Call for investors to support sustainable stock exchanges

Exchanges see “investor ambivalence” – report

While global stock exchanges still support corporate sustainability reporting, they need more support from investors and regulators – according to a new report.

They are also hindered by a “lack of clear revenue drivers” says a progress report on the Sustainable Stock Exchange Initiative compiled for Aviva Investors by Responsible Research.

The firm surveyed 27 of the largest exchanges and found that a majority remain committed to promoting greater corporate responsibility on sustainability issues but are facing restrictions.

The survey was first commissioned by Aviva in 2010 as part of the Sustainable Stock Exchange Initiative, and resulted in the report “Sustainable Stock Exchanges: Real Obstacles, Real Opportunities”.

The new update found that 76% of exchanges think they have a responsibility to encourage corporate responsibility, up from 71% two years ago. But despite this, the exchanges have found limits to how much they can do.

More than half the respondents said encouraging sustainability was a remit they shared with regulators and legislators. Just two said promoting sustainability disclosure and accountability was solely within their remit, the report said.Eighty percent of those questioned would welcome a global approach to consistent and material corporate sustainability reporting. This suggested a common global framework might be needed. Nearly half of those surveyed said “investor ambivalence” discouraged them from further action. “This suggests a threshold of investor support and dialogue that needs to be exceeded for true progress to be made,” the report stated.

Paul Abberley, chief executive of Aviva Investors London, said it was disappointing that so many exchanges failed to implement means to promote sustainability disclosure through their listing rules.

“However we recognise that exchanges can’t achieve this on their own and it is not solely their responsibility,” he added. Exchanges “require further support from asset owners and asset managers – as well as their regulators and legislators.”

Aviva has convened the Corporate Sustainability Reporting Coalition, which is urging all nations at the UN’s Rio+20 summit in June to commit to requiring, on a report or explain basis, the integration of material sustainability issues in the annual reports of all listed and large private companies.