German stock exchange the latest to back new sustainability code

Sustainability now “at the centre of capital markets”

Deutsche Börse, the operator of the Frankfurt stock exchange, has become the sixth company listed on the blue-chip DAX index to sign up to Germany’s new Sustainability Code, which contains guidelines for reporting on environmental, social and governance (ESG) issues.

The code’s first DAX-listed member was energy giant RWE, which signed up to it May. This unleashed a flurry of other blue-chip signatories, including insurance giant Allianz, pharma and chemicals group Bayer, automaker Daimler and engineering firm MAN AG. Other notable signatories include sport shoemaker Puma, traded on the midcap MDax, and the unlisted chemicals firm Evonik.

Marlehn Theime, chair of German Council for Sustainable Development (RNE), the code’s author, said that with Deutsche Börse’s signing, the code was now “at the centre of capital markets.”Julia Taeschner, head of corporate responsibility at Deutsche Börse, agreed, adding that promoting the transparency of sustainability information was the bourse’s central function as a market maker.

About a year ago, Deutsche Börse began providing ESG data on the near 800 companies listed on the Frankfurt exchange. The bourse operator does not support the idea, suggested by some sustainable experts, of introducing ESG requirements for listed companies. “For that, there is neither enough ESG data nor is the quality of available data good enough,” Taeschner told Responsible Investor. “We therefore don’t want a situation where smaller firms are needlessly burdened and bigger firms decide to list on other exchanges, where such requirements do not exist.”

The RNE also said it had improved the user friendliness of its database for code signatories. With that, investors and other interested parties should get a better idea of how the guidelines are being followed.