Ceres calls for comparability and consistency in stock exchange ESG guidance

Sustainability advocacy group engaging with World Federation of Exchanges

The need for comparability and consistency in how stock exchanges approach sustainability reporting guidance is to be included in feedback that US-based sustainability advocacy group Ceres plans to give to the World Federation of Exchanges on its Sustainability Reporting Guidance this month.

Last November, the World Federation of Exchanges, the global trade association for exchanges and clearing houses, set out a series of material ESG metrics that its members can include in their disclosure guidance for listed firms.

It was the culmination of a year-long project by WFE’s Sustainability Working Group then chaired by Evan Harvey, director of corporate responsibility at Nasdaq.

Upon the launch of the guidance, the WFE did not include investor comment, so in response, Ceres reached out to global investors and others to gather feedback to the WFE.

Speaking to Responsible Investor, Tracey Rembert, who recently left her role as Director of the Investor Initiative for Sustainable Exchanges at Ceres to join Christian Brothers Investment Services, said investors were thirsty for consistent and comparable ESG metrics.“The challenge on engaging with exchanges on sustainability is that each wants to do its own thing and that doesn’t lead to consistent standards.” She continued that as a happy medium, there needed to be a floor for reporting on ESG.

“The challenge is that each wants to do its own thing.”

She said the WFE was committed to making improvements to its Sustainability Reporting Guidance and welcomed feedback.

Rembert noted that this work was important in light of parallel movements around reporting standards, such as the Financial Stability Board’s Taskforce on Climate-related Financial Disclosure and EU directives around non-financial reporting.

Currently, 16 exchanges have ESG reporting guidance or listing rules in place, and at least 23 others have recently committed to implementing guidance by the end of 2016. The Singapore Exchange just publicized its listing rules on sustainability reporting, on a comply or explain basis, in June after a year-long consultation.