The best of EcoWatch, right in your inbox. Sign up for our email newsletter!
Investors Recommend Sustainability Disclosure Requirements for Global Stock Exchanges
Photo courtesy of Shutterstock
A group of investors today announced a Consultation Paper with recommendations for integrating sustainability disclosure requirements into listing rules for U.S. and global stock exchanges.
The draft recommendations were developed by nearly a dozen investors who are part of the Ceres-led Investor Network on Climate Risk (INCR). BlackRock, British Columbia Investment Management Corporation, and the AFL-CIO Office of Investment are among those who participated on the INCR Listing Standards Drafting Committee.
The initiative is part of a growing effort by investors and stock exchanges, including NASDAQ OMX, to make environmental, social and governance (ESG) disclosure a consistent requirement for corporate listings on stock exchanges. While several exchanges have adopted their own sustainability listing requirements and guidance, INCR members and NASDAQ OMX have set out to develop a uniform standard that all stock exchanges can use.
"Creating a corporate sustainability reporting standard across all exchanges will encourage a shift in how companies assess the importance of their efforts in environmental, social and governance issues," said Meyer Frucher, vice chairman at NASDAQ OMX. "It is a win-win for both companies and investors, encouraging sound business practices and responsible investing."
Investors are asked to review and comment on the paper's recommendations by May 1. Once comments are considered and key issues are incorporated, the final document will be submitted to stock exchanges for consideration at the World Federation of Exchanges annual meeting in October.
“Stock exchanges can play a leadership role in moving ESG disclosure practices forward. We believe that this proposed listing standard strikes a good balance between investors’ need for consistent and comparable ESG information, and companies’ need for flexibility,” said Gwen Le Berre, vice president of corporate governance and responsible investment at BlackRock, an international investment manager with $3.8 trillion in assets under management.
"Investors are increasingly frustrated by the lack of sustainability disclosure across markets, and how inconsistent that data is even within the same industry," said INCR director and Ceres president Mindy Lubber, whose organization convened the listing standards consultation. "We can solve this problem by bringing investors together on standards that make such information comparable and useful. This paper is the result of such discussions."
The Consultation Paper calls for the following disclosures by companies as part of a listing standard:
- Materiality assessment: An assessment in annual financial filings where company management will discuss its approach for determining the company's material ESG issues and the outcomes of such an assessment.
- Sustainability table of disclosures: Provide a hyperlink in annual financial filings to a Global Reporting Initiative (GRI) Content Index. Such disclosure will let investors know if key ESG information exists, and if so, its exact location and the completeness of the data.
- Improved corporate ESG disclosure: Companies must provide reporting on a "comply or explain" basis for eight key ESG categories. They can either provide such disclosures or explain why they are not.
EcoWatch Daily Newsletter
By Brian Barth
Late fall, after the last crops have been harvested, is a time to rest and reflect on the successes and challenges of the gardening year. But for those whose need to putter around in the garden doesn't end when cold weather comes, there's surely a few lingering chores. Get them done now and you'll be ahead of the game in spring.
By Bailey Hopp
If you had to choose a diamond for your engagement ring from below or above the ground, which would you pick … and why would you pick it? This is the main question consumers are facing when picking out their diamond engagement ring today. With a dramatic increase in demand for conflict-free lab-grown diamonds, the diamond industry is shifting right before our eyes.
(R) The measles virus pictured under a microscope. PHIL / CDC
The Pacific Island nation of Samoa declared a state of emergency this week, closed all of its schools and limited the number of public gatherings allowed after a measles outbreak has swept across the country of just 200,000 people, according to Reuters.
By Alison Cagle
Rising above the Arizona desert, the Santa Rita Mountains cradle 10,000 years of Indigenous history. The Tohono O'odham Nation, Pascua Yaqui Tribe, and Hopi Tribe, among numerous other tribes, have worshipped, foraged, hunted and laid their ancestors to rest in the mountains for generations.
Native Americans are disproportionately without access to clean water, according to a new report, "Closing the Water Access Gap in the United States: A National Action Plan," to be released this afternoon, which shows that more than two million Americans do not have access to access to running water, indoor plumbing or wastewater services.
By Nanticha Ocharoenchai
In the Czech Republic, horses have become the knights in shining armor. A study published in the Journal for Nature Conservation suggests that returning feral horses to grasslands in Podyjí National Park could help boost the numbers of several threatened butterfly species.