“No Consensus” on ESG Reporting Standards at Exchanges

Stock exchanges have reported increased demand from investors for ESG disclosures, but limited progress in providing common guidance on reporting standards. In the latest annual World Federation of Exchanges sustainability report, 96% of respondents reported demand for ESG disclosure, up from 70% in 2018. The report found “no consensus” on the reporting standards required or recommended by exchanges, with an equal number of respondents (27 out of 43) favouring the reporting standards of the Task Force on Climate-related Financial Disclosures and the Global Reporting Initiative. Around half (51%) of exchanges said they were promoting TCFD-based disclosures, while 41% said they plan to, but regulatory authorities currently recommend or require TCFD-based reporting in just 13% of jurisdictions, the survey found. Nearly 90% of exchanges support the creation of the International Sustainability Standard Board (ISSB), the proposed standards of which can be adopted by exchanges once approved by the International Organisation of Securities Commissions (IOSCO).

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