Stock exchanges step up sustainability

Stock exchanges around the world are increasingly embracing sustainability, according to a new report from the World Federation of Exchanges (WFE).

The industry group’s latest annual sustainability survey found that, for the first time, all respondents have adopted at least one ESG initiative and at least one of the WFE’s sustainability principles. Fifty-four exchanges participated in the survey, including five derivatives exchanges.

“This is a real milestone, as our survey reveals widespread adoption among exchanges of both the WFE sustainability principles and ESG initiatives,” said Nandini Sukumar, CEO of the WFE, in a release.

The average number of ESG initiatives pursued by exchanges — such as launching ESG indexes and listing green finance products — rose from 8.4 in last year’s survey to 9.2 this year.

The WFE also reported that the number of exchanges that have engaged in at least 12 initiatives has doubled year over year from eight to 16. Twelve exchanges have also now adopted net-zero targets, and 70% of respondents have implemented initiatives that match all of the WFE’s principles.

The survey also found that over half (58%) of exchanges are reporting their own carbon emissions; of those, 68% cover Scope 1, 2 and 3 emissions, which aim to capture direct and indirect emissions throughout their value chain.

“The most frequently reported motivation for ESG engagement was sustainability concerns and opportunities for business expansion,” the group said.

The main challenges to ESG engagement included resource constraints, unreliable ESG data, and a lack of reporting standards.

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