According to this briefing from the Experts in Responsible Investment Solutions (EIRIS), stock exchanges can play an important role in improving corporate transparency and performance on sustainability issues by enhancing corporate ESG disclosure and performance. This would involve applying ESG standards within IPO and ongoing listing rules, corporate governance codes, and offering ESG-related trading products.
EIRIS claims that strengthening ESG disclosure requirements can provide new business opportunities and potentially increase revenues, safeguard reputation, maximize competitive advantage and mitigate operational risks. Especially in the current financial environment, investors are always looking for new ways to mitigate their investment risks, opening up an opportunity for stock exchanges to adopt a more systematic approach towards integrated corporate reporting.
In 2010, Aviva Investors, with support from UN-backed Principles for Responsible Investment (PRI), launched the Sustainable Stock Exchanges Initiative which enlists the support of financial institutions that are PRI signatories to bring about change in global listing rules. While some exchanges, such as China’s Green IPO policy and the Johannesburg Stock Exchange, have incorporated ESG reporting requirements in their listing rules and corporate governance codes, EIRIS thinks that stock exchanges can do more to compel companies to address ESG issues and to create a level playing field.
We like the way that the EIRIS is thinking, and we feel that this briefing highlights an important part of our company mission . Click here to read more!
-The Mission Markets Team