
We are calling on every government in the world to implement S1 and S2 (from the IFRS Foundation) by 2025, because we do not have time to wait. Financial markets need that information today.” - David Harris, Head of Sustainable Finance Strategic Initiatives & Partnerships, London Stock Exchange Group
“Standards are absolutely necessary and we strongly support both ISSB and ESRS [European Sustainability Reporting Standards]. When we started our work, one of the first barriers we identified to sustainable finance was the lack of data from corporations. Now, many large-cap companies already know the data investors are looking for, but they are not all disclosing that information.” - Margarita Pirovska, Director of Policy, PRI
“We have worked very much towards interoperability. We have taken the definition of the ISSB of financial materiality, and we have also taken the definition of impact materiality from GRI, so there really is no difference.” - Saskia Slomp, CEO, European Financial Reporting Advisory Group (EFRAG)
“If the companies understand the real value of climate data and understand how to communicate the real value with their stakeholders, I think they will find more incentive to improve the value.” - Guo Peiyuan, General Manager, SynTao Co., Ltd.
Launch of support package for stock exchanges
The training program developed by UN SSE and IFC in collaboration with the IFRS Foundation is aligned with a new sustainability resource launched at the event by the IFC as well as forthcoming resources under development by the three organizations.
The IFC also launched at the Stock Exchange Action on Climate Disclosure session at the UNCTAD World Investment Forum the Beyond the Balance Sheet Platform. “Five years, 70 learning events, 5000 people trained, the development of 20 sustainability and climate disclosure guidelines, support to report preparers, and numerous thought leadership publications all lead to the launch of the Beyond the Balance Sheet online platform today,” said Ralitza Germanova, Lead, Sustainability Disclosure and Transparency Program, IFC. The Beyond the Balance Sheet platform is a one-stop shop providing guidance and resources to improve sustainability and climate reporting tailored to emerging markets. The Platform’s overarching goal is to serve as a primary and comprehensive source of reliable information that helps navigate and understand the evolving global and regional landscape of sustainability disclosure standards and frameworks.
Also announced at the session is the SSE’s forthcoming SSE Model Guidance on ISSB adoption and implementation. The guidance, written in partnership with the IFRS Foundation, will be launched at COP28 in Dubai and provides stock exchanges with a template that they can use to guide their markets through the disclosure process to support global implementation of the IFRS Sustainability Disclosure Standards. The forthcoming guidance and the new SSE-IFC-IFRS training program provide companies with a four-stage process:
About the SSE Academy
The SSE Academy is the UN SSE’s education arm focused on the provision of globally consistent and pragmatic training for market participants on the adoption and implementation of sustainable finance practices. Together with its education partners, the SSE Academy develops certified training programs made available to capital market participants free of charge with the objective of supporting the education and training needs of stock exchanges. By partnering with topic experts and specialists, the SSE Academy’s mission is to support stock exchanges in their efforts to bring their markets up-to-date with pragmatic educational resources on key sustainability-related issues. Every SSE Academy’s training programs can be found on the SSE Academy webpageAbout 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.
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