Industry

Exchanges to Support Investor Need for Climate Disclosures – UN SSE 

United Nations SSE expects to publish climate-related reporting guidelines next year. 

The United Nations Sustainable Stock Exchange (SSE) is looking to adopt an ESG disclosure framework that aligns to climate-related disclosures proposed by the Task Force on Climate-related Financial Disclosure (TCFD). The UN SSE will publish its plan in June 2021which will be formulated according to ongoing consultations.  

Panellists at the Sustainable Stock Exchanges: Climate-related Financial Disclosures session held as part of London Climate Action Week discussed the role of stock exchanges in better promoting TCFD-aligned reporting processes based on consistent, science-based ESG data from issuers.  

In summer 2020, London Stock Exchange Group CEO David Schwimmer and ex-Bank of England (BoE) Governor Mark Carney approached the UN SSE as part of a wide outreach to exchanges around the world, calling for globally standardised climate disclosure guidelines.  

The UN SSE is now working on frameworks to promote coordinated adoption and implementation of TCFD recommendations. The guidance is scheduled for two more iterations to be reviewed by an advisory group before publishing in June 2021. 

“The SSE website has a database of all the sustainability activities of stock exchanges engaging around the worldThey’re engaged in training market participants around a number of factors related to ESG, particularly in climate disclosure. We want to take that into this guidance right from day one,” said Anthony Miller, Economic Affairs Officer, United Nations Conference on Trade and Development (UNCTAD) and Coordinator of the SSE.  

David Harris, Group Head of Sustainable Business for London Stock Exchange Group and FTSE Russell, said exchanges could play an important role in improving data quality and consistency given their position as a conduit between issuers and investors. “While the good news is that investors are taking increasingly taking action, one of the challenges is poor quality data, which needs to improve globally,” he said.  

“Exchanges connect more quickly, and are engaged in regulatory and policy discussions. While each exchange has a slightly different role, what we can do is make sure issuers are interpreting regulations in ways that gives investors what they need,” Harris said.  

SSE model guidance, he said, could be replicated by each exchange in their local markets ahead of COP26, for a “clear, consistent and comparable” guidance that will drive global alignment.  

To provide training to professionals in the market, the Climate Disclosure Standards Board (CDSB) has partnered with stock exchanges to set up an online knowledge hub filled with resources and online courses.  

“Stock exchanges come in as a really powerful ally because they are the centre of the market and the ones that bring everyone together. And so, we’ve found it very helpful to partner with exchanges in providing some of this training,” said Michael Zimonyi, Policy & External Affairs Director, CDSB.  

The CDSB is a group of nine business and environmental NGOs, with a mission to integrate environmental – including climate changerelated – information into mainstream reports of companies. 

The SSE initiative is a UN Partnership Programme that aims to provide a global platform for exploring how exchanges can enhance performance on ESG issues and encourage sustainable investment. 

At ESG Investor, we aim to be the practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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