Hamilton, Bermuda: 4 October 2018 -In a press release today the World Federation of Exchanges publishes five Sustainability Principles for member exchanges. The release stated;

 

Athens, Thursday 4 October 2018 - The World Federation of Exchanges ("WFE"), the global industry group for exchanges and CCPs, has today published a set of five WFE Sustainability Principles (“the Principles”) that constitute a formal declaration by the WFE and its membership to take on a leadership role in promoting the sustainable finance agenda. 

 

WFE members are already engaged and active on the issue of sustainability as evidenced by the results of the annual WFE sustainability surveys (2016, 2017 and 2018), and by the fact that over 35 stock exchanges around the world have issued or committed to issuing Environmental, Social & Governance (ESG) reporting guidance for their listed companies since the WFE published the first iteration of its ESG Guidelines in 2015 (followed up with revised guidelines in 2018).

 

Today’s Principles clearly demonstrate that WFE members - while recognising they are at different stages of market development, with different opportunities and constraints - will seek to promote the Principles progressively in accordance with their circumstances and priorities.

 

The five WFE Sustainability Principles are:

 

1.       Exchanges will work to educate participants in the exchange ecosystem about the importance of sustainability issues: This education (capacity building) is designed to build an understanding and appreciation of the impact of ESG issues on the long-term health and performance of financial markets, and the important role that markets can play in enabling a transition to a more just and sustainable world.  Capacity building may be done independently or in collaboration with third parties, and may take the form of seminars, courses, case-studies, information sharing among market participants, and the publication of research.

 

2.       Exchanges will promote the enhanced availability of investor relevant, decision-useful ESG information: This could include issuing disclosure guidance to assist issuers, and organising information-sharing/training sessions for issuers around ESG reporting. Exchanges may implement disclosure requirements in phases, beginning with voluntary disclosure, and moving to mandatory/comply or explain disclosure.

 

To ensure the quality of the disclosure, exchanges should encourage disclosure in accordance with widely accepted international standards and against science-based indicators.

 

3.       Exchanges will actively engage with stakeholders to advance the sustainable finance agenda: This could range from engagement with regulators and policymakers to promote the creation of the necessary enabling environment, to contributing to the development of consensus around a sustainability taxonomy, and collaborating with other market participants to develop products that advance the sustainable finance agenda.

 

4.       Exchanges will provide markets and products that support the scaling-up of sustainable finance and reorientation of financial flows: Exchanges can contribute to the mobilisation and reorientation of sustainable finance by, for example, creating frameworks for the listing of green, social and sustainability bonds; developing sustainability indices; and working with third parties to develop sustainability ratings.

 

5.       Exchanges will establish effective internal governance and operational processes and policies to support their sustainability efforts: Exchanges commit to taking steps to better embed sustainability into their governance, strategy and organisational structures, to support the shift into a more sustainable financial system. This could include: incorporating ESG disclosure into the exchanges’ own sustainability reporting; educating staff about sustainability risks and opportunities; and establishing board and senior management oversight of the exchange’s own management of ESG risks and opportunities.

 

The report also includes a summary of global sustainable finance initiatives.

 

Nandini Sukumar, CEO, WFE said: “The WFE and its members acknowledge our role in fostering and promoting the development of a sustainable financial system, making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development, and promoting the transition towards an inclusive, and sustainable economy. The launch today of the five WFE Sustainability Principles marks an even clearer commitment by the WFE membership to role-model and promote actions that work towards a more sustainable financial future. We are proud of the action they have already taken to further the sustainability agenda, but feel even more encouraged by their adoption of these Principles, and look forward to seeing even greater progress in this important area.”

 

Siobhan Cleary, Head of Research & Public Policy, WFE said: “There is no alternative to taking a sustainable approach to the financial system. We recognise that not all market participants will be able to address all five WFE Sustainability Principles. We believe, however, that we have identified areas where exchanges can have real impact in advancing the sustainable finance agenda, and we would encourage all exchanges to use these Principles as the baseline for the development of their market-specific initiatives.”

 

Wu Qing, Vice Mayor of Shanghai and Non-Executive Chairman of Shanghai Stock Exchange (SSE) commented: “As the global industry association for exchanges and CCPs, the WFE’s release of the five WFE Sustainability Principles represents a solid step in the industry’s advocacy for sustainable financial development. Thanks to the joint efforts of WFE members, we are delighted to declare that we will take a leading role in the sustainable agenda for exchanges. I am happy to see the fruition of the Principles that I initiated and encouraged during my mandate as WFE Chairman.

 

“In addition to the traditional role in supporting the development of the real economy, exchanges have become increasingly influential in ‘greening’ the global economy. Supporting and taking the Principles as a guidance for our future development is in line with the long-term interests of exchanges. We hope that regulators, exchanges and their stakeholders will use the WFE platform to continue the dialogue on sustainable development and address our common sustainability challenges.”

 

The WFE Sustainability Principles were launched at the 58^th WFE Annual Meeting in Athens, which is taking place this week. More than 300 delegates have gathered for a programme of 13 speeches and panel sessions on the key topics and issues impacting the market infrastructure industry. Find out more about the conference here.

 

You can read the WFE Sustainability Principles here.

 

- Ends -

 

About the World Federation of Exchanges (The WFE):

Established in 1961, the WFE is the global industry association for exchanges and clearing houses. Headquartered in London, it represents over 200 market infrastructure providers, including standalone CCPs that are not part of exchange groups. Of our members, 36.8% are in Asia-Pacific, 42.6% in EMEA and 20.6% in the Americas. WFE exchanges are home to nearly 45,000 listed companies, and the market capitalisation of these entities is over $82.5 trillion; around $81.8 trillion (EOB) in trading annually passes through the infrastructures WFE members safeguard (at end 2017).

The WFE is the definitive source for exchange-traded statistics, and publishes over 350 market data indicators. Its statistics database stretches back more than 40 years, and provides information and insight into developments on global exchanges.

The WFE works with standard-setters, policy makers, regulators and government organisations around the world to support and promote the development of fair, transparent, stable and efficient markets. The WFE shares regulatory authorities' goals of ensuring the safety and soundness of the global financial system, which is critical to enhancing investor and consumer confidence, and promoting economic growth.

 

About the WFE Sustainability Working group (SWG):

The creation of the SWG in 2014 signalled the industry’s commitment to explore and integrate Environmental, Social and Governance (ESG) issues. The SWG is comprised of representatives from a diverse array of 22 global stock exchanges, all working towards consensus on the purpose, practicality, and materiality of ESG data. Since its inception, the SWG has been working on exploring this topic via original research, public debate, expert analysis and engagement with the broader WFE membership.

 

For more information, please contact:

 

Anna Watson

Head of Communications, The World Federation of Exchanges 

Email:                     awatson@world-exchanges.org

Phone:                   +44 7850 287 685

Twitter:                   @TheWFE

LinkedIn:               The World Federation of Exchanges

                                              

                                         ###

 

For more information on the Bermuda Stock Exchange (BSX), contact James McKirdy at 1-441-292-7212 or jmkirdy@bsx.com . Information is also available at www.bsx.com and on Bloomberg at BSX .  

Established in 1971 the Bermuda Stock Exchange (BSX) is the world’s leading fully electronic offshore securities market. The BSX specializes in listing and trading of capital market instruments such as equities, debt issues, funds, hedge funds, derivative warrants and Insurance Linked Securities. The BSX is a full member of the World Federation of Exchanges (WFE) and is in an O.E.C.D. member nation and an affiliate member of IOSCO. The BSX is recognised by the US SEC as a Designated Offshore Securities Market. In addition, the BSX is recognized by the U.S. Securities & Exchange Commission (SEC) as a Designated Offshore Securities Market under Regulation S; The Financial Services Authority in the UK as a Designated Investment Exchange; HM Revenue & Customs in the UK as a Recognized Stock Exchange; The Bermuda Monetary Authority as a Recognised Investment Exchange; and as an Approved Stock Exchange under Australia’s Foreign Investment Funds (FIF) taxation rules; and Designated Exchange status under Canada’s Income Tax Act and is a member of America’s Central Securities Depository Association.