Investors and companies urge stock exchanges to enhance ESG disclosure
Investors and companies have sent letters to stock exchanges asking them to issue companies in their market with voluntary reporting guidance that includes environmental, social and governance (ESG) considerations.
In order to effectively evaluate listed companies, investors need access to all material information, which includes information on ESG factors. Guidance for companies on how reporting may address ESG considerations, as well as highlighting these issues in existing definitions of what constitutes material information, is therefore an important step towards creating a stable financial system that advances sustainable economic growth. Only 25% of WFE stock exchanges currently provide written guidance to companies on reporting ESG information.
Led by Allianz Global Investors, and supported by the PRI and the UN Global Compact, the letters have been sent to exchanges that are part of the World Federation of Exchanges (WFE) or the Sustainable Stock Exchanges (SSE) initiative in advance of the World Federation of Exchanges annual meeting, where exchanges will discuss their role in advancing sustainability. They commend exchanges that have an existing guidance or have publicly committed to putting one in place, or conversely, ask exchanges with no guidance to put one in place by the end of 2016.
Marissa Blankenship, Senior ESG Analyst from Allianz Global Investors, said:
“This campaign has struck a real chord with asset owners, managers and companies, with over 85 firms signing-up to our call for stock exchanges to issue voluntary ESG reporting guidance by the end of 2016. As an essential interface between issuers and investors, every stock exchange has the potential to be a driving force in the development of sustainable capital markets. Ahead of the World Federation of Stock Exchange’s Annual Meeting, this campaign is a timely reminder of the need for investors to be able to access consistent, comparable ESG information”.
These letters are part of a larger effort to ensure all markets provide guidance to companies and to further support exchanges in this effort. The SSE released its Voluntary Model Reporting Guidance, which is a globally consistent resource that exchanges can customise to create their own guidance for companies on reporting ESG information to investors.
For more information or to get involved please contact the SSE at email@example.com.