Exchanges Take Sustainability Disclosure Lead
A group of progressive stock exchanges are committed to developing better sustainability performance at their listed companies
The United Nations Rio+20 summit may have proved a disappointment to some, unable to achieve real practical or political goals, but there was at least one significant development that warrants attention. Nasdaq OMX, along with four other stock exchanges, committed to promote better sustainability standards at their listed companies.
Under the aegis of the Sustainable Stock Exchange initiative, senior leaders from Nasdaq OMX, Johannesburg, BM&F Bovespa, Istanbul and Cairo drafted and signed a pledge to “voluntarily commit, through dialogue with investors, companies and regulators, to promote long-term sustainable investment and improved environmental, social, and corporate governance disclosure and performance among companies listed on our exchange”.
Documents of this kind may be less newsworthy than the actual efforts they portend, but we take this commitment seriously.
Our collaboration with these exchanges – facilitated through our main trade organisation, the World Federation of Exchanges – makes this a truly global effort, able to reach more than 4,700 public companies. And we encourage other exchanges to join us, to broaden the influence of our effort and accelerate acceptance of our goals.
Efficient businesses
As the first electronic exchange in the world, we believe that Nasdaq OMX is a pioneer in the sustainability space, and we have renewed our commitment to sustainable principles. Nasdaq OMX is a lean operation, and we constantly seek out smarter uses of available resources. We leverage technology to produce a more efficient market, one that consistently reduces the resource burden for all participants.
Nasdaq OMX was one of the first to offer a complete family of indexes tracking the environmental and clean energy sector. Our commodities market facilitates power, natural gas, and carbon emissions trading and clearing services for global commodity markets.
Key improvements to infrastructure have made our offices more efficient – and our operations more transparent – than ever before. Even our listing process has gone entirely paperless. But, there is more to be done.
Exchanges' role
Because we have long-term relationships with public companies, helping them to build their businesses and integrate best practices, exchanges are uniquely positioned to promote corporate sustainability.
But we must also protect the investors who put their faith in these companies; we can exert some influence upon investors, analysts, regulators, and insiders when it comes to the correct valuation and interpretation of sustainability disclosures.
Good exchanges are, by definition, ready-made advocates for sustainable capitalism. Our educational foundations have long promoted the twin virtues of responsible investment and capital formation, and sustainability is an ever more present part of that mission.
We can go further to encourage good practices that make good sense. Companies are beginning to integrate these ideas into their operational strategy, and we can help educate them about the benefits of sustainability reporting. This demonstrates how the simple pledge that we have signed may signal changes far beyond the confines of a conference room in Rio de Janeiro.
No unnecessary burden
Nasdaq OMX would not require anything of our listed companies that we do not ourselves provide, nor would we ask them to absorb unnecessary cost or resource burdens.
We trust that other exchanges concur, but this is a highly competitive – and tightly regulated – space. Thus it is essential to lead by example, to demonstrate the value (and practice) of sustainability disclosures, and to secure the participation of multiple stakeholders in this effort.
The Rio+20 pledge may be a small step, but we believe it is in the right direction.
Evan Harvey is managing director, global marketing, at Nasdaq OMX.
Steven Wilding
Conference Director
Ethical Corporation
00 44 207 375 7226
E: steven.wilding@ethicalcorp.com
