19 June 2012
At the third Sustainable Stock Exchanges Global Dialogue held in Rio de Janeiro on 18 June, UNCTAD Secretary-General Supachai Panitchpakdi announced a new commitment by a core group of five leading stock exchanges to promote long-term, sustainable investment in their market places.
Speaking on behalf of the quartet of UN organizations behind the Sustainable Stock Exchanges (SSE) initiative, Dr. Supachai declared:
“Going forward we would like to publicly recognize those exchanges that are committed to promoting sustainability. Therefore, today we are issuing an open invitation to stock exchanges around the world, to commit to the following pledge: We voluntarily commit, through dialogue with investors, companies and regulators, to promoting long term sustainable investment and improved environmental, social and corporate governance disclosure and performance among companies listed on our exchange.”
The SSE is co-convened by UNCTAD, the UN Global Compact, the UN-backed Principles for Responsible Investment (PRI), and the UN Environment Programme Finance Initiative (UNEP-FI).
Five leading stock exchanges listing over 4,600 companies in developed and emerging markets accepted the invitation from Dr. Supachai to sign up to this new initiative. The 'founding signatories' are the Brazil stock exchange BM&FBOVESPA, Egyptian Exchange (EGX), Istanbul Stock Exchange (ISE), Johannesburg Stock Exchange (JSE), and NASDAQ OMX.
Dr. Supachai's announcement in the presence of senior regulators, investors, and stock exchange executives, comes amid high-profile discussions among governments on whether to include a clause on corporate sustainability reporting in the outcome document of the United Nations Conference on Sustainable Development (Rio+20), taking place between 20-22 June.
Senior representatives from stock exchanges welcomed Dr. Supachai's declaration, noting that it would spark momentum for more widespread sustainability promotion in capital markets. “NASDAQ OMX is happy to be a founding signatory of the Sustainable Stock Exchanges commitment and will work together with the other founding signatories ... through the World Federation of Exchanges to encourage all exchanges to sign up to the new SSE commitment,” said Mr. Sandy Frucher, Vice-Chairman of NASDAQ OMX.
“By encouraging companies to adopt good corporate governance practices where a social and environmental dimension is taken into consideration, and by helping investors to make socially responsible decisions the SSE initiative can enhance transparency of information in capital markets and help create more aware investors” said Mr. Edemir Pinto, CEO of BM&FBOVESPA.
“Being one of the leading exchanges in the MENA region, we have been applying highly standardized listing and disclosure rules that are periodically updated to guarantee the highest transparency on ESG criteria. We therefore welcome this initiative as it will allow us to share our practices with other exchanges,” said EGX Chairman Dr. Mohammed Omran.
The announcement was one of the highlights of the third Sustainable Stock Exchanges Global Dialogue held in Rio de Janeiro on 18 June. The first high-level Sustainable Stock Exchanges Global Dialogue was launched by UNSG Ban Ki-Moon in New York in 2009, and the second was held at the UNCTAD World Investment Forum in Xiamen, China in 2010. The stock exchanges' public commitments are part of new work by the organizers of the SSE to increase their engagement with stock exchanges, investors, and other key stakeholders. “Stock exchanges are uniquely positioned at the intersection between investors, companies, and regulators,” said Mr. James Zhan, Director of UNCTAD's Division on Investment and Enterprise, “as such they can play a key role in promoting responsible investment and sustainable development.” Mr. Zhan announced that the fourth high-level SSE Dialogue would be held at the UNCTAD World Investment Forum in 2014.
The Sustainable Stock Exchanges Initiative is an important part of UNCTAD's Invest in Sustainable Development work programme, which also includes the Investment Policy Framework for Sustainable Development, the Sovereign Wealth Funds for Sustainable Development, ISAR's work on corporate transparency, as well as the Principles for Responsible Investment in Agriculture (in collaboration with FAO, World Bank, and IFAD) and Indicators for the Investment Impact on Sustainable Development (with support from OECD, World Bank, ILO, UNDP and UNIDO). The latter two were also endorsed by the G20 leaders.