WFE Issues Guidance for Green Equities

The World Federation of Exchanges (WFE), the global body for exchanges and central counterparty clearing (CCPs), has unveiled its guidance for classifying listed shares as environmentally sustainable. The WFE Green Equity Principles, which will serve as a guide for exchanges globally, rest on five foundational pillars, each essential to the accurate classification of green equities, including: revenue/investment threshold, taxonomy utilisation, governance, annual evaluation, and transparent disclosure. Nandini Sukumar, CEO of the WFE, said: “The WFE Green Equity Principles are a significant milestone achieved by the global exchange industry. The guidance note equips aspiring exchanges with the tools to play their part in increasing transparency in sustainable finance and countering greenwashing risks as we move towards a more sustainable global economy.” The guidance further outlines practical considerations for exchanges aiming to align with the WFE Green Equity Classification. These encompass critical operational aspects, including the allocation of responsibility for overseeing the classification, the establishment of relevant processes, criteria for classification revocation, development of the classification mark, and the provision of public information, alongside the criteria for assessing reviewer suitability. The WFE Green Equity Principles and the accompanying guidance note are open for public consultation until 15 January 2024.  Earlier his week, half dozen ASEAN stock exchanges agreed on a new set of core sustainability metrics that are aligned to international standards and established practices. The common ESG metrics are intended to provide a guide for listed companies in reaching international investors and facilitating capital flows into the ASEAN region. 

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