WFE’s Sustainability Survey reports growing investor demand for ESG disclosure

The World Federation of Exchanges (WFE), the global industry group for exchanges and CCPs released the results of its sixth annual Sustainability Survey.

The WFE sustainability survey encapsulates the extent of the engagement of its members in Environment, Social and Governance (ESG) issues across developed and emerging markets. The survey is carried out annually. The WFE and industry track the evolution the development and growth of its members’ commitment to ESG issues.

This year’s Sustainability Survey mapped exchange activities to the WFE’s Sustainability Principles. Published in October 2018, these principles mandated that exchanges will educate market participants about the importance of sustainability issues, promote the enhanced availability of useful ESG information. The principles also require exchanges to actively engage with stakeholders to advance the sustainable finance agenda, provide markets and products that support sustainable finance and establish effective internal governance and operational processes and policies to support their sustainability efforts.

WFE reports 41% of exchanges have initiatives that correspond to the five Sustainability Principles

The key findings of the WFE survey include:

  • Exchanges continue to develop sustainability efforts through the WFE Sustainability Principles. Among the exchanges participating in the survey, 41% had initiatives that correspond to all five Sustainability Principles.
  • Almost 90% of the exchanges saw investor demand for ESG disclosure, of which 29% believed demand to be extensive. Most exchanges do not require assurance on ESG disclosure, but the number of exchanges planning this requirement in the future almost doubled.
  • There is still no convergence on ESG standards and formats adopted by the exchanges industry. Some WFE members raised the global divergence on ESG standards and practices as a new concern in their sustainability efforts.
  • Green bonds were the most commonly offered ESG products. The survey also showed a small increase in offerings across all sustainability product categories, demonstrating a gradual expansion of ESG products across exchanges.

Nandini Sukumar, Chief Executive Officer, the WFE, said:

Nandini Sukumar, WFE

Nandini Sukumar

The exchange industry leadership of sustainability continues to evolve. As the world seeks to rebuild a better, more inclusive society amid a global pandemic that has challenged many widely-accepted practices, exchanges are leading by example and are determined to be part of that solution.

The Sustainability Survey covered responses referring to 2019 and featured 61 exchanges, of which 56 WFE members.

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