Sustainable Stock Exchange Initiative: How can African Exchanges Become Involved?

Sustainable Stock Exchange Initiative: How can African Exchanges Become Involved? Presented by: Website: www.SSEinitiative.org Email: info@SSEinitia...
Author: Rebecca Tyler
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Sustainable Stock Exchange Initiative: How can African Exchanges Become Involved?

Presented by:

Website: www.SSEinitiative.org Email: [email protected]

The SSE is co-organised by:

Xolisa Dhlamini South Africa Network Manager Principles for Responsible Investment (PRI) [email protected]

12 Partner Exchanges Listing over

3 Global Conferences with

15,000 companies

US $33 trillion in market capitalization

300

more than policy makers, stock exchange CEOs and investors USA (2009); China (2010); Brazil (2013) Geneva 2014

Named by Forbes magazine as one of the “World’s Best Sustainability Ideas” in 2011

2 SSE Reports on Progress on top

4 organizations UNCTAD, Global Compact, PRI & UNEP-FI Working as

1 UN

30 stock exchanges

Exchanges. Policy Makers. Regulators. Investors. Companies.

Join the Dialogue. www.SSEinitiative.org

SSE initiative: a partnership to facilitate action The Initiative

Secretariat

A partnership between the UN, UN-backed organizations, stock exchanges, investors, companies, regulators and governments

UNCTAD, the UN Global Compact, the PRI and UNEP FI as founders, are the core organizers of the SSE initiative and manage its secretariat

Facilitate a peer-to-peer dialogue among global exchanges –

Objective

to explore how they can work together with investors, regulators, and companies, to enhance corporate transparency, and ultimately performance, on ESG issues and encourage responsible long-term approaches to investment

SSE initiative: How it’s organized

SSE Timeline 1st SSE Global Dialogue opened by UN SecretaryGeneral Ban Ki-Moon in New York

3rd SSE Global Dialogue in Rio de Janeiro, Brazil; Global Exchanges invited to join SSE as Partner Exchanges

2012

2009

2014 2013

2008

UNCTAD + PRI organised two meetings in Geneva for promoting and examining the policy context for responsible investment

Three additional stock exchanges join the SSE Initiative including the Nigerian Exchange, the Warsaw Exchange, and the NYSE with Ban Ki-Moon ringing the closing bell in New York

2010 2nd SSE Global Dialogue in Xiamen, China, opened by the Chairman of the China Securities Regulatory Commission

Currently three additional partner stock exchanges in 2014, and the upcoming 4th SSE Global Dialogue in Geneva (14 October)

SSE's Partner Exchanges

SSE initiative: Partner Exchanges Core Commitment: Promoting corporate sustainability in their markets.

SSE Partner Exchanges: What are the Benefits? The SSE is a unique UN forum for exchanges and capital market stakeholders •

Receive peer-to-peer learning and sharing of best practices



Connect with key global capital market stakeholders: policy makers, investors, regulators, and issuers while attracting new investors with the prospect of long-term value



Contribute to the Post-2015 Development Agenda of the UN and the creation of a more sustainable and inclusive economy



Demonstrate leadership and differentiate themselves from other competing markets



Advance the development of activities and products related to sustainability



Attract public visibility and achieve global reach

SSE initiative: What it does Consensus building

Research

Capacity building

▪ A peer-to-peer learning platform for stock exchanges to share best practices and promote sustainable business ▪ A neutral multi-stakeholder forum for stock exchanges, regulators, policymakers, investors and companies ▪ Partners with other multilateral organisations to promote capital markets for sustainable development

Conducting research on current stock exchange and regulatory initiatives Providing a database on sustainability policies and actions being taken by stock exchanges and regulators Offering a library of publications on sustainability measures and reporting practices

Providing guidance and training on best practices for policy makers and stock exchanges Assisting stock exchanges with the development of sustainability indices and other practical initiatives Creating workshops to increase sustainability awareness and educate sustainability practices

2014 SSE Global Dialogue •

Brings together CEO’s of stock exchanges, companies and institutional investors, alongside high-level policy makers and capital market regulators.



Hosted on 14 October 2014 at the Palais des Nations in Geneva, Switzerland as part of UNCTAD’s 2014 World Investment Forum.

Visit the 2014 SSE Global Dialogue website at: www.sseinitiative.org/global-dialogue/2014-global-dialogue/

The SSE Investor Working Group "In support of the wider SSE initiative, a group of over 30 PRI signatories led by Aviva Investors created the Sustainable Stock Exchanges Investor Working Group in 2009, which is coordinated through the PRI, to engage with global exchanges on the way they can promote sustainable business practices, such as through enhanced sustainability reporting requirements. In addition to this work, many investors had been previously engaging and continue to engage directly with exchanges on ESG issues outside of the Working Group."

Visit the PRI’s SSE Investor working group website to learn how to get involved with the Working Group.

IOSCO Letter In addition to the working group, PRI and Ceres' Investor Network on Climate Risk (INCR), with UNEP-FI are facilitating a global investor communication to the IOSCO Secretariat and its Executive Board, in order to draw attention to investors' growing needs for timely, comparable, and material disclosure of corporate sustainability information to inform their investment decisions. To get involved, sign the IOSCO letter and share the invitation. Learn more at the PRI IOSCO letter webpage.

SSE initiative: What it does Consensus building

Research

Capacity building

A peer-to-peer learning platform for stock exchanges to share best practices and promote sustainable business A neutral multi-stakeholder forum for stock exchanges, regulators, policymakers, investors and companies Partners with other multilateral organisations to promote capital markets for sustainable development

▪ Conducting research on current stock exchange and regulatory initiatives ▪ Providing a database on sustainability policies and actions being taken by stock exchanges and regulators ▪ Offering a library of publications on sustainability measures and reporting practices

Providing guidance and training on best practices for policy makers and stock exchanges Assisting stock exchanges with the development of sustainability indices and other practical initiatives Creating workshops to increase sustainability awareness and educate sustainability practices

2014 SSE Report on Progress

Sustainability measures becoming more widespread in exchanges • •

Nearly a quarter of exchanges offer training or guidance Over a third offer a sustainability index

There is no 'one way' to implement sustainability measures • •

Almost all G20 countries have some sort of E&S reporting initiative Over a third of IOSCO board members have an E&S regulation or initiative

To see more detailed fact sheets on these stock exchanges and regulatory initiatives, please visit SSEinitiative.org

SSE initiative: What it does Consensus building

Research

Capacity building

A peer-to-peer learning platform for stock exchanges to share best practices and promote sustainable business A neutral multi-stakeholder forum for stock exchanges, regulators, policymakers, investors and companies Partners with other multilateral organisations to promote capital markets for sustainable development

Conducting research on current stock exchange and regulatory initiatives Providing a database on sustainability policies and actions being taken by stock exchanges and regulators Offering a library of publications on sustainability measures and reporting practices

▪ Providing guidance and training on best practices for policy makers and stock exchanges ▪ Assisting stock exchanges with the development of sustainability indices and other practical initiatives ▪ Creating workshops to increase sustainability awareness and enhance sustainability practices

Best Practice Guidance for Policymakers and Stock Exchanges on Sustainability Reporting Initiatives



Recognizes there is no “one-size-fits-all” solution



Provides a roadmap for policy makers and exchanges to discover what works best for them



Focusing on Corporate Sustainability Reporting to: 1.

Meet the evolving information needs of investors;

2.

Navigate increasingly complex disclosure requirements and expectations;

3.

Manage sustainability performance;

4.

Understand and address social and environmental risks and opportunities.



Serves as a voluntary technical tool to be used to understand the sustainability context, and to share best practices in the area.



Available in: English, French, Arabic, Spanish, Russian, and Chinese

The Guidance Documents can be located at: www.sseinitiative.org/publications

Sustainability Index Workshop •

Worked closely with Borsa Istanbul and the Sabanci University Corporate Governance Forum of Turkey to develop a sustainability index for the Borsa Istanbul Partner Stock Exchange



Blackrock, a large asset manager with over 4 Trillion USD in assets under management, delivered the keynote address, stressing the importance of sustainability issues to mainstream investors like Blackrock.



Workshop participants included the following: • International Organizations • Private companies • NGOs • Banks

• Public-sector offices

"The SSE is only as strong as its member stock exchanges. We hope to organize more events with our Partner Exchanges that draw on the experience of multiple stakeholders in order to enhance corporate

sustainability and promote responsible investment.” -- James Zhan, Director of UNCTAD’s Division on Investment and Enterprise

Momentum for private companies to use sustainability reporting Published on 19, July 2014

Sustainable Development Goals (SDGs) - Outcome Document 12.6 encourage companies, especially large and trans-national companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle

• A full 95% of the Global 250 issue sustainability reports. • Ernst and Young's survey highlights sustainability resulting in a better reputation, and improved access to capital

Highlights from 2014 • Published the Best Practice Guidance for Policymakers and Stock Exchanges on Sustainability Reporting Initiatives. • Encouraged Partner Exchanges to make public commitments at the 2014 SSE Global Dialogue. • Drafted the new biennial progress report: 2014 SSE Report on Progress (available in October).

• Facilitated the quarterly Consultative Group virtual meetings including Partner Exchanges and investor representatives. This includes cross communication between Partner Exchanges and the PRI SSE Investor Working Group.

Looking forward... • Planning, in 2015, to work closely with our Partner Exchanges to hold regional events with stock exchanges and other key stakeholders in different regions across the globe. • Finalizing an enhanced reporting template for Partner Exchanges that will be announced and in place for 2015.

The SSE initiative and Africa The SSE wants to: • • • •

Assist smaller stock exchanges in the African region that are interested in promoting sustainable business Build consensus at national & regional level through 5 party talks: exchanges, investors, companies, policy makers and regulators Make research and best practices guidance and training available to strengthen the business case for sustainability Build capacity amongst smaller African exchanges to create sustainability indices, and to strengthen listing requirements

Giving African stock exchanges the ability to: • • • •

Work closely with their listed companies to integrate sustainability measures and reporting into their operations Educate investors on how to integrate sustainability reporting and disclosures into their investment decisions Consult with policy makers to promote high-quality sustainability reporting Provide product differentiation with a diversity of sustainability investment products

Current SSE Partner Exchanges in Africa:

The Next Steps: • Stock Exchanges are encouraged to: • join the SSE and become active in sustainability • •

read the Best Practices Guidance Document and visit the SSE website's Data and Research section join the World Federation of Exchanges (WFE)'s sustainability working group

• Investors are encouraged to: •

join the PRI’s SSE Investor Working Group, led by Aviva Investors, that engages with stock exchanges and regulators to enhance listing rules and/or regulatory initiatives to require the disclosure of sustainability strategies among listed companies

• Companies are encouraged to: •

join the Global Compact’s SSE Company Working Group (forthcoming) lend your voice to the discussion and encourage your stock exchanges to undertake sustainability activities. Support global discussion on a baseline listing standard to improve transparency

• Regulators and Policy Makers are encouraged to: • Create the regulatory environment that encourages long-term approaches towards investment and that encourage standardized sustainability reporting

• All stakeholders are encouraged to: • •

engage with the global debate at the SSE 2014 Global Dialogue consider organizing local events and workshops and to reach out to the SSE with suggestions and new ideas to drive the discussion forward.

Email us for more information: [email protected]

“I call on stock exchanges around the world to join this effort”. Ban Ki-moon, UN Secretary-General

To learn more please visit

www.SSEinitiative.org

Exchanges. Policy Makers. Regulators. Investors. Companies.

Join the Dialogue.

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